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2013-031 Augustana BondCITY OF HOPKINS HENNEPIN COUNTY, MINNESOTA RESOLUTION NO. 2013-31 RESOLUTION AUTHORIZING THE ISSUANCE, SALE, AND DELIVERY OF THE HOUSING FACILITIES REVENUE REFUNDING BOND (AUGUSTANA CHAPEL VIEW HOMES, INC. PROJECT), SERIES 2013, IN A PRINCIPAL AMOUNT NOT TO EXCEED $5,290,000, FOR THE BENEFIT OF AUGUSTANA CHAPEL VIEW HOMES, INC., PAYABLE SOLELY FROM REVENUES PLEDGED PURSUANT TO A LOAN AGREEMENT; APPROVING THE HOUSING PROGRAM IN CONNECTION THERETO; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE BOND, LOAN AGREEMENT, COOPERATIVE AGREEMENT, AND RELATED DOCUMENTS; AND PROVIDING FOR THE SECURITY, RIGHTS, AND REMEDIES WITH RESPECT TO THE BOND BE IT RESOLVED by the City Council of the City of Hopkins, Minnesota (the "City"), as follows: Section 1. Findings. 1.01. Minnesota Statutes, Chapter 462C, as amended (the "Housing Act"), authorizes a municipality to carry out the public purposes described in the Housing Act by providing for the issuance of revenue bonds to provide funds to finance or refinance multifamily housing developments. 1.02. Minnesota Statutes, Section 471.656, as amended, authorizes a municipality to issue obligations to finance the acquisition or improvement of property located outside of the corporate boundaries of such municipality if the obligations are issued under a joint powers agreement between the municipality issuing the obligations and the municipality in which the property to be acquired or improved is located. Pursuant to Minnesota Statutes, Section 471.59, as amended, by the terms of a joint powers agreement entered into through action of their governing bodies, two municipalities may jointly or cooperatively exercise any power common to the contracting parties or any similar powers, including those which are the same except for the territorial limits within which they may be exercised and the joint powers agreement may provide for the exercise of such powers by one or more of the participating governmental units on behalf of the other participating units. 1.03. Augustana Chapel View Homes, Inc., a Minnesota nonprofit corporation (the "Borrower"), has requested that the City issue a revenue obligation pursuant to the Housing Act to be designated the Housing Facilities Revenue Refunding Bond (Augustana Chapel View Homes, Inc. Project), Series 2013 (the "Bond"), in one or more series, and in the aggregate principal amount not to exceed $5,290,000. The proceeds of the Bond will be applied to (i) the financing of certain of the Borrower's existing senior housing facilities located at 1020 East 17ch Street and 1509 IOch Avenue South, Minneapolis, Minnesota (together, the "Project") by refunding the Housing Facilities Refunding Revenue Bonds (Augustana Chapel View Homes, Inc. Project), Series 2006A (the "Prior Bonds"), issued by the City of Minneapolis (the "City of Minneapolis") in the original aggregate principal amount of $7,010,000, which are currently outstanding in the aggregate principal amount of $5,470,000; and (ii) the payment of costs of issuance of the Bond and other costs related to the refunding of the Prior Bonds. Resolution No. 2013-031 -2- 1.04. The City and the City of Minneapolis are proposing to enter into a Cooperative Agreement, dated on or after June 1, 2013 (the "Cooperative Agreement"), pursuant to which the City of Minneapolis will consent to the issuance by the City of the Bond and the refinancing of the Project by the City and the City will agree to issue the Bond to refinance the Project. 1.05. In accordance with the Housing Act, the City has prepared a Housing Program (the "Housing Program"), which authorizes the issuance of the Bond by the City to refinance the Project and was submitted to the Metropolitan Council for its review and comment. On May 24, 2013, the City received correspondence from the Metropolitan Council acknowledging receipt of the Housing Program and providing its comments with respect to the Housing Program and the refinancing of the Project. 1.06. The Borrower has represented to the City that it is exempt from federal income taxation under Section 501(a) of the Internal Revenue Code of 1986, as amended (the "Code"), as a result of the application of Section 501(c)(3) of the Code. 1.07. Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations promulgated thereunder, and Section 462C.04 of the Housing Act require that prior to the issuance of the Bond, the City Council approve the issuance of the Bond after conducting a public hearing thereon preceded by publication of a notice of public hearing (in the form required by Section 147(f) of the Code and applicable regulations) in a newspaper of general circulation within the City at least fifteen (15) days prior to the public hearing date. 1.08. On the date hereof, the City Council conducted a duly noticed public hearing at which a reasonable opportunity was provided for interested individuals to express their views, both orally and in writing, on the following issues: (i) approval of the issuance of the Bond pursuant to the requirements of Section 147(f) of the Code and the regulations promulgated thereunder; and (ii) approval of the Housing Program pursuant to the requirements of the Housing Act. 1.09. The Bond is to be issued under the terms of this resolution. It is proposed that the Bond be sold to Venture Bank, a Minnesota banking corporation (the "Lender"). The proceeds derived from the sale of the Bond are to be loaned by the City to the Borrower pursuant to the terms of a Loan Agreement, dated on or after June 1, 2013 (the "Loan Agreement"), between the City and the Borrower. Proceeds of the Bond will be applied by the Borrower, together with other funds of the Borrower and funds transferred from a debt service reserve fund for the Prior Bonds, to refinance the Project. 1.10. The loan repayments required to be made by the Borrower under the terms of the Loan Agreement and certain other rights will be assigned to the Lender under the terms of the Pledge Agreement, dated on or after June 1, 2013 (the "Pledge Agreement"), between the City and the Lender. 1.11. In consideration of the loan by the City of the proceeds of the Bond to the Borrower and to secure the payment of its obligations under the Loan Agreement and the principal of, premium, if any, and interest on the Bond when due, the Borrower will execute and deliver an Amended and Restated Combination Mortgage, Security Agreement and Fixture Financing Statement and Assignment of Leases and Rents, dated on or after June 1, 2013 (the "Mortgage"), between the Borrower and the Lender. In addition, Augustana Care, a Minnesota nonprofit corporation and the sole member of the Borrower (the "Guarantor"), will deliver a Guaranty Agreement, dated on or after June 1, 2013 (the "Guaranty Agreement"), to the Lender to guarantee payment of the principal of and the interest on the Bond, until the Guaranty Agreement is released pursuant to the terms thereof. Resolution No. 2013-031 -3- 1.12. The principal of, premium, if any, and interest on the Bond (i) shall be payable solely from the revenues pledged and otherwise available therefor; (ii) shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; (iii) shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers; and (iv) shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City other than the City's interest in the Loan Agreement. Section 2. The Bond. 2.01. For the purposes set forth above, there is hereby authorized the issuance, sale and delivery of the Bond in an aggregate principal amount not to exceed $5,290,000. The Bond shall bear interest at rates designated by the terms of the Bond, and shall be designated, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other terms, details, and provisions as are prescribed in the form of the Bond now on file with the City, with the amendments referenced herein. The City hereby authorizes the Bond to be issued as a "tax-exempt bond" the interest on which is not includable in gross income for federal and State of Minnesota income tax purposes. 2.02. All of the provisions of the Bond, when executed 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. The Bond shall be substantially in the form now on file with the City, which form is hereby approved, with such necessary and appropriate variations, omissions, and insertions (including changes to the name of the Bond, the aggregate principal amount of the Bond, the stated maturity of the Bond and the maturity date of the Bond, the interest rate on the Bond, and the terms of optional and mandatory redemption of the Bond) as the Mayor and the City Manager (the "Mayor" and the "City Manager," respectively), in their discretion, shall determine. The Mayor and the City Manager are authorized and directed to prepare the Bond, and the Bond shall be delivered to the Lender. The execution of the Bond with the manual or facsimile signatures of the Mayor and the City Manager and the delivery of the Bond by the City shall be conclusive evidence of such determination. The City Council of the City hereby authorizes and directs the Mayor and the City Manager to execute and deliver the Bond. 2.03. The Bond shall be a special limited obligation of the City, and the principal, premium, and interest on the Bond shall be payable solely from the proceeds of the Bond, the revenues derived from the Borrower pursuant to the terms of the Loan Agreement and the security provided by the Borrower in accordance with the terms of the Loan Agreement, the Mortgage, and any and all other security of any kind or nature provided by the Borrower to the Lender. 2.04. As provided in the Loan Agreement, the Bond shall not be payable from nor charged upon any funds other than the revenues pledged to its payment, nor shall the City be subject to any liability thereon, except as otherwise provided in this paragraph. No holder of the Bond shall ever have the right to compel any exercise by the City of its taxing powers to pay any of the Bond or the interest or premium thereon, or to enforce payment thereof against any property of the City except the interests of the City in the Loan Agreement and the revenues and assets thereunder, which will be assigned to the Lender under the Pledge Agreement. The Bond 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, and the revenues and assets thereunder, which will be assigned to the Lender under the Pledge Agreement. The Bond shall recite that the Bond is issued pursuant to the Housing Act, and that the Bond, including interest and premium, if any, thereon, is payable solely from the revenues and assets pledged to the payment thereof, and the Bond shall not constitute a debt of the City within the meaning of any constitutional or statutory limitations. Resolution No. 2013-031 -4- Section 3. The Cooperative Agreement. The Cooperative Agreement is hereby approved. The Mayor and the City Manager are hereby authorized and directed to execute and deliver the Cooperative Agreement. All of the provisions of the Cooperative Agreement, 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. The Cooperative Agreement shall be substantially in the form on file with the City, with such omissions and insertions as do not materially change the substance thereof, or as the Mayor and City Manager, in their discretion, shall determine, and the execution of the Cooperative Agreement by the Mayor and the City Manager shall be conclusive evidence of such determination. Section 4. The Loan Agreement. The Mayor and the City Manager are hereby authorized and directed to execute and deliver the Loan Agreement. All of the provisions of the Loan Agreement, 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. The Loan Agreement shall be substantially in the form on file with the City which is hereby approved, with such omissions and insertions as do not materially change the substance thereof, or as the Mayor and the City Manager, in their discretion, shall determine, and the execution thereof by the Mayor and the City Manager shall be conclusive evidence of such determination. Section 5. Disbursements of Bond Proceeds. The proceeds of the Bond shall be disbursed in accordance with the terms of the Loan Agreement. Section 6. The Pledge Agreement. The Mayor and the City Manager are hereby authorized and directed to execute and deliver the Pledge Agreement. All of the provisions of the Pledge Agreement, 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. The Pledge Agreement shall be substantially in the form on file with the City which is hereby approved, with such omissions and insertions as do not materially change the substance thereof, or as the Mayor and the City Manager, in their discretion, shall determine, and the execution thereof by the Mayor and the City Manager shall be conclusive evidence of such determination. Section 7. Other Documents. The Mayor, the City Manager, and the Finance Director of the City are hereby authorized to execute and deliver, on behalf of the City, such other documents as are necessary or appropriate in connection with the issuance, sale, and delivery of the Bond, including one or more certificates of the City, an endorsement of the City to the tax certificate of the Borrower, an Information Return for Tax -Exempt Private Activity Bond Issues, Form 8038, and all other documents and certificates as shall be necessary and appropriate in connection with the issuance, sale, and delivery of the Bond. The City hereby authorizes Kennedy & Graven, Chartered to prepare, execute, and deliver its approving legal opinion with respect to the Bond. Section 8. The City and Its Officers, Employees, and Agents. 8.01. Except as otherwise provided in this resolution, all rights, powers, and privileges conferred and duties and liabilities imposed upon the City or the City Council by the provisions of this resolution or of the aforementioned documents shall be exercised or performed by the City or by such members of the City Council, or such officers, board, body, or agency thereof as may be required or authorized by law to exercise such powers and to perform such duties. Resolution No. 2013-031 -5- 8.02. No covenant, stipulation, obligation, or agreement herein contained or contained in the aforementioned documents shall be deemed to be a covenant, stipulation, obligation, or agreement of any member of the City Council of the City, or any officer, agent, or employee of the City in that person's individual capacity, and neither the City Council of the City nor any officer or employee executing the Bond shall be liable personally on the Bond or be subject to any personal liability or accountability by reason of the issuance thereof. 8.03. No provision, covenant, or agreement contained in the aforementioned documents, the Bond, or in any other document relating to the Bond, and no obligation therein or herein imposed upon the City or the breach thereof, shall constitute or give rise to any pecuniary liability of the City or any charge upon its general credit or taxing powers. In making the agreements, provisions, covenants, and representations set forth in such documents, the City has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived from the Loan Agreement which are to be applied to the payment of the Bond, as provided therein. 8.04. Except as herein otherwise expressly provided, nothing in this resolution or in the aforementioned documents expressed or implied, is intended or shall be construed to confer upon any person or firm or corporation, other than the City or any holder of the Bond, any right, remedy, or claim, legal or equitable, under and by reason of this resolution or any provisions hereof, the aforementioned documents and all of their provisions being intended to be and being for the sole and exclusive benefit of the City and any holders from time to time of the Bond. Section 9. Severability: In case any one or more of the provisions of this resolution, other than the provisions contained in Section 2.03 hereof, or of the aforementioned documents, or of the Bond issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution, or of the aforementioned documents, or of the Bond, but this resolution, the aforementioned documents, and the Bond shall be construed and endorsed as if such illegal or invalid provisions had not been contained therein. Section 10. Validity of the Bond. The Bond, when executed and delivered, shall contain a recital that it is issued pursuant to the Housing Act, and such recital shall be conclusive evidence of the validity of the Bond and the regularity of the issuance thereof, and that all acts, conditions, and things required by the laws of the State of Minnesota relating to the adoption of this resolution, to the issuance of the Bond, and to the execution of the aforementioned documents to happen, exist, and be performed precedent to the execution of the aforementioned documents have happened, exist, and have been performed as so required by law. Section 11. Authorization for Other Acts. The officers of the City, bond counsel, other attorneys, engineers, and other agents or employees of the City are hereby authorized to do all acts and things required of them by or in connection with this resolution, the aforementioned documents, and the Bond for the full, punctual, and complete performance of all the terms, covenants, and agreements contained in the Bond, the aforementioned documents and this resolution. In the event that for any reason the Mayor is unable to carry out the execution of any of the documents or other acts provided herein, any persons delegated the duties of the Mayor shall be authorized to act in the capacity of the Mayor and undertake such execution or acts on behalf of the City with full force and effect, which execution or acts shall be valid and binding on the City. If for any reason the City Manager is unable to execute and deliver the documents referred to in this resolution, such documents may be executed by any person delegated the duties of the City Manager, with the same force and effect as if such documents were executed and delivered by the City Manager. Resolution No. 2013-031 -6- Section 12. Designation of Bond as "Bank -Qualified." The City hereby designates the Bond as a "qualified tax-exempt obligation" for purposes of Section 265(b)(3) of the Code. Section 13. Payment of Costs. The Borrower has agreed to pay directly or through the City any and all costs paid or incurred by the City in connection with the transactions authorized by this resolution, whether or not the Bond is issued. Section 14. Payment of City's Administrative Fee. The Loan Agreement will require the Borrower to pay the City's annual bond administrative fee in the amount of one-eighth of one percent (0.125%) of the outstanding principal amount of the Bond, as set forth in the Loan Agreement. Section 15. Effective Date. This resolution shall be in full force and effect from and after its passage. Adopted by the City Council of the City of Hopkins, Minnesota, this 4`" day of June, 2013. By: Euge . M well, Mayor Attest: Kristine A. Luedke, City Clerk