Loading...
Res 2010- 63 Sale of Rev Funding Note St Thomas Academy Series 2010Resolution No. 10 -63 A RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF EDUCATIONAL FACILITIES REVENUE REFUNDING NOTE (ST. THOMAS ACADEMY PROJECT), SERIES 2010 WHEREAS, (a) Minnesota Statutes, Sections 469.152 through 469.1651, as amended (the "Act "), confers upon cities the power to issue revenue bonds for the purpose of the encouragement and development of economically sound industry and commerce to prevent so far as possible the emergence of blighted and marginal lands and areas of chronic unemployment; and (b) The City Council of the City of Mendota Heights, Minnesota (the "City ") has received from St. Thomas Academy, a Minnesota nonprofit corporation organized under the laws of the State of Minnesota and a 501(c)(3) organization (the "Borrower "), a proposal that the City assist in refinancing a project hereinafter described through the issuance of a revenue note, pursuant to the Act; and (c) In authorizing refinancing of the Project (as hereinafter defined), and the issuance of the Note (as hereinafter defined), the City's purpose is, and in its judgment the effect thereof will be, to promote the public welfare by providing educational facilities within the meaning of the Act, such purpose to be accomplished in the manner and upon the terms and conditions set forth in the Act and in this Resolution; and (d) The project to be financed by the revenue note is the refunding of the City's outstanding Variable Rate Demand Purchase Revenue Bonds (St. Thomas Academy Project) Series 1999 (the "Refunded Bonds "), which were issued to finance the acquisition, construction, and equipping of a middle school addition and the renovation and remodeling of the Borrower's existing educational facilities, including the acquisition of unimproved land adjacent thereto and the expansion of a parking lot (the "Project "). The Project will be owned and operated by the Borrower; and (e) The City has been advised by representatives of the Borrower that without the aid of municipal financing, and its resulting low borrowing cost, the Project and the provision of the services offered in connection therewith is not economically feasible; and (f) No public official of the City has either a direct or indirect financial interest in the Project nor will any public official either directly or indirectly benefit financially from the Project. BE IT RESOLVED by the City Council of the City of Mendota Heights (the "City "), as follows: SECTION 1 LEGAL AUTHORIZATION AND FINDINGS. 2590986v2 1.1 Findings. The City hereby finds, determines and declares as follows: (a) The City is a municipal corporation and a political subdivision of the State of Minnesota and is authorized under the Act to assist the project herein referred to, and to issue and sell the Note for the purpose, in the manner and upon the terms and conditions set forth in the Act and in this Resolution. (b) As required by the Act and Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code "), the City on the date hereof, held a public hearing on the issuance of one or more series of revenue bonds or other obligations to finance the Proj ect. (c) The issuance and sale of the Educational Facilities Revenue Refunding Note (St. Thomas Academy Project) Series 2010 (the "Note ") in an amount not to exceed $6,500,000 by the City, pursuant to the Act, is in the best interest of the City, and the City hereby determines to issue the Note and sell the Note to U.S. Bank National Association (the "Lender "), as provided herein. The City will loan the proceeds of the Note (the "Loan") to the Borrower in order to finance the Project. (d) Pursuant to a Loan Agreement (the "Loan Agreement ") to be entered into between the City and the Borrower, the Borrower has agreed to repay the Note in specified amounts and at specified times sufficient to pay in full when due the principal of, premium, if any, and interest on the Note. In addition, the Loan Agreement contains provisions relating to the maintenance and operation of the Project, indemnification, insurance, and other agreements and covenants which are required or permitted by the Act and which the City and the Borrower deem necessary or desirable for the financing of the Project. A draft of the Loan Agreement has been submitted to the City Council. (e) Pursuant to the Loan Agreement the proceeds of the Note will be disbursed to the Borrower for the Project. (f) Pursuant to a Pledge Agreement to be entered into between the City and the Lender, the City has pledged and granted a security interest in all of its rights, title, and interest in the Loan Agreement to the Lender (except for certain rights of indemnification and to reimbursement for certain costs and expenses). A draft of the Pledge Agreement has been submitted to the City Council. (g) The Note will be a special limited obligation of the City. The Note shall not be payable from or charged upon any funds other than the revenues pledged to the payment thereof, nor shall the City be subject to any liability thereon. No holder of the Note shall ever have the right to compel any exercise of the taxing power of the City to pay the Note or the interest thereon, nor to enforce payment thereof against any property of the City. The Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. (h) It is desirable, feasible and consistent with the objects and purposes of the Act to issue the Note, for the purpose of financing the costs of the Project. 2 2590986v2 1.2 Authorization and Ratification of Project. The City has heretofore and does hereby authorize the Borrower, in accordance with the provisions of the Act and subject to the terms and conditions imposed by the Lender, to provide for the financing of the Project by such means as shall be available to the Borrower and in the manner determined by the Borrower and without advertisement for bids as may be required for the construction and acquisition of other municipal facilities; the City hereby ratifies, affirms, and approves all actions heretofore taken by the Borrower consistent with and in anticipation of such authority; and the Borrower is hereby authorized to make such expenditures and advances toward redemption of the Refunded Bonds to be financed from the proceeds of the Note as the Borrower considers necessary, if and when delivered, but otherwise without liability on the part of the City. SECTION 2 THE NOTE. 2.1 Authorized Amount and Form of Note. The Note issued pursuant to this Resolution shall be in substantially the form submitted to the City Council with such appropriate variations, omissions and insertions as are necessary and appropriate and are permitted or required by this Resolution, and in accordance with the further provisions hereof; and the total aggregate principal amount of the Note that may be outstanding hereunder is expressly limited to $6,500,000, unless a duplicate Note is issued pursuant to Section 2.7. The Note shall bear interest at a variable rate as set forth therein. 2.2 The Note. The Note shall be dated as of the date of delivery to the Lender, shall be payable at the times and in the manner, shall bear interest at the rate, and shall be subject to such other terms and conditions as are set forth therein. 2.3 Execution. The Note shall be executed on behalf of the City by the signatures of its Mayor and City Administrator and shall be sealed with the seal of the City; provided that the seal may be intentionally omitted as provided by law. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if had remained in office until delivery. In the event of the absence or disability of the Mayor or City Administrator, such officers of the City as, in the opinion of the city attorney, may act on his or her behalf, shall without further act or authorization of the City Council execute and deliver the Note. 2.4 Delivery of Initial Note. Before delivery of the Note there shall be filed with the Lender (except to the extent waived by the Lender) the following items: (1) an executed copy of each of the following documents: (a) the Loan Agreement; and (b) the Pledge Agreement; (2) an opinion of Counsel for the Borrower as prescribed by the Lender and Bond Counsel; (3) the opinion of Bond Counsel as to the validity and tax exempt status of the Note; 2590986v2 3 (4) a 501(c)(3) determination letter or comparable evidence from the Internal Revenue Service evidencing that the Borrower is exempt from income taxation under Section 501(c)(3) of the Code; and (5) such other documents and opinions as Bond Counsel may reasonably require for purposes of rendering its opinion required in subsection (3) above or that the Lender may reasonably require for the closing. 2.5 Disposition of Proceeds of the Note. Upon delivery of the Note to Lender, the Lender shall, on behalf of the City, disburse the proceeds of the Note for payment of Project Costs in accordance with the terms of the Loan Agreement. 2.6 Registration of Transfer. The City will cause to be kept at the office of the City Clerk a Note Register for the Note in which, subject to such reasonable regulations as it may prescribe, the City shall provide for the registration of transfers of ownership of the Note. The Note shall be initially registered in the naive of the Lender and shall be transferable upon the Note Register by the Lender in person or by its agent duly authorized in writing, upon suurender of the Note together with a written instrument of transfer satisfactory to the City Clerk, duly executed by the Lender or its duly authorized agent. The following form of assignment shall be sufficient for said purpose. For value received hereby sells, assigns and transfers unto the within Note of the City of Mendota Heights, Minnesota, and does hereby irrevocably constitute and appoint attorney to transfer said Note on the books of said City with full power of substitution in the premises. The undersigned certifies that the transfer is made in accordance with the provisions of Section 2.9 of the Resolution authorizing the issuance of the Note. Dated: Registered Owner Upon such transfer the City Clerk shall note the date of registration and the name and address of the new holder in the applicable Note Register and in the registration blank appearing on the Note. 2.7 Mutilated, Lost or Destroyed Note. In case any Note issued hereunder shall become mutilated or be destroyed or lost, the City shall, if not then prohibited by law, cause to be executed and delivered, a new Note of like outstanding principal amount, number and tenor in exchange and substitution for and upon cancellation of such mutilated Note, or in lieu of and in substitution for such Note destroyed or lost, upon the Lender's paying the reasonable expenses and charges of the City in connection therewith, and in the case of a Note destroyed or lost, the filing with the City of evidence satisfactory to the City with indemnity satisfactory to it. If the mutilated, destroyed or lost Note has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Note prior to payment. 2.8 Ownership of Note. The City may deem and treat the person in whose name the Note is last registered in the applicable Note Register and by notation on the applicable Note 4 2590986v2 whether or not such Note shall be overdue, as the absolute owner of such Note for the purpose of receiving payment of or on account of the Principal Balance, redemption price or interest and for all other purposes whatsoever, and the City shall not be affected by any notice to the contrary. 2.9 Limitation on Note Transfers. The Note will be issued to an "accredited investor" and without registration under state or other securities laws, pursuant to an exemption for such issuance; and accordingly the Note may not be assigned or transferred in whole or part, nor may a participation interest in the Note be given pursuant to any participation agreement, except to another "accredited investor" or "financial institution" in accordance with an applicable exemption from such registration requirements and with full and accurate disclosure of all material facts to the prospective purchaser(s) or transferee(s). 2.10 Issuance of New Notes. Subject to the provisions of Section 2.9, the City shall, at the request and expense of the Lender, issue new notes, in aggregate outstanding principal amount equal to that of the Note surrendered, and of like tenor except as to number, principal amount, and the amount of the monthly installments payable thereunder, and registered in the name of the Lender or such transferee as may be designated by the Lender. SECTION 3 GENERAL COVENANTS 3.1 Payment of Principal and Interest. The City covenants that it will promptly pay or cause to be paid the principal of and interest on the Note at the place, on the dates, solely from the source and in the manner provided herein and in the Note. The principal and interest are payable solely from and secured by revenues and proceeds derived from the Loan Agreement and the Pledge Agreement, which revenues and proceeds are hereby specifically pledged to the payment thereof in the manner and to the extent specified in the Note, the Loan Agreement, and the Pledge Agreement; and nothing in the Note or in this Resolution shall be considered as assigning, pledging or otherwise encumbering any other funds or assets of the City. 3.2 Performance of and Authority for Covenants. The City covenants that it will faithfully perform at all times any and all covenants, undertakings, stipulations and provisions contained in this Resolution, in the Note executed, authenticated and delivered hereunder and in all proceedings of the City Council pertaining thereto; that it is duly authorized under the Constitution and laws of the State of Minnesota including particularly and without limitation the Act, to issue the Note authorized hereby, pledge the revenues and assign the Loan Agreement in the manner and to the extent set forth in this Resolution, the Note, the Loan Agreement, and the Pledge Agreement, that all action on its part for the issuance of the Note and for the execution and delivery thereof has been duly and effectively taken; and that the Note in the hands of the Purchaser is and will be a valid and enforceable special limited obligation of the City according to the terms thereof. 3.3 Enforcement and Performance of Covenants. The City agrees to enforce all covenants and obligations of the Borrower under the Loan Agreement upon request of the Lender and being indemnified to the satisfaction of the City for all expenses and claims arising therefrom, and to perform all covenants and other provisions pertaining to the City contained in the Note and the Loan Agreement and subject to Section 3.4. 5 2590986v2 3.4 Nature of Security. Notwithstanding anything contained in the Note, the Loan Agreement, the Pledge Agreement or any other document referred to in Section 2.4 to the contrary, under the provisions of the Act, the Note may not be payable from or be a charge upon any funds of the City other than the revenues and proceeds pledged to the payment thereof, nor shall the City be subject to any liability thereon, nor shall the Note otherwise contribute or give rise to a pecuniary liability of the City or, to the extent permitted by law, any of the City's officers, employees and agents. No holder of the Note shall ever have the right to compel any exercise of the taxing power of the City to pay the Note or the interest thereon, or to enforce payment thereof against any property of the City other than the revenues pledged under the Pledge Agreement; and the Note shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City; and the Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; but nothing in the Act impairs the rights of the Lender to enforce the covenants made for the security thereof as provided in this Resolution, the Loan Agreement, and the Pledge Agreement, and in the Act, and by authority of the Act the City has made the covenants and agreements herein for the benefit of the Lender; provided that in any event, the agreement of the City to perform or enforce the covenants and other provisions contained in the Note, the Loan Agreement, and the Pledge Agreement shall be subject at all times to the availability of revenues under the Loan Agreement sufficient to pay all costs of such performance or the enforcement thereof, and the City shall not be subject to any personal or pecuniary liability thereon. SECTION 4 MISCELLANEOUS. 4.1 Severability. If any provision of this Resolution shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions or in all cases because it conflicts with any provisions of any constitution or statute or rule or public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. The invalidity of any one or more phrases, sentences, clauses or paragraphs in this Resolution contained shall not affect the remaining portions of this Resolution or any part thereof. 4.2 Authentication of Transcript. The officers of the City are directed to furnish to Bond Counsel certified copies of this Resolution and all documents referred to herein, and affidavits or certificates as to all other matters which are reasonably necessary to evidence the validity of the Note. All such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute recitals of the City as to the correctness of all statements contained therein. 4.3 Authorization to Execute Agreements. The forms of the proposed Loan Agreement, the Pledge Agreement, and the Note are hereby approved in substantially the form heretofore presented to the City Council, together with such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by Bond Counsel prior to the execution of the documents, and the Mayor and City Administrator are authorized to execute the Loan Agreement and the Pledge Agreement in the name of and on behalf of the City and such 6 2590986v2 other documents as Bond Counsel consider appropriate in connection with the issuance of the Note. In the event of the absence or disability of the Mayor or City Administrator, such officers of the City as, in the opinion of the City Attorney, may act on his or her behalf, shall without further act or authorization of the City do all things and execute all instruments and documents required to be done or executed by such absent or disabled officers. The execution of any instrument by the appropriate officer or officers of the City herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. 7 2590986v2 Adopted by the City Council of the City of Mendota Heights, this 17th day of August, 2010. ATTEST: BY Nam, 2590986v2 Acting City Clerk CITY COUNCIL CITY OF MENDOTA HEIGHTS 8 STATE OF MINNESOTA ) ) ss. COUNTY OF DAKOTA ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Mendota Heights (the "City "), do hereby certify that attached hereto is a compared, true and correct copy of a resolution giving final approval to an issuance of a revenue Note by the City on behalf of St. Thomas Academy, duly adopted by the City Council of the City on August 17, 2010, at a regular meeting thereof duly called and held, as on file and of record in my office, which resolution has not been amended, modified or rescinded since the date thereof, and is in full force and effect as of the date hereof, and that the attached Extract of Minutes as to the adoption of such resolution is a true and accurate account of the proceedings taken in passage thereof. WITNESS My hand this l� —day of August, 2010. Acting Ci \Clerk 9 2590986v2