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HomeMy WebLinkAboutResolution No. 504-15 VOA 2015 FINAL RESOLUTION - 468273v2 (003)CITY OF ROCHESTER COUNTY OF OLMSTED STATE OF MINNESOTA RESOLUTION NO. AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF HEALTH CARE AND HOUSING FACILITY REVENUE BONDS RELATING TO THE HOMESTEAD AT ROCHESTER, INC. PROJECT; ADOPTING A HOUSING PROGRAM PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C AND APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF CERTAIN DOCUMENTS RELATING TO THE HEALTH CARE AND HOUSING FACILITY REVENUE BONDS WHEREAS, the City of Rochester, Minnesota (the "City") is a home rule charter city and political subdivision duly organized and existing under the Constitution and laws of the State of Minnesota; and WHEREAS, Minnesota Statutes, Chapter 462C, as amended (the "Act"), confers upon cities, the power to issue revenue bonds to finance a program for the purposes of planning, administering, making or purchasing loans with respect to one or more combination multifamily housing and health care developments within the boundaries of the city; and WHEREAS, in the issuance of the City's revenue bonds and in the making of a loan to finance a multifamily housing development the City may exercise, within its corporate limits, any of the powers that the Minnesota Housing Finance Agency may exercise under Minnesota Statutes, Chapter 462A, as amended, without limitation under the provisions of Minnesota Statutes, Chapter 475, as amended; and WHEREAS, The Homestead at Rochester, Inc., a Minnesota nonprofit corporation (the "Borrower"), has requested that the City issue its revenue bonds, notes, or obligations under the Act, in one or more series, in an original aggregate principal amount not to exceed $36,000,000 to (i) finance a new facility that consists of 48 independent/congregate living units, 30 assisted living units and 32 memory care units, to be located on the Borrower's existing senior housing and health care campus located at 1900 Ballington Boulevard NW in the City that currently consists of 128 independent/congregate living units, 44 assisted living units, 16 memory care units and 56 skilled nursing beds and related amenities; (ii) refinance existing debt of the Borrower; (iii) fund an additional deposit to an existing debt service reserve fund; (iv) fund a portion of the interest on the Series 2015 Bonds; and (v) pay certain costs of issuance of the Series 2015 Bonds (collectively, the "Project"); and WHEREAS, as a condition to the issuance of such revenue bonds, notes, or obligations under the Act, the City must adopt a housing program providing the information required by Section 462C.03, subdivision I a, of the Act and the City has prepared such program (the "Housing Program"); and WHEREAS, under Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), prior to the issuance of such revenue bonds or obligations, a public hearing duly noticed must be held by the City and under Section 462C.04, subdivision 2, of the Act, a public hearing must be held on each housing program after one publication of notice in a newspaper circulating generally in the City, at least 15 days before the hearing; and WHEREAS, at the request of the Borrower, on this same date, the Common Council of the City held a public hearing regarding the Housing Program and with respect to the issuance of revenue bonds to 468273v2 JSB RC110-57 finance the Housing Program and the Project, pursuant to and in conformance with the Act and Section 147(f) of the Code, for which notice was duly published as required by the Act; and WHEREAS, the revenue bonds will be issued in one or more series in an aggregate principal amount not to exceed $36,000,000, and will include a pledge of, among other things, revenues of the Project (the "Bonds"). In addition, the Borrower proposes to use up to $1,250,000 of the remaining proceeds of the City's Health Care and Housing Facility Revenue Bonds (The Homestead at Rochester, Inc. Project), Series 2013A (the "Series 2013A Bonds") to finance a portion of the costs of the Project; and WHEREAS, the Borrower has requested that the City issue the Bonds pursuant to a Trust Indenture, dated as of November 1, 2013 (the "Original Indenture") as amended by a First Supplemental Trust Indenture dated on or after October 1, 2015 (the "First Supplemental Indenture") between the City and U.S. Bank National Association (the "Trustee") (collectively, the "Indenture"); and WHEREAS, the City, the Borrower, and Herbert J. Sims & Co. (the "Underwriter") have agreed upon sufficient details of the Bonds and to enable the City to adopt this final bond resolution (the "Resolution") on this date. NOW THEREFORE BE IT RESOLVED by the Common Council of the City of Rochester, Minnesota, as follows: I. Proposal for Issuance of Bonds. For the purpose of providing funds to finance the Project, together with funds available to or provided by the Borrower, there is hereby authorized the issuance, sale and delivery of the Bonds in an aggregate principal amount not to exceed $36,000,000. The Bonds shall be special, limited obligations of the City payable solely from the funds pledged therein. The Bonds are not to be payable from nor charged upon any funds of the City other than the revenues pledged to their payment, nor is the City subject to any liability thereon; no holders of the Bonds shall ever have the right to compel any exercise of the taxing power of the City to pay any of the principal of, premium, if any, or interest on the Bonds; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, and each Bond shall recite that the Bonds, including interest thereon, are payable solely from the revenues pledged to the payment thereof and that no Bond shall constitute a debt of the City within the meaning of any constitutional, statutory or charter limitation. The Bonds shall contain a recital that they are issued pursuant to the Act and such recital shall be conclusive evidence of the validity and regularity of the issuance thereof. 2. Housing Program. The Housing Program and the preparation thereof is hereby adopted, ratified, and approved in all respects without amendment. The City Clerk is hereby authorized to do all other things and take all other actions as may be necessary or appropriate to carry out the Housing Program in accordance with the Act and any other applicable laws and regulations. 3. Bond Structure. Pursuant to a Loan Agreement, dated as of November 1, 2013 (the "Original Loan Agreement"), as amended by a First Supplemental Loan Agreement, to be dated on or after October 1, 2015 (the "First Supplemental Loan Agreement" and, together with the Original Loan Agreement, the "Loan Agreement"), the City will loan the proceeds of Bonds to the Borrower to finance the Project. The payments to be made by the Borrower under the First Supplemental Loan Agreement are fixed so as to produce revenue sufficient to pay the principal of, premium, if any, and interest on the Bonds when due. When executed, the right, title and interest of the City in, to and under, among other things, the First Supplemental Loan Agreement (except as therein provided) will be assigned to the Trustee pursuant to the First Supplemental Indenture between the City and the Trustee. It is further proposed that the Borrower will execute a First Supplemental Combination Mortgage, Security Agreement and Fixture Financing Statement and Assignment of Leases and Rents in favor of the Trustee as security for payment of the Bonds (the "First Supplemental Mortgage"). The Bonds will be purchased 468273v2 JSB RC110-57 by the Underwriter pursuant to a Bond Purchase Agreement among the City, the Underwriter and the Borrower (the "Bond Purchase Agreement"). The Bonds shall be in denominations of $25,000 and multiples of $5,000 in excess thereof, in such principal amounts, shall bear interest at the rates, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, and shall be in such form and have such other details and provisions as may be prescribed in the First Supplemental Indenture as executed in accordance with Sections 8 and 10 hereof. 4. Forms of Documents Submitted. The following documents have been submitted to the Common Council for approval: (a) the Bond Purchase Agreement; (b) the First Supplemental Loan Agreement; (c) the First Supplemental Mortgage; and (d) the First Supplemental Indenture. Findings. It is hereby found, determined and declared that: (a) the Project furthers the policies of the Act; (b) the Project promotes the public welfare by providing necessary multifamily rental housing and health care facilities, so that adequate multifamily rental housing and health care facilities are available to residents of the City at a reasonable cost; (c) the Act authorizes the acquisition, construction and installation of the facilities and equipment to be financed by the Bonds, the issuance and sale of the Bonds, the execution and delivery by the City of the First Supplemental Indenture, the Bond Purchase Agreement, and the First Supplemental Loan Agreement (collectively, the "Financing Documents"), the performance of all covenants and agreements of the City contained in the Financing Documents, and the performance of all other acts and things required under the constitution and laws of the State of Minnesota to make the Financing Documents and Bonds valid and binding obligations of the City in accordance with their terms; (d) it is desirable that the Bonds be issued by the City upon the terms set forth in the First Supplemental Indenture; (e) the payments under the First Supplemental Loan Agreement are fixed to produce revenue sufficient to provide for the prompt payment of principal of, premium, if any, and interest on the Bonds issued under the First Supplemental Indenture when due, and the Loan Agreement and Indenture also provide that the Borrower is required to pay all expenses of the operation and maintenance of the facilities to be financed by the Bonds, including, but without limitation, adequate insurance thereon and insurance against all liability for injury to persons or property arising from the operation thereof, and any taxes and special assessments levied upon or with respect to the premises of said facilities and payable during the term of the Loan Agreement and Indenture; (f) as provided therein and in the Loan Agreement and Indenture, the Bonds are not to be payable from or charged upon any funds other than the revenue pledged to the payment thereof, the City is not subject to any liability thereon; no holder of any Bond shall ever have the right to compel any exercise by the City of any taxing powers to pay any of the Bonds or the interest or premium thereon, or to enforce payment thereof against any property of the City, 468273v2 JSB RC110-57 except the interests of the City in the Loan Agreement which has been assigned to the Trustee under the Indenture; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City except the interests of the City in the Loan Agreement which has been assigned to the Trustee under the Indenture; the Bonds shall recite that the Bonds do not constitute or give rise to a pecuniary liability or moral obligation of the City, the State of Minnesota or any political subdivision, and that the Bonds, including interest thereon, are payable solely from the revenues pledged to the payment thereof, and the Bonds shall not constitute a debt of the City or the City within the meaning of any constitutional or statutory limitation. 6. Approval of Forms, Execution. The forms of the Financing Documents and exhibits thereto and all other documents listed in Section 4 hereof are approved substantially in the form submitted. Subject to the provisions of Sections 10 and 11 hereof, the Financing Documents, in substantially the forms submitted, are directed to be executed in the name and on behalf of the City by the Mayor and the City Clerk. Subject to the provisions of Sections 10 and 11 hereof, the Bonds are to be in executed the name of and on behalf of the City by the Mayor and the City Clerk, and are to be delivered to the Trustee for authentication and delivery to the Underwriter. Any other City documents and certificates necessary to the transaction described above may be executed by one or more appropriate officers of the City. Copies of all of the documents necessary to the transaction herein described shall be delivered, filed and recorded as provided herein and in the First Supplemental Loan Agreement and First Supplemental Indenture. 7. Official Statement. The City hereby consents to the preparation and distribution of the Official Statement for the Bonds; provided that it is understood that the City has relied upon the Borrower and the Underwriter and legal counsel retained by them to assure the accuracy and completeness of the information set forth in the Official Statement and that therefore the City has not made, and will not make, any representations or warranties with respect to the information contained therein, except under the headings "The Issuer" and "Litigation" but only with respect to the City. The drafts of the Official Statement on file with the City are hereby designated as "near final" offering memoranda for purposes of Rule 15c2-12 of the Securities Exchange Commission. 8. Issuance. The City shall proceed forthwith to issue the Bonds, in the forms and upon the terms set forth in the First Supplemental Indenture and this Resolution, if and to the extent the City officers determine to proceed with the Project which determination shall be deemed made upon execution of the Financing Documents by the City officers. The Bonds shall be payable or prepayable at such time or times, shall bear interest at such rates and shall be subject to such other terms and conditions as set forth therein which the Underwriter, the Borrower and the City shall agree to, which agreement shall be deemed to have been made upon execution and delivery of the Bonds by the City officers. The City officers are authorized and directed to execute and deliver the Bonds as prescribed in the First Supplemental Indenture and this Resolution. 9. Records and Certificates. The Mayor, City Clerk and other officers of the City are authorized and directed to prepare and furnish to the Underwriter certified copies of all proceedings and records of the City relating to the Bonds, and such other affidavits and certificates as may be required to show the facts relating to the legality of the Bonds as such facts appear 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. 10. Changes in Forms Approved, Absent and Disabled Officers. The approval hereby given to the various documents referred to above 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 the City Attorney, the appropriate City staff person or by the officers authorized herein to execute or accept, as the case may be, said documents prior to their 468273v2 JSB RC110-57 execution; and said officers or staff members are hereby authorized to approve said changes on behalf of the City. 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 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 Common Council by any member of the Common Council or any duly designated acting official, or by such other officer or officers of the Common Council as, in the opinion of the City Attorney, may act in their behalf. 11. Future Amendments. The authority to approve, execute and deliver future amendments to Financing Documents entered into by the City in connection with the issuance of the Bonds and consents required under the financing documents is hereby delegated to the Mayor and the City Clerk, subject to the following conditions: (a) such amendments or consents do not require the consent of the respective holders of the Bonds or such consent has been obtained; (b) such amendments or consents to not materially adversely affect the interests of the City; (c) such amendments or consents do not contravene or violate any policy of the City, and (d) such amendments or consents are acceptable in form and substance to the counsel retained by the City to review such amendments. The authorization hereby given shall be further construed as authorization for the execution and delivery of such certificates and related items as may be required to demonstrate compliance with the agreements being amended and the terms of this Resolution. The execution of any instrument by the Mayor and the City Clerk shall be conclusive evidence of the approval of such instruments in accordance with the terms hereof. In the absence of the Mayor or the City Clerk, any instrument authorized by this paragraph to be executed and delivered may be executed by the officer of the City is authorized to act in their place and stead. 12. Indemnification by Borrower. It is understood and agreed that the Borrower shall indemnify the City against all liabilities, losses, damages, costs and expenses (including attorney's fees and expenses incurred by the City) arising with respect to the Project or the Bonds, as provided for and agreed to by and between the Borrower and the City in the First Supplemental Indenture or the First Supplemental Loan Agreement. 13. Headings, Terms. Paragraph headings in this Resolution are for convenience of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. Capitalized terms used but not defined herein shall have the meanings given them in the First Supplemental Indenture and First Supplemental Loan Agreement. 14. Bond Counsel Opinion. The City hereby authorizes Kennedy & Graven, Chartered, as bond counsel for the City, to prepare, execute, and deliver its approving legal opinions with respect to the Bonds. 15. Waiver of Policy Regarding Unrated Debt. The City hereby authorizes the issuance of the Bonds as unrated debt in minimum denominations of $25,000 to be sold to the public. 16. Effective Date. This resolution shall be in full force and effect from and after its passage. 468273v2 JSB RC110-57 PASSED AND ADOPTED BY THE COMMON COUNCIL OF THE CITY OF ROCHESTER, MINNESOTA, THIS 5TH DAY OF OCTOBER, 2015. ATTEST: CITY CLERK Approved this 5th day of October, 2015. (Seal of the City of Rochester, Minnesota) PRESIDENT OF SAID COMMON COUNCIL MAYOR OF SAID CITY 468273v2 JSB RC110-57 CERTIFICATION I, the undersigned City Clerk of the City of Rochester, Minnesota, do hereby certify the following: The foregoing is true and correct and a copy of the Resolution is on file and of record in the offices of the City, which Resolution relates to authorizing the issuance, sale, and delivery of revenue bonds and subordinate notes relating to The Homestead at Rochester Project; and approving the form of and authorizing the execution and delivery of certain documents relating to the revenue bonds and subordinate notes and said Resolution was duly adopted by the Rochester Common Council at a regular or special meeting of the Council held on the date therein indicated. Said meeting was duly called and regularly held and was open to the public and was held at the place at which meetings of the Council are regularly held, a quorum of the Council being present and acting throughout. Councilmember moved the adoption of the Resolution, which motion was seconded by Councilmember A vote being taken on the motion, the following members of the Council voted in favor of the Resolution: and the following voted against the same: Whereupon said Resolution was declared duly passed and adopted. The Resolution is in full force and effect and no action has been taken by the Council which would in any way alter or amend the Resolution. WITNESS MY HAND officially as the City Clerk of the City of Rochester, Minnesota, this day of October, 2015. City Clerk City of Rochester, Minnesota 468273v2 JSB RC110-57 7