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HomeMy WebLinkAboutResolution - 2002-82 - Relating to Residential Group Home Facilities Owned and Operated by Fraser, a MN Nonprofit Corporation, and the Issuance of Revenue Bonds - 04/16/2002 CITY OF EDEN PRAIRIE HENNEPIN COUNTY, MINNESOTA RESOLUTION NO.2002-82 RESOLUTION RELATING TO RESIDENTIAL GROUP HOME FACILITIES OWNED AND OPERATED BY FRASER, A MINNESOTA NONPROFIT CORPORATION, AND THE ISSUANCE OF REVENUE BONDS TO FINANCE THE COSTS THEREOF UNDER MINNESOTA STATUTES, CHAPTER 462C, AS AMENDED, AND MINNESOTA STATUTES, SECTIONS 469.152-469.165, AS AMENDED, PURSUANT TO A JOINT POWERS AGREEMENT; GRANTING PRELIMINARY APPROVAL THERETO; ESTABLISHING COMPLIANCE WITH CERTAIN REIMBURSEMENT REGULATIONS UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED; GRANTING APPROVAL FOR ENTERING INTO A JOINT POWERS AGREEMENT; AND TAKING CERTAIN OTHER ACTIONS WITH RESPECT THERETO BE IT RESOLVED by the City Council of the City of Eden Prairie, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. The City is a statutory city duly organized and existing under the Constitution and laws of the State of Minnesota. 1.02. Pursuant to Minnesota Statutes, Chapter 462C, as amended, and Minnesota Statutes, Sections 469.152 - 469.165, as amended, (collectively, the "Act"), the City is authorized to carry out the public purposes described in the Act by providing for the issuance of revenue bonds to provide funds to finance multifamily housing developments and revenue producing enterprises located within the City. 1.03. Fraser, a Minnesota nonprofit corporation (the "Company") has proposed that the City, pursuant to the Act, authorize the City of Blaine, Minnesota (the "City of Blaine") to issue revenue bonds of the City of Blaine in the approximate aggregate principal amount not to exceed $4,000,000, in one or more series at one time or from time to time (the"Bonds"), the proceeds of which will be loaned by the City of Blaine to the Company to be applied by the Company to: (i)refinance the costs to the Company of twenty-two residential group home facilities (collectively, the "Project") located in the City, the City of Blaine, and in the cities of Brooklyn Park, Edina, Golden Valley,Minnetonka, Plymouth and Richfield (collectively with the City and the City of Minneapolis, the "Participant Cities"), including the group home facilities located at 12660 Porcupine Court, 9091 Neill Lake Road, 12166 Oxbow Drive, and 7525 Carnelian Lane in the City; (ii) finance the costs of the rehabilitation of the residential group home facilities comprising the Project; (iii)refinance the costs of a development achievement center for children with autism and related disorders located at 3333 University Avenue S.E. in the City of Minneapolis (the"Minneapolis Facility"); and (iv) finance the costs of issuing the Bonds. 1.04. The City is required to adopt a housing program (the `Mousing Program") pursuant to Section 462C.03, subdivision 1 a, of the Act,prior to the issuance of revenue bonds. 1.05. Under Section 147(f) of the Internal Revenue Code of 1986, as amended (the"Code"), prior to the issuance of the Bonds, a public hearing, duly noticed, must be held by the City Council. Under Section 462C.04, subdivision 2, of the Act, the City must conduct a public hearing, duly noticed, with respect to the Housing Program and the portion of the Project located in the City. A public hearing was held on April 16, 2002, after publication of notice on March 27, 2002, in the Eden Prairie News, a newspaper circulating generally in the City, with respect to: (i) the required public hearing under Section 147(f) of the Code; (ii) the Housing Program; and(iii)the preliminary approval of the issuance of the Bonds. Section 2. Preliminary Findings. Based on representations made by the Company to the City to date, the City Council of the City hereby makes the following preliminary findings, determinations, and declarations: (a) The Bonds will refinance the outstanding indebtedness incurred with respect to the residential group home facilities for the developmentally disabled comprising the Project and will also refinance a development achievement center for children with autism and related disorders comprising the Minneapolis Facility. (b) The proceeds of the Bonds will be loaned to the Company by the City of Blaine and the proceeds of the loan will be applied to refinance the Project, finance the rehabilitation of the Project, refinance the Minneapolis Facility, and finance the issuance costs of the Bonds. The City of Blaine will enter into a Loan Agreement with the Company requiring loan repayments from the Company in amounts sufficient to repay the loan when due and requiring the Company to pay all costs of maintaining and insuring the Project, including taxes thereon. (c) In authorizing the issuance of the Bonds and the financing and refinancing of the portion of the Project located in the City and related costs, the City's purpose is and the effect thereof will be to promote the public welfare of the City and its residents by retaining and improving group home facilities and otherwise furthering the purposes and policies of the Act. (d) The Bonds will be limited obligations of the City of Blaine payable solely from the revenues pledged to the payment thereof, and will not be a general or moral obligation of the City or be secured by the taxing power or any property or assets of the City. Section 3. Preliminary Approval. The City Council hereby gives preliminary approval to the issuance of the Bonds pursuant to a Joint Powers Agreement with the City of Blaine and the Participant Cities in the approximate aggregate principal amount not to exceed $4,000,000 to finance all or a portion of the costs of the Project and the Minneapolis Facility, subject to final approval by the City Council of the City of Blaine, following the preparation of bond documents and a determination by the City of Blaine that the financing of the Project and the Minneapolis Facility and the issuance of the Bonds are in the best interests of the Participant Cities and the City of Blaine. Section 4. Joint Powers Agreement. The City* Council hereby approves a Joint Powers Agreement between the Participant Cities and the City of Blaine (the "Joint Powers Agreement") substantially in the form of the Joint Powers Agreement now on file with the City. The City Council hereby authorizes the execution and delivery of the Joint Powers Agreement by the Mayor and Acting City Manager of the City (or by other members of the City Council or other officers of the City who are authorized to execute and delivery the Joint Powers Agreement on behalf of the City) consistent with the provisions of this resolution. Section 5. Housing Program. The City Council hereby approves the Housing Program and authorizes submission of the Housing Program to the Metropolitan Council for its review pursuant to Minnesota Statutes, Section 462C.04, subdivision 2. Section 6. Reimbursement of Costs under the Code. 6.1. The United States Department of the Treasury has promulgated final regulations, designated as Treasury Regulations, Section 1.150-2 (the "Regulations"), governing the use of the proceeds of tax-exempt bonds, all or a portion of which are to be used to project expenditures paid prior to the date of issuance of such bonds. The Regulations require that the City adopt a statement of official intent to reimburse an original expenditure not later than sixty days after payment of the original expenditure. The Regulations also generally require that the bonds be issued and the reimbursement allocation made from the proceeds of the bonds occur within eighteen months after the later of (i) the date the expenditure is paid; or(ii) the date the project is placed in service or abandoned, but in no event more than three years after the date the expenditure is paid. The Regulations generally permit reimbursement of capital expenditures and costs of issuance of the bonds. 6.2. To the extent any portion of the proceeds of the Bonds will be applied to expenditures with respect to the Project, the City reasonably expects to reimburse the Company for the expenditures made for costs of the Project from the proceeds of the Bonds after the date of payment of all or a portion of such expenditures. All reimbursed expenditures shall be capital expenditures, a cost of issuance of the Bonds, or other expenditures eligible for reimbursement under Section 1.150-2(d)(3) of the Regulations and also qualifying expenditures under the Act. Based on representations by the Company, other than (i) expenditures to be paid or reimbursed from sources other than the Bonds, (ii) expenditures permitted to be reimbursed under prior regulations pursuant to the transitional provision contained in Section 1.150- 20)(2)(i)(B) of the Regulations, (iii) expenditures constituting preliminary expenditures within the meaning of Section 1.150-2(f)(2) of the Regulations, or (iv) expenditures in a "de minimus" amount (as defined in Section 1.150-2(f)(1) of the Regulations), no expenditures with respect to the Project have been made by the Company more than sixty days before the date of adoption of this resolution. 6.3. Based on representations by the Company, as of the date hereof, there are no funds of the Company reserved, allocated on a long term-basis or otherwise set aside (or reasonably expected to be reserved, allocated on a long-term basis or otherwise set aside) to provide permanent financing for the expenditures related to the Project to be financed from proceeds of the Bonds, other than pursuant to the issuance of the Bonds. This resolution, I therefore, is determined to be consistent with the budgetary and financial circumstances of the Company as they exist or are reasonably foreseeable on the date hereof. Section 7. Costs. The Company will pay the administrative fees of the City and pay, or, upon demand, reimburse the City for payment of, any and all costs incurred by the City in connection with the Project, the Minneapolis Facility, and the issuance of the Bonds, whether or not the Bonds are issued. Section 8. Commitment Conditional. The adoption of this resolution does not constitute a guarantee or a firm commitment that the City of Blaine will issue the Bonds as requested by the Company. The City also retains the right, in its sole discretion, to withdraw from participation should the City Council, at any time prior to the issuance thereof, determine that it is in the best interests of the City not participate in the financing of the Project and the Minneapolis Facility or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents for the transaction. Section 9. 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 Eden Prairie, Minnesota, on this 16th day of April, 2002. By N cy a- ens,KQor By Carl J. Jull�(ejoly Manager