Loading...
HomeMy WebLinkAboutResolution No. 514-06 • RESOLUTIONNO. RESOLUTION RELATING TO A PROJECT ON BEHALF OF ZUMBRO VALLEY MENTAL HEALTH CENTER,INC.; AUTHORIZING THE ISSUANCE OF A COMMERCIAL DEVELOPMENT REVENUE NOTE (ZUMBRO VALLEY MENTAL HEALTH CENTER PROJECT), SERIES 2006; AND APPROVING AND AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATING THERETO BE IT RESOLVED by the Common Council of the City of Rochester,Minnesota (the "City"), as follows: SECTION 1. RECITALS AND FINDINGS. 1.1 This Council has received a proposal that the City issue its revenue note (as hereinafter further described, the"Note") under Minnesota Statutes, Sections 469.152 to 469.165 (the "Act") for the purposes of financing a portion of the cost of a proposed project(the "Project") on behalf of Zumbro Valley Mental Health Center, Inc., a Minnesota nonprofit corporation (the "Corporation"), and paying certain costs of issuance of the Note. 1.2. The Project consists of the acquisition, construction and improvement of(i) an approximately 16,000 square foot residential mental health center; (ii) an approximately 16,000 • square foot office building and (iii) condominium buildings for the Corporation's treatment programs to be located at Wood Lake Park, south of US 52 and US 63 in the City. The Corporation anticipates that the Project, once completed,will enhance employment in the City as provided in the hereinafter-described Application and will enhance the Corporation's ability to provide mental health treatment services. 1.3 At a public hearing duly noticed and held on October 2, 2006, in accordance with the Act'and Section 147(f) of the Internal Revenue Code of 1986, as amended, on the proposal to undertake and finance the Project, all parties who appeared at the hearing were given an opportunity to express their views with respect to the proposal to undertake and finance the Project, and interested persons were given the opportunity to submit written comments to the City Clerk before the time of the hearing. 1.4 This Council hereby finds that the issuance and sale of the Note in up to $1,200,000 in aggregate principal amount, under the authority contained in the Act to finance the Project, would promote the purposes contemplated and described in Section 469.152 of the Act and further promote the public purposes and legislative objectives of the Act and is in the best interest of the City and the City hereby determines to issue and sell such Note. 1.5 The proceeds of the Note will be lent(the"Loan")by the City to Corporation, in order to finance a portion of the cost of the Project and to pay certain costs of issuance of the Note. • 3 • 1.6 Pursuant to a Loan Agreement(the"Loan Agreement"), to be entered into between the City and Corporation, a draft of which has been presented to the Council at this meeting and which has been reviewed to the extent deemed necessary, the Corporation will unconditionally agree to repay the Loan made by the City under the Loan Agreement in specified amounts and at specified times sufficient to make the necessary payments of principal of, premium, if any, and interest on the Note,when due. In addition, the Loan Agreement contains provisions relating to the payment by Corporation of the administrative fee of the City, indemnification, insurance and other agreements and covenants which are required by the Act or which are permitted by the Act and which the City and Corporation deem necessary or desirable for the sale of the Note. 1.7 The Note, attached as an exhibit to the Loan Agreement, sets the interest rates, maturity dates and redemption provisions for the Note, establishes the various funds and accounts for the deposit and transfer of money and contains other provisions which are required by the Act or which are permitted by the Act and which the City and Corporation deem necessary or desirable in connection with the sale of the Note. 1.8 Pursuant to a Pledge Agreement(the"Pledge Agreement") to be entered into between the City and Wells Fargo Brokerage Services, LLC (the "Purchaser"), a draft of which has been presented to the Council at this meeting and which has been reviewed to the.extent deemed necessary, the City assigns and pledges all of its right, title and interest in the Loan Agreement (other than the right of the City to indemnification and payment of administrative • expenses) to the Purchaser. 1.9 The Note will be a special limited obligation of the City payable solely from amounts payable by Corporation under the Loan Agreement, other than to the extent payable from the proceeds of the Note. The Note shall not be payable from or charged upon any funds other than the revenue pledged to the payment thereof, nor shall the City be subject to any liability thereon. No holder or holders of the Note shall ever have the right to compel any exercise of the taxing power of the City to pay the Note or the interest thereon, nor to enforce payment thereof against any property of the City other than the Loan Agreement. The Note shall not constitute a debt of the City within the meaning of any charter, constitutional or statutory limitation. 1.10 The Note will be purchased from the City by the Purchaser. SECTION 2. AUTHORIZATION OF THE NOTE; APPROVAL AND EXECUTION OF DOCUMENTS. 2.1 The undertaking of the Project would further the general purposes contemplated and described in Section 469.152 of the Act. 2.2 This Council has been advised by representatives of the Corporation that conventional, commercial financing to pay the cost of the Project is available only at such high costs of borrowing that the economic feasibility of operating the Project would be below that • resulting from municipal borrowing and its lower borrowing cost. 4 • 2.3 On the basis of the information given the City to date, it appears that it would be desirable for the City to issue its revenue note under the provisions of the Act to finance the Project in the maximum aggregate face amount of$1,200,000, the interest on which will be excludable from gross income under Section 103 of the Code. 2.4 The issuance of the Note to finance the Project shall be subject to approval of the Project by the Minnesota Department of Employment and Economic Development(the "Department"). The Application to the Department (the"Application"), with attachments, is hereby approved, and the Mayor and City Clerk or other authorized representatives of the City are authorized to execute said documents on behalf of the City. 2.5 In accordance with Section 469.1 54, Subdivision 3 of the Act, the Mayor and City Clerk or other authorized representatives of the City are hereby authorized and directed to cause the Application to be submitted to the Department for approval of the Project. The proper officers, employees and agents of the City are hereby authorized and directed to provide the Department with any preliminary information needed for this purpose and to assist in the preparation of such documents as may be appropriate to the Project, if approved by the Department. 2.6 The City hereby authorizes the issuance of the Note, as a revenue note under the Act, in the aggregate principal amount of up to $1,200,000. The Mayor and City Clerk are hereby authorized to approve the purchase price of the Note,provided that the purchase price • equals or exceeds 98% of the principal amount of the Note; the aggregate principal amount of the Note,provided that such principal amount is not in excess of$1,200,000; the debt service schedule of the Note,provided that the final maturity date is not more than 30 years from the date of issuance thereof; the provisions for prepayment and redemption of the Note prior to its stated maturity; and the interest rates for the Note,provided that the interest rate on the Note shall not exceed 5.00%per annum. The Note shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, except the revenues specifically pledged to the payment thereof, and the Note,when, as and if issued, shall recite in substance that the Note, including interest thereon, is payable solely from the revenues and property specifically pledged to the payment thereof, and shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. 2.7 The Note shall be executed on belialf of the City by the manual or facsimile signatures of the Mayor and City Clerk. The Note when executed and delivered shall contain a recital that it is issued pursuant to the Act. The City Finance Officer is hereby designated as authenticating agent pursuant to Minnesota Statutes, Section 475.55. If any of the officers who shall have signed or sealed the Note shall cease to be such officers of the City before the Note so signed and sealed shall have been delivered by the City, the Note nevertheless may be issued and delivered with the same force and effect as though the person or persons who signed or sealed the Note had not ceased to be such officer or officers of the City. 2.8 The Pledge Agreement and the Loan Agreement are hereby made a part of this Resolution as fully as though set forth in full herein and are hereby approved in the form submitted to this meeting, and the Mayor and City Clerk are hereby authorized and directed to execute, acknowledge and deliver the Pledge Agreement and the Loan Agreement on behalf of 5 the City with such changes, insertions and omissions therein as may be approved by the Mayor and City Clerk and subject to the review and comment by the City's special issuer's counsel, Briggs and Morgan, Professional Association, such approval to be evidenced conclusively by the execution by the Mayor and City Clerk of the Pledge Agreement and the Loan Agreement. 2.9 The Mayor, the City Clerk and all other officers of the City are each hereby authorized to execute and deliver all other documents which may be required under the terms of the Pledge Agreement or the Loan Agreement, and to take such other action as may be required or appropriate for the performance of the duties imposed thereby or to carry out the purposes thereof. 2.10 In the absence or disability of the Mayor, the City Clerk or any other officer of the City named in any instrument to be executed on behalf of the City in connection with the issuance of the Note, the acting Mayor, Assistant City Clerk or other officer may execute such instrument. The execution of any instrument by an officer of the City shall be conclusive evidence of its approval. 2.11 The City Clerk is hereby designated for all purposes of the Loan Agreement and the Pledge Agreement as the City official authorized to execute on behalf of the City certificates, requests or consents as provided in the Loan Agreement and the Pledge Agreement. 2.12 The Mayor, City Clerk and other officers of the City are authorized and directed to prepare and furnish to Dorsey&Whitney LLP,bond counsel, the Corporation, and the • Purchaser certified copies of all proceedings and records of the City relating to the Project and the Note, and such other affidavits and certificates as may be required to show the facts appearing from the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute representations of the City as to the truth of all statements contained therein. 2.13 The Mayor and City Clerk are directed, if the Note is issued and sold, thereafter to comply with the provisions of Section 469.154, Subdivisions 5 and 7 of the Act. This Resolution shall be effective immediately upon its adoption. Adopted by the Common Council of the City of Rochester, Minnesota, this 2nd day of October, 2006. President of the Common Council Atte Ci lerk Approved the JQ4 day of CmE-_ , 2006. Mayor 6 Revised August 2003 STATE OF MINNESOTA • MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT BUSINESS AND COMMUNITY DEVELOPMENT DIVISION APPLICATION FOR APPROVAL OF INDUSTRIAL DEVELOPMENT BOND PROJECT PURSUANT TO MINNESOTA STATUTES, SECTION 469.152 THROUGH 469.165 (Please submit this form in duplicate-all supporting data in single copy only) Date: October 2, 2006 The governing body of the City of Rochester,Minnesota,hereby applies to the Minnesota Department of Employment and Economic Development(Department)for approval of a proposed Industrial Development Bond issue as required by Minn. Stat. § 469.152 - 469.165. i Address of issuer: 201 Fourth Street SE,Rochester,MN 55902,Attn: Dale Martinson. Telephone: (507)285-8086 Fax: (507) 285-8256 We have entered into preliminary discussions with: Firm: Zumbro Valley Mental Health Center Attorney: Bill Ryan,Dunlap & Seegar,PA Address: 315 Elton Hills Drive NW Address: 206 Broadway Ave. S., Suite 505 City: Rochester State: MN Zip 55901 City: Rochester State: MN Zip 55906 • Name of Project: Commercial Development Revenue Note (Zumbro Valley Mental Health Center Project), Series 2006 This firm is engaged primarily in(nature of business): mental health and substance abuse treatment The proceeds from the sale of the Commercial Development Note will be used for,together with a similar Note expected to be issued by Olmsted County,Minnesota(describe the project): a portion of the costs of the acquisition,construction and improvement of(i)an approximately 16,000 square foot residential mental health center; (ii)an approximately 16,000 square foot office building; (iii) condominium buildings for the Corporation's treatment programs (collectively,the"Facilities") and(iv) the financing of certain costs of issuance of the Note. The Facilities will be owned and operated by the Firm and located at Wood Lake Park, south of US 52 and US 63. Address of Project: see above Acquisition of land: $255,000 New construction: 495,000 Demolition and site preparation: 450,000 Acquisition and Installation of Equipment: 0 Fees: Architectural,engineering,inspection, fiscal, legal, administration, or printing: Construction Interest: Initial Reserve: Contingencies: Other: Total: $1,200,000 It is presently estimated that construction will begin on or about October 16, 2006,and will be complete • on or about August 1, 2007. When completed,there will be approximately 27 new jobs created by the project. (If applicable)There are approximately 154 existing jobs provided by the Firm in Minnesota. (If applicable)There will be approximately 19 jobs created by construction of the project. Number of hours: 40/wk. Average wage level $27.50. *jobs information for the construction of the project is for a combination of this project and the $6 000,000 financed by Olmsted County. Repayment of the proposed issue will be amortized over a period of 4 years. The following exhibits are furnished with this application and are incorporated herein by reference: 1. An opinion of bond counsel that the proposal constitutes a project under Minn. Stat. §469.153, subd. 2. 2. A copy of the resolution by the governing body of the issuer giving preliminary approval for the issuance of its revenue bonds and stating that the project, except for a project under Minn. Stat. § 469.153, subd. 2(g) or 0)would not be undertaken but for the availability of Industrial Development Bond financing. 3. A comprehensive statement by the municipality indicating how the project satisfies the public or purpose and policies of Minn. Stat.§469.152-469.165. 4. A letter of intent to purchase the bond issue or a letter confirming the feasibility of the project from a • financial standpoint. 5. A statement signed by the principal representative of the issuing authority to the effect that upon entering into the revenue agreement, the information required by Minn. Stat. § 469.154, subd. 5 will be submitted to the Department(not applicable to projects under Minn. Stat. § 469.153, subd. 2(g)or 6. A statement signed by the principal representative of the issuing authority that the project does not include any property to be sold or affixed to or consumed in the production of property for sale,and does not include any housing facility to be rented or used as a permanent residence. 7. A statement signed by a representative of the issuing authority that a public hearing was conducted pursuant to Minn. Stat. §469.154, subd.4. The statement shall include the date, time and place of the meeting and certify that a draft copy of this application with all attachments was available for public inspection and that all interested parties were afforded an opportunity to express their views. 8. Copies of notice(s)as published which indicate the date(s) of publication and the newspaper(s)in which the notice(s)were published. 9. Provide a plan for compliance of employment preference of economically disadvantaged or unemployed individuals. (See Minn. Stat. §469.154, subd. 7.) . The Mayor stated that this was the time and place fixed for a public hearing to be held on the proposal that the City undertake and finance a project(the"Project"), on behalf of Zumbro Valley Mental Health Center, Inc., a Minnesota nonprofit corporation (the "Corporation"),pursuant to Minnesota Statutes, Sections 469.152 through 469.165, as amended. The City Clerk presented an affidavit showing publication of the notice of public hearing at least once not fewer than fourteen(14)nor more than thirty(30) days prior to the date fixed for the public hearing, in the Rochester Post-Bulletin,being the official newspaper of the City and a newspaper of general circulation in the City. The affidavit was examined, found to be satisfactory and ordered placed on file with the City Clerk. The Mayor then opened the meeting for the public hearing on the proposal to undertake and finance the Project on behalf of the Corporation. The purpose of the hearing was explained, the nature of the Project and of the proposed revenue bonds was discussed, the draft copy of the Application to the Minnesota Department of Employment and Economic Development (the"Application"), with draft copies of all attachments and exhibits, was available, and all persons present who desired to do so were afforded an opportunity to express their views with respect to the proposal to undertake and finance the Project, in response to which the following persons either appeared,were recognized and made statements, or filed written comments with the City Clerk before the date set for the hearing, summaries of which appear opposite their respective names: Name of Speaker Summary of Views • Dwight Heil and Teresa Walters, Explaining the project Zumbro Valley Mental Health Center Dale Martinson, Finance Director Explaining the project and City of Rochester City's 'involvement The City Clerk [reported that no written comments had been] [read a summary of the written comments]* filed in her office before the date of the hearing. After all persons who wished to do so had stated or filed their views on the proposal, the Mayor declared the public hearing to be closed. *Strike inappropriate language We,the undersigned, are duly elected representatives of the City of Rochester,Minnesota and solicit your approval of this project at your earliest convenience so that we may carry it to a final conclusion. Signed by: (Principal Officers or Representatives of Issuing Authority; type or print official's name on the line to the left of the signature line. Thank you.) Ardell Brede Mayor Signature Judy Kay Scherr City Clerk Signa re This approval shall not deemed to be an approval by the Department or the State of the feasibility of the project or the terms of the revenue agreement to be executed or the bonds to be issued therefor. Authorized Signature,Minnesota Department of Date of Approval Employment and Economic Development Please return to:Minnesota Department of Employment and Economic Development Paul A.Moe,Director Office of Business Finance 500 Metro Square Building 121 Seventh Place East St.Paul,Minnesota 55101-2146 Phone: 651-297-1391 Fax: 651-296-5287 B ondapplication080503.wp d COMPREHENSIVE STATEMENT The undersigned,being the duly qualified and acting City Clerk of Rochester, Minnesota(the"City"), certifies that the Common Council (the "Council") has been provided by representatives of Zumbro Valley Mental Health Center, Inc. a Minnesota nonprofit corporation (the"Corporation"), with certain information concerning a proposed project under Minnesota Statutes, Sections 469.152 through 469.165, as amended (the "Act"). On the basis of such information, the Council, by resolution adopted October 2,2006, has given preliminary approval to the proposed project and the financing thereof by the issuance of a revenue note of the City (the"Note"). The following are factors considered by the Board in determining to give preliminary approval to the proposed project: 1. The proposed project (the "Project") consists generally of the following: (a) an approximately 16,000 square foot residential mental health center; (b) an approximately 16,000 square foot office building; (c) condominium buildings for the Corporation's treatment programs ((a) through(c) collectively, the"Facilities") and (d) the financing of certain costs of issuance of the Note. 2. Bond Counsel is of the opinion that the Project constitutes a"project"within the meaning of Minnesota Statutes, Section 469.153, Subdivision 2(b). 3. Representatives of the Corporation believe that the undertaking of the Project will further promote the public purposes and legislative objectives of the Act by providing _ substantial inducement for the continued mental health and substance abuse treatment operations of the Corporation in the City and surrounding area. 4. The City will cause the Corporation to provide the Minnesota Department of Employment and Economic Development(the "Department")with the information required by Minnesota Statutes, Section 469.154, Subdivision 5, upon entering into a revenue agreement (as defined in the Act)with the Corporation, and the information required by Minnesota Statutes, Section 469.154, Subdivision 7, as required. 5. Based on the representations made by the Corporation, the Project does not include any property to be sold or affixed to or consumed in the production of property for sale, and does not include any housing facility to be rented or used as a permanent residence. 6. A public hearing on the proposal to undertake and finance the Project was conducted pursuant to Minnesota Statutes, Section 469.154, Subdivision 4, and Section 147(f) of the Internal Revenue Code of 1986, as amended, on October 2, 2006, at 7:00 p.m., at the City offices, at which public hearing all interested parties were afforded an opportunity to express their views. A draft copy of the application to the Department, with all attachments, was available for public inspection following publication of notice of the public hearing. Dated: October 2, 2006. CITY OF ROCHESTER, MINNESOTA By i Jerk • [Signature page to Comprehensive Statement] 2