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HomeMy WebLinkAboutResolution No. 481-12 • CITY OF ROCHESTER,1VlI1NNESOTA RESOLUTION NO. -481`1 Z RESOLUTION GIVING PRELEVIINARY APPROVAL TO THE PROPOSED ISSUANCE OF REVENUE BONDS FOR ROCHESTER SENIOR HOUSING, NIINNESOTA STATUTES, CHAPTER 462C AND CALLING FOR A PUBLIC HEARING WITH RESPECT THERETO WHEREAS; the City of Rochester, Minnesota, a home rule charter city and a political subdivision of the State of Minnesota(the"Issuer") is duly organized and existing under the Constitution and laws of the State of Minnesota(the"State"); and WHEREAS,the Issuer is authorized, pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Act") to develop and administer programs to finance one or more multifamily housing developments within its boundaries; and WHEREAS, Section 462C.07 of the Act authorizes the Issuer to issue and sell revenue bonds or obligations to finance programs for the multifamily housing developments; and WHEREAS, representatives of Rochester Senior Housing, a Minnesota nonprofit corporation, or its affiliates or assigns (the 'Borrower") has requested that the Issuer adopt a multifamily housing development program (the "Program")to provide for the issuance of up to $5,000,000 of its tax-exempt • multifamily housing revenue bonds, in one or more series (the 'Bonds") for the purpose of loaning the proceeds thereof to the Borrower to finance the acquisition and construction by the Borrower of a 40-unit rental housing development to be located at the corner of Highway 14 SE and Towne Club Parkway in the City of Rochester(the"Project"); and WHEREAS, the Project is more particularly described in the Housing Program developed pursuant to the Act with respect thereto, a copy of which Housing Program is attached hereto as Exhibit B (the "Housing Program"); and WHEREAS,the Borrower has paid and expects to pay certain expenditures (the "Reimbursement Expenditures") in connection with the Project prior to the issuance of indebtedness for the purpose of financing costs associated with the Project on a long-term basis and certain of the proceeds of the Bonds will be used to reimburse the Reimbursement Expenditures; and WHEREAS, the Bonds (if issued) shall be a limited obligation of the Issuer, and shall not constitute nor give rise to a pecuniary liability of the Issuer or a charge against its general credit or taxing powers, and the principal of, interest and premium, if any, on the Bonds shall be payable solely out of the revenues derived from the loan agreement and security provided therefor; and WHEREAS, Bond Counsel has advised that, pursuant to Section 462C.04, Subd. 2, of the Act and Section 147(fl of the Internal Revenue Code, as a condition to the issuance of the Bonds, it is necessary to conduct a public hearing on the issuance of the Bonds and on the Housing Program and to publish notice of said public hearing not less than 15 days prior to the date fixed for the hearing. • 4831-7168-3345.3 • WHEREAS, pursuant to the Act and the Code, the Issuer and the Borrower shall work with the staff of the Issuer to coordinate the publication of such notice in accordance with applicable law. NOW,THEREFORE,BE IT RESOLVED THAT: 1. A public hearing shall be conducted by the Common Council on the issuance of said Bonds and on the Housing Program, such hearing to be held at a meeting of the Common Council on Monday,December 17,2012,beginning at 7:00 o'clock p.m. in the in the Council/Board Chambers in the Olmsted County Government Center, at which hearing all parties who appear shall be given an opportunity to express their views with respect to the issuance of the Bonds and the Housing Program. 2. Notice of such public hearing, in substantially the form attached hereto as Exhibit A, shall be published at least once not less than 15 days prior to the date fixed for the hearing,in a newspaper having a general circulation in the City of Rochester. 3. Prior to publication of said notice the Borrower shall cause a copy of the Housing Program to be submitted to the regional development commission for the area in which the City of Rochester is located, if any,for review and comments. 4. The Issuer hereby grants preliminary approval for the issuance of the Bonds for the purposes referenced in this resolution and in an original aggregate principal amount estimated not to exceed $5,000,000 subject to (i) a public hearing with respect to the Bonds and the Project being held by the Common Council and the adoption of a final resolution of the Common Council authorizing the • issuance of the Bonds; and (ii) the mutual agreement of the Issuer, the Borrower and The Sturges Company, as the initial purchaser (the "Purchaser") of the Bonds as to the details of the Bonds and provisions for their payment. In all events, it is understood, however, that the Bonds shall not constitute a pecuniary liability or charge, lien or encumbrance, legal or equitable, upon any funds, assets, faxing powers, or any other property of the Issuer except the Issuer's interest in the to-be-entered-into Loan Agreement; and the Bonds, when, as, and if issued, shall recite in substance that the Bonds, including interest thereon, are payable solely from the revenues received from the Loan Agreement and other property pledged to the payment thereof by the Borrower, and shall not constitute general or moral obligations of the Issuer. The holder(s) of the Bonds shall never have the right to compel any exercise of the taxing power of the Issuer to pay the outstanding principal of the Bonds, or the interest thereon or to enforce payment thereof against any property of the Issuer. 5. The adoption of this resolution does not constitute a guaranty or firm commitment that the Issuer will issue the Bonds as requested by the Borrower. The Issuer retains the right in its sole discretion to withdraw from participation and accordingly not to issue the Bonds, or issue the Bonds in an amount less that the amount referred to herein, should the Issuer at any time prior to issuance thereof determine not to issue the Bonds, or to issue the Bonds in an amount less than the amount referred to in paragraph 4 hereof, or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents required for the transaction. 6. Bond counsel and Issuer staff are hereby authorized to publish the notice of public hearing with respect to the Bonds and the Project in substantially the form attached hereto as Exhibit A. 4831-7168-3345.3 2 7. (a) The United States Department of the Treasury has promulgated final regulations • governing the use of the proceeds of tax-exempt bonds, all or a portion of which are to be used to reimburse the Issuer or a borrower from the Issuer for project expenditures paid prior to the date of issuance of such bonds. Those regulations, Treasury Regulations, Section 1.150-2 (the "Regulations"), require that the Issuer adopt a statement of official intent to reimburse an original expenditure not later than sixty(60) days after payment of the original expenditure. The Regulations also generally require that the bonds be issued and the reimbursement allocation made from the proceeds of the bonds occur within eighteen (18) months after the later of: (i) the date the expenditure is paid; or (ii) the date the project is placed in service or abandoned, but in no event more than three (3) years after the date the expenditure is paid. The Regulations generally permit reimbursement of capital expenditures and costs of issuance of the Bonds. (b) The Issuer reasonably expects the Borrower will be reimbursed for the expenditures made for costs of the Project from the proceeds of the tax-exempt Bonds in an estimated maximum aggregate principal amount not to exceed$5,000,000 after the date of payment of all or a portion of the costs of the Project. All reimbursed expenditures shall be capital expenditures, a cost of issuance of the Bonds, or other expenditures eligible for reimbursement under Section 1.150-2(d)(3) of the Regulations and also qualifying expenditures under the Act. (c) Based on representations by the Borrower, no expenditures for the Project have been made by the Borrower more than sixty days before the date of adoption of this resolution other than: (i)expenditures to be paid or reimbursed from sources other than the Bonds; (ii)expenditures permitted to be reimbursed under prior regulations pursuant to the transitional provision contained in Section 1.150- 20)(2)(i)(B) of the Regulations; (iii)expenditures constituting preliminary expenditures within the meaning of Section 1.150-2(f)(2) of the Regulations; or (iv) expenditures in a "de minimus" amount (as defined in Section 1.150-2(f)(1)of the Regulations). (d) Based on representations by the Borrower, as of the date hereof,there are no funds of the Borrower reserved, allocated on a long term-basis or otherwise set aside (or reasonably expected to be reserved, allocated on a long-term basis or otherwise set aside) to provide permanent financing for the expenditures related to the Project to be financed from proceeds of the Bonds, other than pursuant to the issuance of the Bonds. This resolution, therefore, is determined to be consistent with the budgetary and financial circumstances of the Borrower as they exist or are reasonably foreseeable on the date hereof. 8. The Mayor or other authorized official of the Issuer is hereby authorized to submit an Application for Allocation of Bonding Authority to Minnesota Management and Budget, Treasury Division,in connection with this financing. 9. This Resolution shall be in full force and effect from and after its passage. • 4831-7168-3345.3 3 • PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS /gt7- DAY OF /-36Qar� , 20 iZ. ACTING PRE NT OF SAID COMMON COUNCIL ATTEST: TY CLERK APPROVED THIS Tcrx DAY OF ,c1crtt�ic3�C- , 20 /? v' MAYOR OF SAID CITY (SEAL OF THE CITY OF ROCHESTER, MINNESOTA) STATE OF MINNESOTA ) • ) COUNTY OF OLMSTED )SS. CITY OF ROCHESTER ) I,the undersigned,being the duly qualified and acting City Clerk of the City of Rochester,Minnesota (the"City"),do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the Common Council held on Monday,November 19,2012,with the original thereof on file in my office and the same is a full, true and complete transcript therefrom insofar as the same relates to the preliminary approval for the City to issues its Multifamily Housing Revenue Bonds in one or more series in an amount not to exceed$5,000,000. WITNESS My hand as City Clerk and the corporate seal of the City this ZDIX day of November,2012. • City Clerk City of Rochester,Minnesota (SEAL) 1 4831-7168-3345.3 EXHIBIT A • FORM OF NOTICE OF PUBLIC HEARING RESOLUTION CALLING FOR PUBLIC HEARING ON THE PROPOSED ISSUANCE OF HOUSING FACILITIES REVENUE BONDS IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $5,000,000,AT THE REQUEST OF ROCHESTER SENIOR HOUSING NOTICE IS HEREBY GIVEN that a public hearing shall be conducted by the Common Council of the City of Rochester(the"Issuer"),on a proposal that it issue its Housing Facilities Revenue Bonds,in an aggregate principal amount of not to exceed $5,000,000, in one or more series (the "Bonds"), and on the related Housing Program developed pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Act"), all at the request of Rochester Senior Housing, a. Minnesota nonprofit corporation (the "Borrower"). The hearing will be held at the Council/Board Chambers in the Olmsted County Government Center, located at 151 4th Street SE, Rochester, Minnesota, at a meeting of the Common Council to be held on Monday,December 17, 2012, beginning at 7:00 o'clock p.m. The proposed project to be financed by the Bonds consists of financing housing facilities for rental to the elderly (the "Project"), all as further described in the Housing Program developed pursuant to the Act with respect thereto, a copy of which is on file at City Hall. The Project is a 40-unit rental housing facility for the elderly to be located at the comer of Highway 14 SE and Towne Club Parkway in the City of Rochester, Minnesota. The Project will be owned and operated by the Borrower. The proceeds of the Bonds will be loaned by the Issuer to the Borrower to provide financing for the Project, and the Borrower will agree to repay the loan at times and in amounts sufficient to provide for payment in full of the Bonds when due.At said time and place the Common Council shall give all parties who appear an opportunity to express their views with respect to the Housing Program and the issuance of the Bonds. Written comments will be accepted at City Hall until the time of hearing. Dated: [Date of Publication] Isl Judy Scherr City Clerk I A-1 4831-7168-3345.3 EXHIBIT B HOUSING PROGRAM PURSUANT TO MINNESOTA STATUES, CHAPTER 462C ROCHESTER SENIOR HOUSING Pursuant to Minnesota Statutes,Chapter 462C(the"Act"),the City of Rochester,Minnesota(the"City")is authorized to develop and administer programs to finance the acquisition and construction of multifamily housing developments under the circumstances and within the limits set forth in the Act. Minnesota Statutes, Section 462C.07 provides that such programs for multifamily housing developments may be financed by revenue bonds or notes issued by the City. The City has determined that it is in the best interests of the residents of the City to create a program of financing to encourage and facilitate the development of multifamily rental housing developments for families in the City(the "Program").The City has received a proposal that it approve a program providing for the construction of a 40-unit rental housing facility for the.elderly to be located at the corner of Highway 14 SE and Towne Club Parkway in the City of Rochester,Minnesota(the "Project"),by Rochester Senior Housing, a Minnesota nonprofit corporation,or its affiliates or assigns(the"Owner").The acquisition and construction of the Project is to be funded in part through the issuance of up to$5,000,000 in revenue bonds in one or more series to be issued by the City(the "Bonds").The Owner will own and operate the Project as a residential rental project for seniors.Initial rents for the housing units are anticipated to be approximately $345 per month. Certain utility charges will be included. The Project will be acquired and constructed in accordance with the requirements of Subdivision 1 of Section 462C.05 of the Act. The City,in establishing this Program,has considered the following: (i)the availability and affordability of other government housing programs; (ii) the availability and affordability of private market financing for the construction of multifamily housing units; (iii) an analysis of population, unemployment trends and projections of future population trends and future employment needs;(iv)the recent housing trends and future housing needs of the City; and(v) an analysis of how the Program will meet the needs of persons and families residing and expected to reside in the City. The City,in adopting the Program,has further considered(i)the amount,timing and issuance of the Bonds to finance the estimated costs of the housing units,to fund the appropriate reserves and to pay the cost of issuance; (ii)the method of monitoring and implementation of the Program to insure compliance with the City's housing plan and its objectives; (iii) the method of administering, servicing and supervising the Program; (iv) the costs of the City, including future administrative expenses; (v)the restrictions on the multifamily development to be financed under the Program;and(vi)certain other limitations. The City,in adopting the Program, considered the potential financing impact of a bond issuance on affected public agencies. In addition, the City reviewed the method of marketing the Program. Such review examined the equal opportunity for participation by(i)minorities; (ii)households displaced by public or private actions; and(iii) accessibility to the handicapped. Section A. Definitions. The following terms used in this Program shall have the following meanings,respectively: i "Act" shall mean the Minnesota Statutes, Section 462C.01, et seq., as currently in effect and as the same may be from time to time amended. "Bonds"shall mean the revenue bond or bonds to be issued by the City to finance the Program. "City"shall mean the City of Rochester,Minnesota. "Code" shall mean the Internal Revenue Code of 1986,as amended. "Housing Unit" shall mean any one of the apartment units located in the Project, occupied by one or more persons or a family,and containing complete living facilities. A-2 4831-7168-3345.3 "Land"shall mean the real property upon which the Project is situated. "Owner"shall mean Rochester Senior Housing. "Program"shall mean this program for the financing of the Project pursuant to the Act. "Project" shall mean the residential rental housing development consisting of 40 total Housing Units,to be acquired and constructed by the Owner,together with functionally related facilities. Section B. Program for Financingthe e Project. It is proposed that the City establish this Program to provide financing for the acquisition and construction of the Project at such cost and upon such other terms and conditions as set forth herein and as may be agreed upon in writing between the City, the initial purchaser of the Bonds and the Owner. The City expects to issue the Bonds as soon as the terms of the Bonds have been agreed upon by the City, the Owner and the initial purchaser of the Bonds. The proceeds of the loan evidenced by the Bonds will be loaned by the City to the Owner to finance the acquisition and construction of the Project,to fund required reserves and to pay the costs of issuing the Bonds. It is anticipated that any Bonds issued under this Program will have a final maturity of approximately eighteen(18)months and will be priced to the market at the time of issuance. The City will hire no additional staff for the administration of the Program. Insofar as the City will be contracting with underwriters, legal counsel, bond counsel, the trustee, if any, and others, all of whom will be reimbursed from bond proceeds and revenues generated by the Program,no administrative costs will be paid from the City's budget with respect to this Program. The Bonds will not be general obligation bonds of the City,but are to be paid only from properties pledged to the payment thereof. Section C. Local Contributions to the Program. In addition to the revenue Bonds to be issued under the • Program,the Project is expected to be funded from additional sources including low income housing tax credits and various grants and loans. Section D. Standards and Requirements Relating to the Financing of the Project Pursuant to the Program. The following standards and requirements shall apply with respect to the operation of the Project by the Owner pursuant to this program: (1) Substantially all of the proceeds of the loan evidenced by the Bonds will be applied to the acquisition and construction of the Project and to the funding of appropriate reserves. The proceeds of the loan evidenced by the Bonds will be made available to the Owner pursuant to the terms of the Bond documents, which will include certain covenants to be made by the Owner to the City regarding the use of proceeds and the character and use of the Project. (2) The Owner, and any subsequent owner of the Project, will not arbitrarily reject an application from a proposed tenant because of race, color, creed, religion, national origin, sex, affectional preference,marital status,or status with regard to public assistance or disability. (3) The affordability standards and set-aside requirements of Section 462C.05, Subdivision 2 of the Act,and Section 142(d)of the Internal Revenue Code of 1986,as amended,will be met. Section E. Evidence of Compliance. The City may require from the Owner at or before the issuance of the Bonds, evidence satisfactory to the City of the ability and intention of the Owner to complete the Project, and evidence satisfactory to the City of compliance with the standards and requirements for the financing established by the City, as set forth herein; and in connection therewith, the City or its representative may inspect the relevant books and records of the Owner in order to confirm such ability,intention and compliance.In addition,the City may periodically require certification from either the Owner or such other person deemed necessary concerning compliance with various aspects of this Program. Section F. Issuance of Bonds. To finance the Project pursuant to this Program,the City may by resolution A-3 4831-7168-3345.3 authorize and issue its revenue bonds in one or more series in an aggregate principal amount of up to $5,000,000. The Bonds shall be issued pursuant to Section 462C.07, Subdivision 1 of the Act, and shall be payable primarily • from the revenues of the Project.The cost of the Project is presently expected not to exceed$8,500,000. The cost of the Project may change between the date of preparation of this Program and the date of issuance of Bonds.The Bonds are expected to be issued by November,2013. Section G. Severability. The provisions of this Program are severable and if any of its provisions, sentences, clauses or paragraphs shall be held unconstitutional, contrary to statute, exceeding the authority of the City or otherwise illegal or inoperative by any court of competent jurisdiction,the decision of such court shall not affect or impair any of the remaining provisions. Section H. Amendment. The City shall not amend this Program,while Bonds authorized hereby are outstanding,to the detriment of the holders of such Bonds. Section I. State Ceiling. Up to $5,000,000 of the state ceiling for private activity bonds, pursuant to Section 146 of the Internal Revenue Code of 1986, as amended, and Chapter 474A of Minnesota Statutes,will be used with respect to the Bonds. • II A-4 4831-7168-3345.3 Extract of Minutes of Meeting of the Common Council of the City of Rochester Olmsted County,Minnesota Pursuant to due call and notice thereof, a regular meeting of the Common Council of the City of Rochester, Minnesota, was duly held in the Council/Board Chambers in the Olmsted County Government Center on Monday,November 19,commencing at 7:00 P.M. The following members were present: Acting President Randy Staver, Councilmembers Mark Bilderback, Ed Hruska, Sandra Means, Bruce Snyder, Michael Wojcik and the following were absent: None Member Hruska introduced the following written resolution, the reading of which was dispensed with by unanimous consent,and moved its adoption: The motion for the adoption of the foregoing resolution was duly seconded by Member Bilderback ,and upon vote being taken thereon,the following voted in favor thereof: Acting President Staver, Councilmembers Bilderback, Hruska, Means, Snyder, Wojcik and the following voted against: None whereupon said resolution was declared duly passed and adopted. i 4831-7168-334-.-233453