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HomeMy WebLinkAboutResolution No. 104-08 RESOLUTION NO._Z.04-08 • RESOLUTION APPROVING A PROJECT ON BEHALF OF MAYO CLINIC; AUTHORIZING THE ISSUANCE OF HEALTH CARE FACILITIES REVENUE BONDS (MAYO CLINIC), SERIES 2008; 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 Pursuant to Minnesota Statutes, Sections 469.152 through 469.165 (the "Act") and a Trust Indenture dated as of December 1, 1987, as amended (as amended through the date hereof, the "Original Indenture"), between the City and Wells Fargo Bank,National Association (successor to Norwest Bank Minnesota,National Association), as Trustee (the "Trustee"), the City provided for the issuance from time to time of revenue bonds of the City(as defined in the Original Indenture,the "Bonds") on behalf of Mayo Clinic, a Minnesota nonprofit corporation (the "Corporation"). 1.2 By an Amended and Restated Loan Agreement, dated as of May 2, 1998, as further amended (as amended to the date hereof,the "Original Loan Agreement"), between the • City and the Corporation and its affiliates, the City agreed to lend the proceeds of each series of the Bonds, when and if issued,to the Corporation. 1.3 The Corporation has advised this Council of its desire to undertake a project(the "Project"), comprising the following: (a) the improvement of and acquisition of equipment to be located at Corporation facilities in the City, including Mayo Clinic buildings at or near 200 First Street'SW, Rochester Methodist Hospital at 201 West Center Street and St. Mary's Hospital located at the 1200 to 1400 block of 2°a Street SW in the City; and (b) the refinancing of the City's Health Care Facilities Revenue Bonds (Mayo Foundation), Series 1998A and Series 1998B, issued on behalf of the Corporation to finance projects within the City. 1.4 The Corporation has requested that the City issue its Bonds, in one or more series, in the approximate aggregate principal amount of$330,000,000 (the "Series 2008 Bonds") pursuant to the Act to finance all or a portion of the cost of the Project. 1.5 The Corporation anticipates that the Project, once completed, will enhance employment in the City and the State as provided in the Application, and will enhance the Corporation's ability to provide quality health care services at reasonable cost. The Corporation has represented to the City that the issuance.of the Series 2008 Bonds is essential to the • successful completion of the Project. 1.6 At a public hearing, duly noticed and held on February 20, 2008, in accordance • with the Act and Section 147(f) of the Internal Revenue Code of 1986, as amended (the"Code"), 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 such proposal and interested persons were given the opportunity to submit written comments to the City Clerk before the date of the hearing. 1.7 Drafts of the following documents relating to the Series 2008 Bonds have now been presented to the Common Council and shall be filed in the office of the City Clerk: (a) a Fourteenth Supplemental Indenture (the"Fourteenth Supplemental Indenture"), to be entered into between the City and the Trustee, whereby the Series 2008 Bonds, denominated"Health Care Facilities Revenue Bonds (Mayo Clinic), Series 2008," are created and their terms, conditions and forms established; (b) an Amendment No. 14 ("Amendment No. 14"), to be entered into between the City and the Corporation, to the Original Loan Agreement whereby the City agrees to lend the proceeds of the Series 2008 Bonds to the Corporation and the Corporation agrees to undertake the Project and pay all costs thereof and to repay the loan from the City and all costs and expenses of the City in connection with the Project and issuance and sale of the Series 2008 Bonds; (c) a Bond Purchase Agreement(the "Bond Purchase Agreement"), to be • entered into between the City and the Underwriters named therein(the "Underwriters"), which provides for the sale by the City and the purchase by the Underwriters of the Series 2008 Bonds; and (d) an Official Statement relating to the Series 2008 Bonds (the "Official Statement"). The Fourteenth Supplemental Indenture, Amendment No. 14 and the Bond Purchase Agreement are collectively called the "Bond Documents." The Bond Documents are hereby made a part of this Resolution as fully as though set forth in full herein. 1.8 The Series 2008 Bonds shall not constitute an indebtedness, a pecuniary liability, a moral or general obligation, a loan of the credit of the City or a charge, lien or encumbrance, legal or equitable,upon any property of the City, except the revenues specifically pledged to the payment thereof, and each Series 2008 Bond, when, as and if issued, shall recite in substance that the Series 2008 Bond, including interest thereon, is payable solely from the revenues and property specifically pledged to the payment thereof, and shall not constitute a debt or pecuniary liability of the City. Section 2. Determination to Proceed with the Proiect and Its Financing 2.1 On the basis of the information given to the City to date, it appears that it would be desirable for the City to issue the Series 2008 Bonds under the provisions of the Act to • finance the project in the approximate aggregate principal amount of$330,000,000. The 2 f! Y Corporation has represented that the Project would not be undertaken but for the availability of • Industrial Development bond financing under the Act. 2.2 This Council hereby declares its present intent to proceed with the Project and its financing and to have the City issue its revenue bonds under the Act for these purposes. Notwithstanding the foregoing, however, the adoption of this resolution shall not be deemed to establish a legal obligation on the part of the City or its Common Council to issue or cause the issuance of such revenue bonds. All details of the Series 2008 Bonds and the provisions for payment thereof shall be subject to final approval of the Project by the Minnesota Department of Employment and Economic Development and may be subject to such further conditions as the City may specify. The Series 2008 Bonds, if issued, shall not constitute an indebtedness, a pecuniary liability, a moral or a general obligation or a loan of the credit of the City or a charge, lien or encumbrance, legal or equitable, upon any property of the City, except the revenues specifically pledged to the payment thereof, and each Series 2008 Bond, when, as and if issued, shall recite in substance that the Series 2008 Bond, 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, statutory or charter limitation. 2.3 The Corporation has represented to the City that it intends to reimburse costs with respect to the Project from the proceeds of the Series 2008 Bonds when issued. The City reasonably expects to reimburse costs of the Project with proceeds of the Series 2008 Bonds, when issued, based upon the representations of the Corporation on which the City believes it is • reasonable to rely. 2.4 The Mayor and the City Clerk are authorized to cooperate with the Corporation in obtaining the approval of the Commissioner of the Department of Employment and Economic Development for the issuance of the Series 2008 Bonds, as required by the Act. The Application, with attachments, in substantially the form heretofore submitted to the Council is, hereby approved, and the Mayor and the City Clerk are authorized to execute said documents on behalf of the City. Section 3. Authorization of the Bonds; Approval and Execution of Documents. 3.1 The City hereby approves the issuance of the Series 2008 Bonds under the Act and the Indenture, the sale thereof to the Underwriters in accordance with the Bond Purchase Agreement, and the loan of the proceeds of the Series 2008 Bonds to the Corporation in accordance with the Amendment No. 14. 3.2 The forms and the execution and the delivery of the Bond Documents (except for the Official Statement) submitted to this Council are hereby approved, with such additions or modifications thereto and deletions therefrom as may be approved by the Mayor and the City Clerk prior to the execution and delivery thereof and subject to the review and comment of the City's special issuer's counsel for the Series 2008 Bonds, Briggs and Morgan, Professional Association,the approval thereof to be conclusively evidenced by the execution and delivery of the Bond Documents by the appropriate officers of the City. The City recognizes that as of the • date of adoption of this Resolution the detailed terms of the Series 2008 Bonds are not finally 3 f ' f resolved, and consequently when issued the Series 2008 Bonds may be in fewer or more'series • than the forms of Bond Documents currently provide, and will bear interest at rates not yet determined, but the aggregate principal amount of Series 2008 Bonds to be issued shall not exceed$330,000,000,the price at which the Series 2008 Bonds are sold to the Underwriters shall not be less than 98% of their principal amount(exclusive of any"original issue discount"), and the initial interest rate on the Series 2008 Bonds shall not exceed 8.00%per annum, and shall be set forth be in the Fourteenth Supplemental Indenture, as finally executed. The Bonds are expected to mature no later than 40 years from the date of issuance thereof. 3.3 The Mayor and the City Clerk are hereby authorized in their discretion at such time, if any, as they may deem appropriate, to execute and deliver the Bond Documents in the name and on behalf of the City, following the review and comment of the City's special issuer's counsel for the Series 2008 Bonds. 3.4 The City hereby consents to the preparation and distribution by the Corporation and the Underwriters of the Official Statement and any Preliminary Official Statement deemed desirable by the Underwriter in connection with the offering of the Bonds. The City has not made and will not make any independent investigation of the facts and statements provided in the Official Statement or the Preliminary Official Statement and makes no representations or warranties with respect to the information set forth therein; accordingly,the City assumes no responsibility with respect thereto, including without limitation as to matters relating to the accuracy, completeness or sufficiency of the Official Statement or the Preliminary Official Statement. . 3.5 The Mayor, the City Clerk and the other officers of the City are hereby authorized to prepare and furnish to the Underwriters and to Bond Counsel certified copies of all proceedings and records of the City relating to the Series 2008 Bonds and such other affidavits and certificates as may be required to show the facts relating to the Series 2008 Bonds as such facts appear in the books and records in the officers' custody and control or as otherwise known to them. All such certified copies, affidavits and certificates, including any heretofore furnished, shall constitute representations of the City as to the truth of all statements contained therein. 3.6 In the absence of the Mayor or the City Clerk, any of the documents authorized by this Resolution to be executed and delivered may be executed and delivered by the acting or deputy Mayor or City Clerk, respectively. 3.7 The issuance by the City of the Series 2008 Bonds in an aggregate principal amount up to $330,000,000 in the form and upon the terms set forth in the Fourteenth Supplemental Indenture is hereby authorized. The Mayor and the City Clerk are hereby authorized in their discretion at such time, if any, as they may deem appropriate, to execute the Series 2008 Bonds by manual or facsimile signatures as prescribed in the Indenture, to deliver the Series 2008 Bonds to the Trustee or an authenticating agent for authentication and delivery thereof to the Underwriters, and to deliver to the Trustee a certified copy of this Resolution and all other documents required by the Fourteenth Supplemental Indenture or the Bond Purchase Agreement. • Section 4. Changes Relating to Series 2002 Bonds. 4 fJ. f � f 4.1 The Corporation has also advised the City of its intention to change the interest • rate mode on the City's Health Care Facilities Revenue Bonds (Mayo Foundation), Series 2002A, 2002B and 2002C, currently outstanding in the aggregate principal amount of $200,000,000 (the "Series 2002 Bonds"), from an Auction Rate to a Variable Rate (as such terms are defined in the Original Indenture). Such change in interest rate mode is hereinafter referred to as the"Conversion." 4.2 The Corporation has advised the City that, in connection with the Conversion, it may be necessary to implement technical amendments to the Original Indenture recommended by the rating agencies or in order to conform the Auction Procedures and related provisions set forth in the Original Indenture to conform to the terms, conditions and procedures set forth in the Fourteenth Supplemental Indenture, which are more consistent with current market terms, conditions and procedures for auction rate securities, in the event that the Corporation should later determine to convert the Series 2002 Bonds back to an Auction Rate. The City hereby consents to and authorizes, and the Mayor and City Clerk are authorized to execute and deliver, such supplements to the Original Indenture for these purposes as may be required,provided that all necessary consents thereto by other parties have been obtained. 4.3 The City has been advised that the Conversion will constitute a reissuance of the Series 2002 Bonds for federal tax purposes, and the Mayor, City Clerk or other appropriate City officials are authorized and directed to file a new Internal Revenue Service Form 8038 and such other certificates or documents necessary in the opinion of Bond Counsel to preserve the exemption of interest to be paid on the Series 2002 Bonds from federal income taxation. • 4.4 The City hereby consents to the preparation and distribution by the Corporation and the Underwriters of such offering documents as are necessary in connection with the reissuance and Conversion of the Series 2002 Bonds. Section 5. Effective Date. 5.1 This Resolution shall be effective immediately upon its adoption. Adopted by the Common Council of the City of Rochester, Minnesota, this 20th day of February, 2008. /" President of the Common Council Attes6,14 Cit Clerk Approved the 15r day of F,53E A/ly( , 2008. Mayor • 5 The Mayor stated that this was the time and place fixed by a resolution of this Council, adopted on January 23, 2008, for a public hearing to be held on the proposal that the City undertake and finance a project (the "Project"), on behalf of Mayo Clinic, 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 less 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 Rick Haeflinger Thanked the City Council and • Investment Officer for City Staff for their assistance Mayo Clinic The City Clerk [reported that no written comments had been] [read a suHi 4 afy of the"fige" , ..ffwAefitq* 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. i *Strike inappropriate language • / i