1999-013
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CITY OF HOPKINS
Hennepin County, Minnesota
RESOLUTION NO. 99-013
RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF A
HEALTH CARE FACILITY REVENUE NOTE,
TO PROVIDE FUNDS FOR A PROJECT ON BEHALF OF
AUGUSTANA CHAPEL VIEW HOMES, INC.
BE IT RESOLVED by the City Council of the City of Hopkins, Minnesota (the "City"), as
follows:
1. Authority. The City is, by the Constitution and laws of the State of Minnesota,
including Minnesota Statutes, Sections 469.152 to 469.165, as amended (the
"Act"), authorized to issue and sell its revenue bonds for the purpose of
financing costs of authorized projects and to enter into agreements necessary
or convenient in the exercise of the powers granted by the Act.
2. Authorization of Pro,~ect: Documents Presented. Augustana Chapel View
Homes, Inc., a Minnesota nonprofit corporation (the "Corporation"), has
proposed to this Council that the City issue and sell its City of Hopkins Health
Care Facility Revenue Note (Augustana Chapel View Homes, Inc. Project),
Series 1999 (the "Note"), in an aggregate principal amount not to exceed
$700,000 pursuant to the Act and loan the proceeds thereof to the Corporation~~~
in order to finance costs incurred in the construction of an expansion to the
Corporation's nursing facility located at 615 Minnetonka Mills Road in the
City (referred to generally herein, together with any related site improvements,
as the "Project"). Forms of the following documents have been submitted to
the City and are now on file in the office of the City Clerk:
(a) Loan and Purchase Agreement (the "Loan Agreement") between the
City, the Corporation and the lender named therein (the "Lender"),
whereby the Lender agrees to pwchase the Note, the City agrees to
make a loan to the Corporation of the gross proceeds of sale of the Note
and the Corporation agrees to pay amounts in repayment of the loan
sufficient to provide for the full and prompt payment of the principal
of, premium, if any, and interest on the Note when due; and
(b) Combination Mortgage, Security Agreement and Fixture Financing
Statement and Assignment of Leases and Rents (together, the
"Mortgage"), each from the Corporation to the City, and to be assigned
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by the City to the Lender pursuant to an Assignment of Mortgage, by
which the Corporation grants, as security for the payment of the Note, a
mortgage lien on and security interest in the Project, as mortgaged
thereunder, and as more fully described therein;
(c) Loan Agreement Assignment (the "Loan Agreement Assignment" from
the City to the Lender, by which the City assigns to the Lender its
interest in the Loan Agreement; and
(d) the Note.
3. Findin s. It is hereby found, determined and declared that:
(a) There is no litigation pending or, to the best of its knowledge,
threatened against the City relating to the Note, the Loan Agreement,
the Mortgage, the Assignment of Mortgage or the Loan Agreement
Assignment or questioning the due organization of the City, or the
powers or authority of the City to issue the Note and undertake the
transactions contemplated hereby.
(b) The execution, delivery and performance of the City's obligations under
the Note, the Mortgage, the Assignment of Mortgage, the Loan
Agreement and the Loan Agreement Assignment do not and will not
violate any order of any court or other agency of government of which
the City is aware or in which the City is a party, or any indenture,
agreement or other instrument to which the City is a party or by which
it or any of its property is bound, or be in conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a
default under any such indenture, agreement or other instrument.
(c) The Note will be issued by the City upon the terms to be agreed upon
by the Lender and the Corporation provided that the interest rate shall
not exceed 7% per annum, and the City's interests in the Loan
Agreement (except for its rights to indemnity and payment of expenses
and repayment of advances) will be pledged to the Lender as security
for the payment of principal of, premium, if any, and interest on the
Note.
(d) The Loan Agreement provides for payments by the Corporation to the
Lender for the account of the City of such amounts as will be sufficient
to pay the principal of, premium, if any, and interest on the Note when
due.
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(e) Under the provisions of the Act, and as provided in the Loan
Agreement, the Note is not to be payable from nor charged upon any
funds other than amounts payable pursuant to the Loan Agreement
which are pledged to the payment thereof, the City is not subject to any
liability thereon; no owners of the Note shall ever have the right to
compel the exercise of the taxing power of the City to pay any of the
Note or the interest thereon, nor to enforce payment thereof against any
property of the City (other than the interest of the City in the Loan
Repayments to be made by the Corporation under the Loan
Agreement); and each Bond issued under the Indenture shall recite that
such Bond, including interest thereon, shall not constitute or give rise to
a charge against the general credit or taxing powers of the City.
(f) As required by the Act and Section 147(f) of the Internal Revenue Code
of 1986, as amended, the City Council of the City conducted a public
hearing on Tuesday, February 16, 1999, on the proposal to undertake and
finance the Project after publication in the official newspaper and a
newspaper of general circulation in the City of a notice setting forth the
time and place of hearing; stating the general nature of the Project and an
estimate of the principal amount of bonds or other obligations to be
issued to finance the Project; stating that a draft copy of the proposed
Application to the Minnesota Department of Trade and Economic
Development (the "Department"), together with all attachments and
exhibits thereto, was available for public inspection at the offices of the
City, at all times between the hours of 8:00 A.M. to 4:30 P.M. each day
except Saturdays, Sundays and legal holidays to and includingthe day of
hearing; and stating that all parties who appear at the public hearing shall
have an opportunity to express their views with respect to the proposal.
(g) It is hereby found, determined and declared that the Project furthers the
purposes set forth in the Act in that the purpose of the Project is and the
effect thereof will be to promote the public welfare by the enhancement
of the provision of health care facilities and services in the community.
4. Annroval and Execution of Documents. The forms of Note, Loan Agreement,
Mortgage, Assignment of Mortgage and Loan Agreement Assignment,
referred to in paragraph 2, are approved. The Loan Agreement, the Mortgage,
the Assignment of Mortgage and Loan Agreement Assignment shall be
executed in the name and on behalf of the City by the Mayor, the City
Manager and the City Clerk, or executed or attested by other officers of the
City, in substantially the form on file, but with all such changes therein, not
inconsistent with the Act or other law, as may be approved by the officers
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executing the same, which approval shall be conclusively evidenced by the
execution thereof and then shall be delivered to the Trustee.
5. Submission of Application. In accordance with the requirements of the Act,
officers of the City are hereby authorized and directed to submit the proposal for
the Project to the Department to request its approval thereof, and City officers,
employees, and agents are hereby authorized to provide the Department with
such information as it may require.
6. Approval Execution and Delivery of Note. Upon receipt of the Department's
approval, the City shall proceed forthwith to issue the Note, in a principal
amount not to exceed $700,000. The Mayor, City Manager, City Clerk and
other City officers are authorized and directed to prepare and execute the Note,
and deliver it to the Lender upon receipt of the purchase price. The Note shall
contain a recital that it is issued pursuant to the Act, and such recital shall to
the extent permitted by law be conclusive evidence of the validity and
regularity of the issuance thereof
7. Certificates, etc. The Mayor, City Manager, City Clerk and other officers of
the City are authorized and directed to prepare and furnish to bond counsel and
the purchaser of the Note, when issued, certified copies of all proceedings and
records of the City relating to 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 and
heretofore furnished, shall constitute representations of the City as to the truth
of all statements contained therein.
8. Oualified Tax-Exempt Obli ate ions. The Note is hereby designated as
"qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of
the Internal Revenue Code of 1986, as amended. The Note is to be issued on
behalf of an organization described in Section 501(c)(3) of the Code and is to
be issued as "qualified 501(c)(3) bonds" under Section 145 of the Code. The
City, together with all subordinate entities thereof, does not reasonably expect
to issue tax-exempt obligations, including the Note (other than private activity
bonds not constituting "qualified 501(c)(3) bonds"), which, when added
together with all such obligations heretofore issued by the City, or such
subordinate entities, in calendar year 1999, will be in an aggregate amount
exceeding $10,000,000 in calendar year 1999.
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Adopted by the City Council of the City of Hopkins t 's 16th day of February, 1999.
Charles D. Redepennirig,
ATTEST:
City Clerk
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