Loading...
HomeMy WebLinkAboutCity Council Resolution 2022-116 Extract of Minutes of a Meeting of the City Council of the City of Plymouth, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Plymouth, Minnesota was duly held in the City of Plymouth, Minnesota, on Tuesday,April 12, 2022, at 7:00 o'clock P.M. The following members were present: Wosje, Carroll, Davis, McGregor, Roehl, Prom, and Willis and the following were absent: None During said meeting Roehl introduced the following resolution and moved its adoption: RESOLUTION NO. 2022-116 RESOLUTION APPROVING THE ISSUANCE AND SALE OF AN EDUCATIONAL FACILITIES REVENUE NOTE, SERIES 2022B AND AUTHORIZING THE EXECUTION OF DOCUMENTS RELATING THERETO (SOUTHWEST CHRISTIAN HIGH SCHOOL PROJECT) WHEREAS, (a) Minnesota Statutes,Sections 469.152 to 469.165, as amended (the "Act"), authorizes cities to issue revenue bonds to finance or refinance industrial development projects to promote the welfare of the state by the active development of economically sound industry and commerce to meet the needs of an increasing population and the need for development of land use which will provide an adequate tax base to finance the increasing cost of governmental services and access to employment opportunities for such population; (b) Factors necessitating the active promotion and development of economically sound industry and commerce are the increasing concentration of population in the metropolitan areas and the rapidly rising increase in the amount and cost of governmental services required to meet the needs of the increased population and the need for development of land use which will provide an adequate tax base to finance these increased costs and the need for access to employment opportunities for such population; (c) The City Council of the City of Plymouth, Minnesota (the "City") has received from Southwest Christian High School, a Minnesota nonprofit corporation organized under the laws of the State of Minnesota (the "Borrower"), a proposal that the City,along with the City of Carver, 73177263v3 Minnesota or another Minnesota governmental entity("Carver"), undertake a program to finance the Project(as defined below)through the issuance of revenue notes or other obligations, in one or more series pursuant to the Act, and in connection therewith the following described notes are to be issued: (i) City of Plymouth, Minnesota Educational Revenue Note(Southwest Christian High School Project) Series 20226(the"Plymouth Note")and (ii)City of Carver, Minnesota Educational Revenue Note (Southwest Christian High School Project)Series 2022A(the "Carver Note"and together with the Plymouth Note,the"Notes"), in the total aggregate principal amount not to exceed $15,000,000; (d) The City desires to facilitate the selective development of the surrounding community, retain and improve the tax base and help to provide the range of services and employment opportunities required by the population, including educational services;and the Project will assist the City in achieving those objectives and will enhance the image and reputation of the City and the surrounding community; (e) The Project to be financed by the Notes consists of(i) refinancing the City of Chaska, Minnesota Educational Facilities Revenue Note(Southwest Christian High School Project),Series 2012, dated November 19, 2012,the proceeds of which were used to finance, in part,the acquisition, construction and equipping of a high school facility located at 1981 Bavaria Road in Chaska, Minnesota (the"School Facility"), including classrooms, administrative offices, a media/student center, music and practice rooms,art and science rooms, and a two-stage gymnasium; (ii) refinancing a taxable loan evidenced by a promissory note,dated October 19,2018,the proceeds of which financed the acquisition, construction,and equipping of additional classrooms,offices, and other spaces at the School Facility;and (iii)financing the acquisition,construction, and equipping, of an athletic field house and related facilities at the School Facility; (f) The City has been advised by representatives of the Borrower that,with the aid of municipal financing, and its resulting lower borrowing cost,the Project is economically more feasible; (g) Based on representations of the Borrower, 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; and (h) The Notes,as and when issued,will not constitute a charge, lien or encumbrance upon any property of the City,Carver,or the City of Chaska and will not be a charge against the general credit or taxing powers of the City,Carver,or the City of Chaska; (i) A public hearing on the Project was held on April 12, 2022,after notice was published and materials made available for public inspection at the City Hall, all as required by the Act and Section 147(f)of the Internal Revenue Code of 1986,as amended,at which public hearing all those appearing who desired to speak were heard and written comments were accepted. BE IT RESOLVED by the City Council of the City of Plymouth, Minnesota (the"City"),as follows: SECTION 1. LEGAL AUTHORIZATION AND FINDINGS. 1.1 Findings. The City hereby finds, determines and declares as follows: 2 73177263v3 (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 revenue producing project herein referred to,and to issue and sell the Plymouth Note, as hereinafter defined,for the purpose,in the manner and upon the terms and conditions set forth in the Act and in this Resolution. (b) The issuance and sale of the Educational Facilities Revenue Note,Series 2022B, (Southwest Christian High School Project) (the"Plymouth Note") by the City, pursuant to the Act, is in the best interest of the City, and the City hereby determines to issue the Plymouth Note and to sell the Plymouth Note to Old National Bank, a national banking association with one of its locations in the City of Chaska or another banking institution with one or more locations in Minnesota (the "Lender"), as provided in an Agreement to Purchase (the "Purchase Agreement")to be entered into between the Borrower,the City,and the Lender.A draft of the Purchase Agreement has been submitted to the City Council.The City will loan the proceeds of the Plymouth Note(the "Loan")to the Borrower in order to finance the Project. (c) 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 Plymouth 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 Plymouth 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. (d) Pursuant to a Pledge Agreement (the"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. (e) Pursuant to a Combination Mortgage,Assignment of Leases and Rents,Security Agreement and Fixture Financing Statement(the"Mortgage")to be executed by the Borrower and the Lender,the Borrower has secured payment of amounts due under the Loan Agreement and Plymouth Note by granting to the Lender a mortgage and security interest in the property described therein.A draft of the Mortgage has been submitted to the City Council.The City is not a party to the Mortgage. (f) The Plymouth Note will be a special, limited obligation of the City.The Plymouth 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 Plymouth Note shall ever have the right to compel any exercise of the taxing power of the City to pay the Plymouth Note or the interest thereon, nor to enforce payment thereof against any property of the City.The Plymouth Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. (g) Nothing in this resolution or the documents prepared pursuant hereto shall authorize the expenditure of any municipal funds on the Project other than the revenues derived from the Project or otherwise granted to the City for this purpose.The Plymouth Note 3 73177263v3 shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property or funds of the City except the revenue and proceeds pledged to the payment thereof, nor shall the City be subject to any liability thereon.The holder of the Plymouth Note shall never have the right to compel any exercise of the taxing power of the City to pay the outstanding principal on the Plymouth Note or the interest thereon,or to enforce payment thereon against any property of the City, except such property as may be expressly pledged for the security of the Plymouth Note.The Plymouth Note shall recite in substance that the Plymouth Note, including the interest thereon, is payable solely from the revenue derived from the Project and pledged to the payment thereof. (h) On the basis of information available to the City it appears, and the City hereby finds,that the Project constitutes properties, real and personal, used or useful in connection with educational facilities within the meaning of the Act;that the Project furthers the purposes stated in the Act;that the availability of the financing under the Act and the willingness of the City to furnish such financing will be a substantial inducement to the Borrower to undertake the Project,and that the effect of the Project, if undertaken,will be to assist in the prevention of the emergence of blighted and marginal land,to help prevent chronic unemployment,to help the surrounding area retain and eventually improve the tax base,to provide the range of service and employment opportunities required by the population,to help prevent the movement of talented and educated persons out of the state and to areas within the State where their services may not be as effectively used,and to promote more intensive development and use of land within the City and surrounding communities, and to provide available adequate educational facilities to residents of the State at a reasonable cost. (i) It is desirable,feasible, and consistent with the objects and purposes of the Act to issue the Plymouth Note for the purpose of financing a portion of the costs of the Project. SECTION 2. THE PLYMOUTH NOTE. 2.1 Authorized Amount and Form of Plymouth Note. The Plymouth Note is hereby approved and shall be issued pursuant to this Resolution 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 Plymouth Note that may be outstanding hereunder is expressly limited to$10,000,000, unless a duplicate Note is issued pursuant to Section 2.7.The Plymouth Note shall bear interest at a variable rate as set forth therein. 2.2 The Plymouth Note. The Plymouth 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 Plymouth Note shall be executed on behalf of the City by the signatures of its Mayor and the City Manager 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 Plymouth Note shall cease to be such officer before the delivery of the Plymouth 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 the City Manager such officers of the 4 73177263v3 City as, in the opinion of the City Attorney, may act in their behalf,shall without further act or authorization of the City Council execute and deliver the Plymouth Note. 2.4 Delivery of Initial Note. Before delivery of the Plymouth 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 Purchase Agreement; (b) the Loan Agreement; (c) the Pledge Agreement;and (d) the Mortgage; (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 Plymouth Note; (4) a 501(c)(3) determination letter from the Internal Revenue Service evidencing that the Borrower is exempt from income taxation under Section 501(c)(3)of the Code; (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 Plymouth Note. Upon delivery of the Plymouth Note to Lender,the Lender shall,on behalf of the City,disburse the proceeds of the Plymouth Note for payment of costs of the Project 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 Manager a Note Register in which,subject to such reasonable regulations as it may prescribe,the City shall provide for the registration of transfers of ownership of the Plymouth Note.The Plymouth Note shall be initially registered in the name 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 surrender of the Note together with a written instrument of transfer satisfactory to the City Manager,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 Plymouth, 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: 5 73177263v3 Registered Owner Upon such transfer the City Manager shall note the date of registration and the name and address of the new Lender in the applicable Note Register and in the registration blank appearing on the Note. 2.7 Mutilated, Lost or Destroyed Note. In case the Plymouth 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 Plymouth Note. The City may deem and treat the person in whose name the Plymouth Note is last registered in the Note Register and by notation on the Plymouth Note 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 Plymouth 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 Plymouth Note may not be assigned or transferred in whole or part, nor may a participation interest in the Plymouth 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 a New Note. Subject to the provisions of Section 2.9,the City shall, at the request and expense of the Lender, issue a new note, in aggregate outstanding principal amount equal to that of the Plymouth Note surrendered, and of like tenor except as to number, principal amount,and the amount of the periodic 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 Plymouth Note at the place,on the dates, solely from the source and in the manner provided herein and in the Plymouth Note.The principal and interest are payable solely from and secured by revenues and proceeds derived from the Loan Agreement,the Pledge Agreement and the Mortgage,which revenues and proceeds are hereby specifically pledged to the payment thereof in the manner and to the extent specified in the Plymouth Note,the Loan Agreement,the Pledge Agreement and the Mortgage;and nothing in the Plymouth Note or in this Resolution shall be considered as assigning, pledging or otherwise encumbering any other funds or assets of the City. 6 73177263v3 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 Plymouth 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 Acts,to issue the Plymouth Note authorized hereby, pledge the revenues and assign the Loan Agreement in the manner and to the extent set forth in this Resolution,the Plymouth Note,the Loan Agreement,the Pledge Agreement, and the Mortgage;that all action on its part for the issuance of the Plymouth Note and for the execution and delivery thereof has been duly and effectively taken;and that the Plymouth Note in the hands of the Lender 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 Plymouth Note and the Loan Agreement and subject to Section 3.4. 3.4 Nature of Security. Notwithstanding anything contained in the Plymouth 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 Acts the Plymouth 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 Plymouth 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 Plymouth Note shall ever have the right to compel any exercise of the taxing power of the City to pay the Plymouth 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 Plymouth Note shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City; and the Plymouth 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 Acts, and by authority of the Acts 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 Plymouth 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. 3.5 Qualified Tax Exempt Obligation. In order to qualify the Plymouth Note as a"qualified tax-exempt obligation"within the meaning of Section 265(b)(3)of the Internal Revenue Code of 1986,as amended (the"Code"),the City hereby makes the following factual statements and representations; (a) the Plymouth Note is not treated as a "private activity bond" under Section 265(b)(3)of the Code; (b) the City hereby designates the Plymouth Note as a qualified tax-exempt obligation for purposes of Section 265(b)(3)of the Code; 7 73177263v3 (c) the reasonably anticipated amount of tax-exempt obligations (other than obligations described in clause(ii)of Section 265(b)(3)(C)of the Code)which will be issued by the City(and all entities whose obligations will be aggregated with those of the City) during the calendar year 2022 will not exceed$10,000,000; (d) not more than$10,000,000 of obligations issued by the City during the calendar year 2022 have been designated for purposes of Section 265(b)(3)of the Code; and (e) the aggregate face amount of the Plymouth Note does not exceed $10,000,000. 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 Plymouth 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, Pledge Agreement, and Purchase Agreement are hereby approved in substantially the form 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.The Mayor and the City Manager of the City are authorized to execute the Purchase Agreement,the Loan Agreement, and the Pledge Agreement and such other documents as Bond Counsel consider appropriate in connection with the issuance of the Plymouth Note, in the name of and on behalf of the City. In the event of the absence or disability of the Mayor or the City Manager such officers of the City as, in the opinion of the City Attorney, may act on their behalf, shall without further act or authorization of the City Council 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. 8 73177263v3 Adopted by the City Council of the City of Plymouth, Minnesota,this 12th day of April, 2022. The motion for the adoption of the foregoing resolution was duly seconded by Member McGregor and after full discussion thereof and upon vote being taken thereon,the following voted in favor thereof: Wosje,Carroll, McGregor, Roehl and the following voted against the same: Davis, Prom,Willis whereupon said resolution was declared duly passed and adopted. 9 73177263v3 STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF PLYMOUTH I,the undersigned, being the duly qualified and acting City Clerk of the City of Plymouth, Minnesota, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office,and that the same is a full,true and complete transcript of the minutes of a meeting of the City Council duly called and held on the date therein indicated, insofar as such minutes relate to a resolution authorizing the issuance of a revenue note. WITNESS my hand this i3 day of April, 2022. ytii). _____ (10, ,,ir ":___ Cit Clerk = 10 73177263v3