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HomeMy WebLinkAboutResolution No. 116-24 - Resolution - Deemed Reissuance of Conduit Charter School (Rochester STEM) Lease Revenue Bonds, Series 2018A RESOLUTION Approving the Deemed Reissuance of Conduit Charter School Lease Revenue Bonds (Rochester Math & Science Academy Project), Series 2018A and Authorizing the Execution of Necessary Documents. WHEREAS, the City of Rochester, Minnesota (the “City”) is a home rule charter city and political subdivision duly organized and existing under its Charter and the Constitution and laws of the State of Minnesota; and WHEREAS, pursuant to Minnesota Municipal Industrial Development Act, Minnesota Statutes, Sections 469.152-469.1655, as amended (the “Act”), each City is authorized to issue revenue bonds to finance, in whole or in part, the costs of the acquisition, construction, improvement, or extension of revenue producing enterprises, whether or not operated for profit; and WHEREAS, the City issued its Charter School Leases Revenue Bonds (Rochester Math & Science Academy Project) Series 2018A in the original principal amount of $15,555,000 (the “Bonds”), pursuant to Resolution No. 208-18, adopted by the Common Council of the City of Rochester, Minnesota on June 4, 2018 and an Indenture of Trust, dated as of September 1, 2018 (the “Original Indenture”), between the City and UMB Bank, n.a., as trustee (the “Trustee”), and loaned the proceeds received from the sale of the Bonds to Rochester MSA Building Company, a Minnesota nonprofit corporation (the “Company”), pursuant to a Loan Agreement, dated as of September 1, 2018, between the City and the Company, to finance the acquisition, renovation, expansion and equipping of certain existing school facilities located at 415 16th Street Southwest in the City, including the acquisition, construction and equipping of an approximately 25,000 square foot addition thereto (the “Facilities”); and WHEREAS, the Facilities are owned by the Company and currently the kindergarten through grade 8 portion of the Facilities is leased to and operated by Rochester Math & Science Academy, a Minnesota nonprofit corporation and charter school (“RMSA”), while the grade 9 through grade 12 portion of the Facilities is leased to and operated by Rochester STEM Academy, Inc., a Minnesota nonprofit corporation and charter school (“RSTEM”);and WHEREAS, the Company and the Trustee, for and on behalf of the Registered Owners of all outstanding Bonds in conjunction with a court order, have negotiated a settlement pursuant to which RSTEM and RMSA will merge with RMSA becoming the successor by merger and the Company and RMSA will agree to certain modifications in the financial covenants set forth in the documents related to the Bonds; and WHEREAS, in connection therewith, proposed amendments to the documents related to the Bonds are set forth a certain First Amendment to Indenture of Trust between the City and the Trustee, and consented to by the Company (the “Indenture Amendment”), a First Amendment to Loan Agreement between the City and the Company, and consented to by the Trustee (the “Loan Agreement Amendment”), an Amended, Restated and Consolidated Lease Agreement, by and between the Company, as lessor, and RMSA, as lessee, with respect to the Facilities (the “Lease”), and Amended and Restated Pledge and Covenant Agreement, from RMSA for the benefit of the Trustee (the “Pledge Agreement” and, together with the Indenture Amendment, the Loan Agreement Amendment, and the Lease, the “Amendments”); and WHEREAS, the Amendments, if approved, would cause a reissuance of the Bonds (the “Reissuance”) for tax purposes pursuant to Section 1.1001-3 of the Treasury Regulations promulgated under the Internal Revenue Code of 1986 (the “Code”), as amended. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Rochester, Minnesota (the “Council”), as follows: 1. The City hereby authorizes the Reissuance and approves the Amendments together with any related documents necessary in connection therewith, including without limitation a tax certificate and an Information Return for Tax-Exempt Private Activity Bond Issues, Form 8038 (collectively, the “Amendment Documents”), and hereby authorizes and directs the Mayor and the Clerk of the City to execute the Amendment Documents to which the City is a party on behalf of the City, and to carry out, on behalf of the City, the City’s obligations thereunder. 2. All of the provisions of the Amendment Documents, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. 3. The approval hereby given to the Amendment Documents includes approval of 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 legal counsel to the City and by the officers authorized herein to execute said documents prior to their execution; and said officers are hereby authorized to approve said changes on behalf of the City. The execution of any instrument by the appropriate officers of the City herein authorized shall be conclusive evidence of the approval of such document in accordance with the terms hereof. In the event of absence or disability of the officers, any of the documents authorized by this Resolution to be executed may be executed without further act or authorization of the Council by any duly designated acting official, or by such other officer or officers of the City as, in the opinion of legal counsel to the City, may act in their behalf. 4. This resolution shall be in full force and effect from and after its passage. PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS __________ DAY OF _______________, 2024. ___________________________________ PRESIDENT OF SAID COMMON COUNCIL ATTEST: __________________________ CITY CLERK APPROVED THIS _____ DAY OF ______________________, 2024. ___________________________________ MAYOR OF SAID CITY (Seal of the City of Rochester, Minnesota)