HomeMy WebLinkAboutCity Council Resolution 2017-128
Extract of Minutes of a Meeting of the
City Council of the City of Plymouth
Pursuant to due call and notice thereof, a regular meeting of the City Council of the City
of Plymouth was duly held in the City of Plymouth, Minnesota, on Tuesday, April 11, 2017, at
7:00 o'clock P.M.
The following members were present: Mayor Slavik, Councilmembers Johnson, Willis,
Prom, Carroll, Wosje, and Davis.
and the following were absent: None.
During said meeting Willis introduced the following resolution and moved its adoption:
RESOLUTION NO. 2017-128
RESOLUTION APPROVING THE ISSUANCE AND SALE OF
COMMUNITY DEVELOPMENT REVENUE NOTES AND AUTHORIZING
THE EXECUTION OF DOCUMENTS RELATING THERETO
(FAMILY CHILD DEVELOPMENT CENTER PROJECT)
WHEREAS,
(a) The purpose of Minnesota Statutes, Sections 469.152 to 469.165, as
amended (the "Act"), as found and determined by the legislature, is to promote the welfare of the
state by the active attraction and encouragement and development of economically sound industry
and commerce to prevent so far as possible the emergence of obligated and marginal lands and
areas of chronic unemployment;
(b) The City of Plymouth, Minnesota (the "City") desires to facilitate the
selective development of the community, retain and improve the tax base and help to provide the
range of services and employment opportunities required by the population, including early
childhood education services to its families and children; and the Project, as defined below, will
assist the City in achieving those objectives and will enhance the image and reputation of the
community;
(c) Family Child Development Center, a Minnesota nonprofit corporation (the
"Borrower") and an organization described in Section 501(c)(3) of the Internal Revenue Code of
1986, as amended (the "Code"), has proposed that the City undertake a program to finance and
refinance the Project through the issuance of revenue notes or other obligations, in one or more
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series (the "Notes") pursuant to the Act and in an aggregate principal amount not to exceed
$1,000,000;
(d) The "Project" consists of: (i) refunding the City's outstanding Commercial
Development Revenue Note (Family Child Development Center Project), Series 2006, as amended
(the "Prior Note"), the proceeds of which were used to finance, in part, the acquisition of the
Borrower's early childhood education and childcare center located at 100 Nathan Lane North in
the City (the "Facility"), (ii) refinancing existing taxable debt of the Borrower related to the
acquisition, in part, of the Facility, (iii) financing renovations to the Facility, and (iv) financing the
costs of issuing the Notes. The Facility is owned, operated, and managed by the Borrower;
(e) The City has been advised by representatives of the Borrower that
conventional, commercial financing to pay the capital cost of the Project is available only on a
limited basis and at such high costs of borrowing that the economic feasibility of operating the
Facility would be significantly reduced;
(f) 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;
(g) The Notes, as and when issued, will not constitute a charge, lien, or
encumbrance upon any property of the City and will not be a charge against the general credit or
taxing powers of the City;
(h) As required by the Act and Section 147(f) of the Code, a notice of public
hearing was published in the City's official newspaper and newspaper of general circulation, for a
public hearing on the proposed issuance of the Notes by the City and the proposal of the Borrower
to undertake and finance and refinance the Project; and
(i) As required by the Act and Section 147(f) of the Code, the City Council has
on this same date held a public hearing on the issuance of the Notes by the City and the proposal
by the Borrower to undertake and finance and refinance the Project, at which 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:
(a) The City is a municipal corporation and a political subdivision of the State
of Minnesota and is authorized under the Act and its Charter to assist the project referred
to herein, and to issue and sell the Notes, 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 Notes by the City, pursuant to the Act, is in the
best interest of the City, and the City hereby determines to issue the Notes and to sell the
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Notes to Sunrise Banks, National Association, a national banking association, Minneapolis,
Minnesota, or another bank in Minnesota (the "Lender"). The City will loan the proceeds
of the Notes (the "Loan") to the Borrower in order to finance and refinance 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 Notes in specified
amounts and at specified times sufficient to pay in full when due the principal of, premium,
if any, and interest on the Notes. In addition, the Loan Agreement contains provisions
relating to the maintenance and operation of the Facility, 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 their 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 an Amended and Restated Mortgage, Security Agreement,
Assignment and Leases of Rents, and Fixture Financing Statement (the "Mortgage")
between the Borrower and the Lender, the Borrower has secured payment of amounts due
under the Loan Agreement and Notes 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.
(f) The Notes will be a special, limited obligation of the City. The Notes 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
Notes shall ever have the right to compel any exercise of the taxing power of the City to
pay the Notes or the interest thereon, nor to enforce payment thereof against any property
of the City. The Notes shall not constitute a debt of the City within the meaning of any
constitutional or statutory limitation.
(g) 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 an early childhood education and child care facility 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
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the City and surrounding communities, and to provide available adequate early childhood
education and child care services to residents of the State at a reasonable cost.
(h) It is desirable, feasible, and consistent with the objects and purposes of the
Act to issue the Notes, for the purpose of financing and refinancing the costs of the Project.
(i) The City has determined to proceed with the Project and the financing
thereof as required by Section 469.154 Subd. 4 of the Act and authorizes application to the
Department of Employment and Economic Development ("DEED") for the approval of the
Project.
SECTION 2. THE NOTES.
2.1 Authorized Amount and Form of Plymouth Notes. The Notes are 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 Notes that may be outstanding
hereunder is expressly limited to $1,000,000, unless a duplicate Note is issued pursuant to Section
2.7. The Notes shall bear interest at a rate or rates as set forth therein.
2.2 The Notes. The Notes 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 Notes 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 Notes shall cease to be such officer before the delivery of the Notes, 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 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 Notes.
2.4 Delivery of Initial Notes. Before delivery of the Notes 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;
(b) the Pledge Agreement; and
(c) the Mortgage;
(2) an opinion of Counsel for the Borrower as prescribed by the Lender and
Bond Counsel;
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(3) the opinion of Bond Counsel as to the validity and tax exempt status of the
Notes;
(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; 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 Notes. Upon delivery of the Notes to Lender, the
Lender shall, on behalf of the City, disburse the proceeds of the Notes for 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 Notes. The Notes shall be
initially registered in the name of the Lender and shall be transferable upon the Notes Register by
the Lender in person or by its agent duly authorized in writing, upon surrender of the Notes 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
Notes.
Dated:
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
Notes.
2.7 Mutilated, Lost or Destroyed Note. In case the Notes 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,
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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
Notes is last registered in the Notes Register and by notation on the Notes 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 Notes 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 Notes may not be assigned or transferred in whole or part, nor may
a participation interest in the Notes 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 Notes 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 Notes at the place, on the dates, solely from
the source and in the manner provided herein and in the Notes. 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 Notes, the Loan Agreement, and
the Pledge Agreement; and nothing in the Notes 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 Notes 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 Notes authorized hereby, pledge the revenues and assign the Loan Agreement in
the manner and to the extent set forth in this Resolution, the Notes, the Loan Agreement, the Pledge
Agreement, and the Mortgage; that all action on its part for the issuance of the Notes and for the
execution and delivery thereof has been duly and effectively taken; and that the Notes 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.
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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 Notes and
the Loan Agreement and subject to Section 3.4.
3.4 Nature of Security. Notwithstanding anything contained in the Notes, the Loan
Agreement, the Pledge Agreement, the Mortgage, or any other document referred to in Section 2.4
to the contrary, under the provisions of the Act the Notes 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 Notes 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 Notes shall ever have the right to compel any
exercise of the taxing power of the City to pay the Notes 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 Notes shall not constitute a charge, lien or encumbrance, legal or equitable,
upon any property of the City; and the Notes 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, the Pledge Agreement, and the Mortgage, 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 Notes, the Loan Agreement, the Pledge Agreement, and the Mortgage,
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 Notes as "qualified tax-
exempt obligations" 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 Notes are not treated as a "private activity bond" under Section
265(b)(3) of the Code;
(b) the City hereby designates the Notes as qualified tax-exempt obligations for
purposes of Section 265(b)(3) of the Code;
(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 2017 will not exceed $10,000,000;
(d) not more than $10,000,000 of obligations issued by the City during the
calendar year 2017 have been designated for purposes of Section 265(b)(3) of the Code;
and
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(e) the aggregate face amount of the Notes 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 Notes. 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 Mortgage, 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 Loan
Agreement, the Pledge Agreement, and the Mortgage, and such other documents as Bond Counsel
consider appropriate in connection with the issuance of the Notes, 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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The motion for the adoption of the foregoing resolution was duly seconded by Member
Johnson, and after full discussion thereof and upon vote being taken thereon, the following voted
in favor thereof: All members voted in favor.
and the following voted against the same:
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,
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 revenue notes.
WITNESS my hand this ____ day of _______________, 2017.
_______________________________________
City Clerk
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