7.1. SR 08-03-2015 EOty1� ,.,�� Request for Action
River
To Item Number
Mayor and City Council 7.1
Agenda Section Meeting Date Prepared by
Public Hearin s lAugust 3, 2015 Tim Simon, Finance Director
Item Description Reviewed by
Guardian Angels Health Services,Inc. Conduit Cal Portner, City Administrator
Bond Preliminary Approval Reviewed by
Action Requested
Adopt,by motion, a resolution giving preliminary approval for the issuance of revenue bonds in an
aggregate amount up to $4,000,000 at the request of Guardian Angels Health Services,Inc.
Background/Discussion
Guardian Angels has made an application to the city to issue up to $4 million in conduit financing
revenue bonds for renovating,improving, and equipping their skilled-nursing facility located at 400 Evans
Avenue. Total project cost is estimated at$4.2 million. Some of the projects will include:
■ Restroom additions ■ New nurses'work area
■ Increasing the number of private rooms ■ Redesigned dining area
■ HVAC upgrades ■ New entry/vestibule
■ Boiler replacements ■ New nourishment area
■ Sun room of the main dining area ■ Replace flooring,windows, roof
Municipal issuance of conduit bonds is a common financing mechanism that allows the use of the tax-
exempt financing by a qualified applicant rather than taxable bonds to save interest costs. Annually,
municipalities are granted a bank-qualified exemption of up to $10 million to issue tax-exempt bonds.
While the city neither guarantees nor is liable for conduit bonds, they do count against the city's $10
million annual exemption. We don't anticipate any bond issues that would be applied against this
exemption for 2015.
If the preliminary resolution is approved, the final resolution and approval would be on the September 81h
Council meeting.
Financial Impact
None, since conduit bonds are not be secured by a general obligation pledge and the city/HRA/EDA
would not be responsible or liable for debt service payments. The applicant has paid the application fee
and upon closing,will complete the issuance fee.
Attachments
■ Resolution
■ Deed application
■ Comprehensive Statement
POWERED 6T
Template Updoted 4/14 INAMIRE1
CERTIFICATE
CITY OF ELK RIVER
I, the undersigned being a duly qualified and acting officer of the City of Elle River,
Minnesota, hereby attest and certify that:
1. As such officer, I have the legal custody of the original record from which the
attached resolution was transcribed.
2. I have carefully compared the attached resolution with the original record of the
meeting at which the resolution was acted upon.
3. I find the attached resolution to be a true, correct and complete copy of the
original:
A RESOLUTION PROVIDING PRELIMINARY APPROVAL TO A PROJECT
AND THE ISSUANCE OF REVENUE BONDS IN AN AGGREGATE
AMOUNT UP TO $4,000,000, AT THE REQUEST OF GUARDIAN ANGELS
HEALTH SERVICES, INC.
4. I further certify that the affirmative vote on said resolution was ayes,
nays, and absent/abstention.
5. Said meeting was duly held, pursuant to call and notice thereof, as required by
law, and a quorum was present.
WITNESS my hand officially as such officer this day of , 2015.
Tina Allard, City Clerk
Resolution No. 15-
A Resolution Providing Preliminary Approval To A Project And The
Issuance Of Revenue Bonds In An Aggregate Amount Up To
$4,000,000, At The Request Of Guardian Angels Health Services, Inc.
BE IT RESOLVED by the City Council of the City of Elle River, Minnesota(the "City"
or the "Issuer"), as follows:
1. Authority. Pursuant to Minnesota Statutes, Chapter 462C, as amended (the
"Act"), the City is authorized to issue revenue bonds and refunding revenue bonds and sell such
bonds at public or private sale as may be determined by the governing body to be most
advantageous; and to loan the proceeds of such bonds to provide financing and refinancing for
projects and multifamily housing developments, all as further provided in the Act, and to refund
bonds previously issued therefor under the Act. Such bonds are authorized to be secured by a
pledge of the revenues to be derived from a loan agreement with the borrower of such proceeds,
and by such other security devices as may be deemed advantageous. Under the provisions of the
Act, such bonds shall be special, limited obligations, and shall not constitute an indebtedness of
the issuer thereof, within the meaning of any state constitutional provision or statutory limitation,
nor give rise to a pecuniary liability of the issuer or a charge against its general credit or taxing
powers.
2. Public Hearing. On August 3, 2015, a public hearing was held by the City
Council (the "Public Hearing"), with respect to a proposal by Guardian Angels Health Services,
Inc., a Minnesota nonprofit corporation (the "Borrower"), to undertake a project consisting of the
acquisition, construction and equipping of improvements to the existing skilled nursing facility
of the Borrower(the "Project"), located at 400 Evans Avenue in the City, and the issuance of
revenue bonds, pursuant to the Act, in an aggregate principal amount not to exceed $4,000,000
(the "Bonds") by the City to provide financing therefor. The Public Hearing was called and held
as required by the Act and the provisions of section 147(f) of the Internal Revenue Code of 1986,
as amended (the "Code") and regulations thereunder. Following the Public Hearing, all persons
present had an opportunity to express their views with respect to the Project and the issuance of
the Bonds.
3. Findings. It is hereby found, determined and declared that:
a. Based on information provided by the Borrower, the Project and the
issuance of the Bonds will further the purposes and policies of the Act and promote the
public welfare by providing improved health care facilities to residents of the City.
b. There is no litigation pending or, to the knowledge of the Issuer,
threatened against the Issuer relating to the Project or the Bonds, or questioning the
organization, powers or authority of the Issuer to issue the Bonds.
C. Under the provisions of the Act, the Bonds shall not be payable from or
charged upon any funds other than amounts pledged thereto,including amounts to be
payable by the Borrower pursuant to a loan agreement to be entered into between the Issuer
and the Borrower;the Issuer is not subject to any liability thereon;no owner of the Bonds
shall ever have the right to compel the exercise of the taxing power of the Issuer to pay the
Bonds or the interest thereon, nor to enforce payment thereof against any property of the
Issuer;neither the Bonds nor any document executed or approved in connection with the
issuance thereof shall constitute a pecuniary liability, general or moral obligation, charge,
lien or encumbrance, legal or equitable,upon any property of the Issuer; and the Bonds shall
not constitute or give rise to a charge against the general credit or taxing powers of the
Issuer.
4. Application to Department of Employment and Economic Development; Approval of
Projects. Pursuant to the Act, an Application to the Department of Employment and Economic
Development of the State of Minnesota("DEED") for approval the Project, together with the
various exhibits thereto required by DEED, was placed on file with the City at the time that
notice was published, in accordance with the Act, of the Public Hearing. The Mayor, the City
Clerk, the City Finance Officer and other officers and employees of the City are authorized to
take such actions as may be required to submit the Application to DEED and obtain the approval
therof from DEED, all pursuant to and as required by the Act.
5. Preliminary approval. Preliminary approval is hereby given to the Project and the
issuance of the Bonds, in an aggregate principal amount not to exceed $4,000,000; subject,
however, to approval by DEED of the Project as tending to further the purposes and policies of
the Act, and subject to final approval by the City Council of the details of the Bonds, the
provision for payment thereof, and the forms of the legal documents to be entered into by the
City in connection therewith. The Bonds shall not constitute a charge, lien or encumbrance,
legal or equitable, upon any property of the City, except the revenues to be received from the
Borrower specifically pledged to the payment thereof, and each Bond, when, as and if issued,
shall recite in substance that such Bond, including interest thereon, is payable solely from said
revenues and funds specifically pledged to the payment thereof, and shall not constitute a debt or
pecuniary liability of the City within the meaning of any constitutional or statutory limitation.
All costs of the City relating to the issuance of the Bonds, whether or not successfully
issued, shall be paid or reimbursed by the Borrower.
The Borrower and other parties are hereby authorized to undertake preparation of such
documents as may be necessary or desirable in connection with the issuance of the Bonds,
including a loan agreement to be entered into between the Issuer and the Borrower, a trust
indenture to be entered into between the Issuer and a corporate trustee to be identified by the
Borrower, and such further legal and disclosure documents as the Borrower may determine.
6. Qualified Tax-Exempt Obligations. Pursuant to Section 265(b)(3) of the Internal
Revenue Code of 1986, as amended (the "Code"), the City hereby designates the Bonds, in an
amount not to exceed $4,000,000, as "qualified tax-exempt obligations,"within the meaning of
Section 265(b)(3). The Bonds are to be issued on behalf of an organization described in Section
501(c)(3) of the Code and are 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 Bonds (other than private activity bonds not
constituting "qualified 501(c)(3) bonds") which, when added together with all such obligations
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heretofore issued by the City in calendar year 2015, will be in an aggregate amount exceeding
$10,000,000 in the current calendar year.
Adopted by the City Council of the City of Elle River this 3rd day of August, 2015.
John J. Dietz, Mayor
Attest:
Tina Allard, City Clerk
4832-5825-1813\1
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nnzm
Application for Approval of Industrial Development/Revenue Bond Project
Pursuant to Minn. Stat. 469.152—469.165
Page 1 of 3
Please submit two copies of this form but only one copy of supporting documents requested on page 2.
Name of Issuer(Municipality or Redevelopment agency): City of Elk River, Minnesota
Contracting Party Business Name: Guardian Angels Health Services, Inc.
Business Industry and/or Products: Operation of skilled nursing facilities
Description of Project Financed by Bond Proceeds:
Renovation, improvement and equipping of the existing Guardian Angels Care Center
Location (address and city) of Project: 400 Evans Avenue, Elk River, Minnesota
Dates of Construction (if applicable): September, 2015,through August, 2016
Date Project Funded by Bonds Expected to be Operational: The facility is expected to remain open and
operational throughout the renovation period
New(not currently in Minnesota) Permanent Full-Time Jobs Created by Project: None
Expected Annual Wages of New Full-Time Jobs: N/A
Current Jobs at Location: 230
Amount of Issuance Authority Expected to be Requested from MMB: N/A
Maturity Schedule and Interest Rates: October 1, 2037 --October 1, 2041;
Approximately 4.75%
Bond Counsel: Richard Helde, Dorsey&Whitney LLP Phone: (612) 343-7912
nnzm
Application for Approval of Industrial Development/Revenue Bond Project
Pursuant to Minn.Stat.469.152—469.165
Page 2 of 3
The following exhibits are furnished with this application and are incorporated herein by reference:
1. An opinion of bond counsel that the proposal constitutes a project under Minn. Stat. 469.153, Subd. 2.
2. A copy of the resolution by the governing body of the Issuer giving preliminary approval for the issuance
of its revenue bonds and stating that the project, except for a project under Minn. Stat. 469.153, Subd.
2(g) or(j),furthers the purposes of Minn. Stat. 469.152—469.165.
3. A letter of intent to purchase the bond issue or a letter confirming the feasibility of the project from a
financial standpoint.
4. A comprehensive statement by the municipality indicating how the project satisfies the purposes of
Minn. Stat. 469.152 -469.165.
5. A statement signed by a representative of the Issuer that the project does not include any property to
be sold or affixed to or consumed in the production of property for sale, and does not include any
housing facility to be rented or used as a permanent residence.
6. A statement signed by a representative of the Issuer that a public hearing was conducted pursuant to
Minn. Stat. 469.154, Subd. 4. The statement shall include the date,time and place of the meeting and
certify that a draft copy of this application with all attachments was available for public inspection and
that al interested parties were afforded an opportunity to express their views.
7. A statement signed by the principal representative of the issuing authority to the effect that upon
entering into the revenue agreement,the information required by Minn. Stat. 469.154, Subd. 5 will be
submitted to the Department(not applicable to projects under Minn. Stat. 469.153, Subd. 2(g) or(j).
8. The plan for encouraging the targeting of employment opportunities to economically disadvantaged or
unemployed individuals. (See Minn. Stat. 469.154, Subd. 7.)
9. Affidavit(s) of publication or copies of notice(s) as published which indicate the dates) of publication
and the newspaper(s) in which the notice(s)were published.
nnzm
Application for Approval of Industrial Development/Revenue Bond Project
Pursuant to Minn.Stat.469.152—469.165
Page 3 of 3
We,the undersigned, are principal officer(s) or representative(s) of the Issuer
and solicit DEED's approval of this project.
John J. Dietz, Mayor
Signature Print Name and Title
13065 Orono Parkway Elk River, MN 55330
Street Address City, State and Zip
john.dietz@elkrivermn.gov August 3,2015
E-Mail Date
Tina Allard, City Clerk
Signature Print Name and Title
13065 Orono Parkway Elk River, MN 55330
Street Address City, State and Zip
tallard@elkrivermn.gov August 3, 2015
E-Mail Date
DEED Approval
Authorized Signature Approval Date
(Approval shall not be deemed to be an approval on the feasibility of the project or the terms
of the revenue agreement to be executed or the bonds to be issued thereof.)
Send two copies of form and one copy of supporting documents noted on page 2 to:
Minnesota Department of Employment and Economic Development
Bob Isaacson, Director,JOBZ& Business Finance
1St National Bank Building
332 Minnesota Street, Suite E200
St. Paul, Minnesota 55101
Phone: 651-259-7458
E-mail: Bob.Isaacson @state.mn.us
Fax: 651-296-5287
COMPREHENSIVE STATEMENT
The undersigned, being the duly qualified and acting City Clerk of the City of Elk River,
Minnesota(the "City"), DO HEREBY CERTIFY on behalf of the City that the governing body
of the City (the "City Council") has been provided by representatives of Guardian Angels Health
Services, Inc., a Minnesota nonprofit corporation (the `Borrower"), with certain information
concerning a proposed project under the Minnesota Municipal Industrial Development Act,
Minnesota Statutes, Sections 469.152 through 469.165, as amended (the "Act"). On the basis of
such information, the City Council, by resolution adopted August 3, 2015, has given approval to
the proposed Project and the financing thereof by the issuance, in one or more series, of revenue
bonds (the "Bonds") of the City. The following are factors considered by the City Council in
determining to give approval to the project:
1. The proposed project consists generally of the renovation, improvement and
equipping of Guardian Angels Care Center(the "Project"). The Project is located at 400 Evans
Avenue in the City.
2. Dorsey& Whitney, LLP, as Bond Counsel to the Underwriter, is of the opinion that
the Project constitutes a"project" within the meaning of Minnesota Statutes, Section 469.153,
subdivision 2(d).
3. The issuance of the Bonds to undertake the Project will promote the public purposes
and legislative objectives of the Act by providing substantial inducement for the expansion of the
health care operations of the Borrower in the City at the lowest possible cost.
4. The City will provide the Minnesota Department of Employment and Economic
Development (the "Department") with the information required by Minnesota Statutes, Section
469.154, subdivision 5, upon entering into a revenue agreement (as defined in the Act) with the
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Borrowers, and the information required by Minnesota Statutes, Section 469.154, subdivision 7,
as required.
5. The project to be financed by the Bonds does not include any property to be sold or
affixed to or consumed in the production of property for sale, and does not include any housing
facility to be rented or used as a permanent residence.
6. A public hearing on the proposal to issue the Bonds was conducted pursuant to
Minnesota Statutes, Section 469.154, Subdivision 4, and Section 1470 of the Internal Revenue
Code of 1986, as amended, on August 3, 2015 at 6:30 p.m., at the Elk River City Hall, at which
public hearing all interested parties were afforded an opportunity to express their views. A draft
copy of the application to the Department, with all attachments, was available for public
inspection following publication of notice of the public hearing.
[The remainder of this page left intentionally blank.]
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Dated: August 3, 2015.
CITY OF ELK RIVER, MINNESOTA
By
Tina Allard, City Clerk
[Signature Page—Comprehensive Statement]
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