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,
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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:
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(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
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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
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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:
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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.
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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;
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(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.
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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.
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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 =
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