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6.2. SR 07-10-2000-~ of Item #6.2. TO: FROM: DATE: SUBJECT: Mayor and Council Lori Johnson, Finance Director July 10, 2000 Consider Resolution Approving the Issuance and Sale of Multifamily Housing Revenue Bonds to Provide Funds for a Multifamily Housing Project on Behalf of West Suburban Housing Partners II Limited Partnership In April, the City Council approved a resolution providing for the issuance and sale of the above referenced bonds to provide $3,600,000 for several apartment projects in Elk River. Attached is the final resolution needed to complete the bond issuance for these projects. As a reminder, the city is in no way responsible for this debt obligation and it does not affect the city's bond rating or outstanding debt. Action Requested The City Council is asked to consider the attached resolution approving the issuance and sale of multifamily housing revenue bonds to provide funds for multifamily housing projects on behalf of West Suburban Housing Partners II Limited Partnership. s: \ council \ housbond.doc 13065 Orono Parkway · P.O. Box 490 · Elk River, MN 55330 · TDD & Phone: (612) 441-7420 · Fax: (612) 441-7425 Extract of Minutes of Meeting of the City Council of the City of Elk River, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Elk River, Minnesota was duly held at City Hall in said City of Elk River, on Monday, the 10th day of July, 2000, commencing at o'clock _.M. The following Council members were present: and the following were absent: Council member then introduced and read the following written resolution and moved its adoption: A RESOLUTION APPROVING THE ISSUANCE AND SALE OF MULTIFAMILY HOUSING REVENUE BONDS TO PROVIDE FUNDS FOR A MULTIFAMILY HOUSING PROJECT ON BEHALF OF WEST SUBURBAN HOUSING PARTNERS II LIMITED PARTNERSHIP The motion for the adoption of the foregoing resolution was duly seconded by Council member , and upon vote being taken thereon the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. 1180830.1 RESOLUTION NO. A RESOLUTION APPROVING THE ISSUANCE AND SALE OF MULTIFAMILY HOUSING REVENUE BONDS, TO PROVIDE FUNDS FOR A MULTIFAMILY HOUSING PROJECT, ON BEHALF OF WEST SUBURBAN HOUSING PARTNERS II LIMITED PARTNERSHIP BE IT RESOLVED by the City Council of the City of Elk River, Minnesota (the "City"), as follows: 1. Authority. The City is, by the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Chapter 462C, as amended (the "Act"), authorized to issue and sell its revenue bonds for the purpose of financing or refinancing the cost of housing developments and to enter into agreements necessary or convenient in the exercise of the powers granted by the Act. 2. Authorization of Project; Documents Presented. West Suburban Housing Partners II Limited Partnership, a limited partnership organized under the laws of Minnesota (the "Company"), has proposed to this Council that the City issue and sell its Variable Rate Demand Multifamily Housing Revenue Bonds (Elk River Estates and Oak Crest Apartments Project), Series 2000A (the "Series 2000A Bonds") and its Subordinate Multifamily Housing Revenue Bonds (Elk River Estates and Oak Crest Apartments Project) Series 2000B (the "Series 2000B Bonds"). The Series 2000A Bonds and the Series 2000B Bonds are hereinafter collectively referred to as the "Bonds". The Bonds will be issued in substantially the forms set forth in the hereinafter-mentioned Indentures and Subordinate Loan Agreement. Pursuant to the Act, the City will loan the proceeds of the Bonds to the Company in order to refund the outstanding Multifamily Housing Revenue Bonds (Elk River Estates and Oak Crest Apartments Project), Series 2000 (the "Prior Bonds"). The Prior Bonds were issued to provide financing with respect to costs of the acquisition and renovation of an 18 unit housing facility (Elk Ridge Estates Facility) located at 11755 191 ~ Northwest Avenue in the City and a 54 unit housing facility (Oak Crest Apartments Facility) located at 300, 340 and 380 Third Street Northwest in the City (collectively, the "Project"). Forms of the following documents relating to the Bonds have been submitted to the City: (a) Loan Agreement (the "Loan Agreement") dated as of August 1, 2000 between the City and the Company; (b) Indenture of Trust (the "Indenture") dated as of August 1, 2000, between the City and U.S. Bank Trust National Association, as trustee (the "Trustee"); ~80830.1 2 (c) Subordinate Loan Agreement dated August 1, 2000 (the "Subordinate Loan Agreement") between the City and the Company; (d) Subordinate Indenture of Trust dated August 1, 2000 (the "Subordinate Indenture") between the Trustee and the City; (e) Assignment of Mortgage and Assignment of Leases and Rents dated August 1, 2000 (the "Assignment") from the City to the Trustee pursuant to which the City assigns a subordinate mortgage and assignment of leases and rents on the Project to the Trustee; (f) Bond Purchase Agreement (the "Bond Purchase Agreement"), by and between U.S. Bancorp Piper Jaffray Inc. (the "Underwriter"), the Company and the City, providing for the purchase of the Bonds from the City by the Underwriter and setting the terms and conditions of purchase; and (g) Official Statement relating to the Series 2000A Bonds and Limited Offering Memorandum relating to the Series 2000B Bonds. that: Findinqs. It is hereby found, determined and declared (a) There is no litigation pending or, to the actual knowledge of the City, threatened against the City questioning the City's execution or delivery of the Bonds, the Loan Agreement, the Subordinate Loan Agreement, the Assignment, the Bond Purchase Agreement, the Indenture or the Subordinate Indenture, questioning the due organization of the City, or the powers or authority of the City to issue the Bonds and undertake the transactions contemplated hereby. (b) The execution, delivery and performance of the City's obligations under the Bonds, the Indenture, the Subordinate Indenture, the Assignment, the Bond Purchase Agreement, the Loan Agreement, and the Subordinate Loan Agreement do not and will not violate any order against the City of any court or other agency of government, 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 Bonds shall not be payable from or a charge upon any funds of the City other than amounts payable pursuant to the Loan Agreement and the Subordinate Loan 1180830.1 3 Agreement and moneys in the funds and accounts held by the Trustee which are pledged to the payment thereof; the City shall not be subject to any liability thereon; no owners of the Bonds shall ever have the right to compel the exercise of the taxing power of the City to pay any of the Bonds or the interest thereon or to enforce payment thereof against any property of the City; the Bonds shall not constitute a general or moral obligation of the City or a charge, lien or encumbrance, legal or equitable, upon any property of the City (other than the interest of the City in the loan repayments to be made by the Company under the Loan Agreement and the Subordinate 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. 4. Approval and Execution of Documents. The forms of Loan Agreement, Indenture, Subordinate Loan Agreement, Subordinate Indenture, Assignment, and Bond Purchase Agreement are approved. The Bonds, Loan Agreement, Indenture, Subordinate Loan Agreement, Subordinate Indenture, Assignment, and Bond Purchase Agreement are authorized to be executed in the name and on behalf of the City by the Mayor and the City Administrator, or executed or attested by other officers of the City, in their discretion and at such time, if any, as such officers may deem appropriate, in substantially the form on file, but with such changes therein as may be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof. 5. Approval, Execution and Delivery of Bonds. The issuance of the Bonds is authorized, in an aggregate principal amount not to exceed $3,600,000, in the form and upon the terms set forth in the Indenture, the Subordinate Indenture and the Subordinate Loan Agreement, which terms are for this purpose incorporated in this resolution and made a part hereof; provided, however, that the initial aggregate principal amount of and the maturities of the Bonds, the interest rates thereon, and any provisions for the optional or mandatory redemption thereof shall all be as set forth in the final form of the Indenture, the Subordinate Indenture and the Subordinate Financing Agreement, to be approved, executed and delivered by the officers of the City authorized to do so by the provisions of this Resolution, which approval shall be conclusively evidenced by such execution and delivery; and provided further that, in no event, shall such maturities exceed 26 years or such rates of interest produce a net interest cost in excess of 9.75% for the Series 2000B Bonds. The Series 2000A Bonds bear interest at a variable rate. The Mayor, City Administrator and other City officers are authorized, in their discretion and at such time, if any, as they may deem appropriate, to execute the Bonds as prescribed in the Indenture, 1180830.1 4 together with a certified copy of this Resolution and such other city documents as may be reasonably required. 6. Official Statement and Limited Offering Memorandum. The City hereby consents to the circulation by the Underwriter of the Official Statement and Limited Offering Memorandum in offering the Bonds for sale; provided, however, that the City has not participated or been requested to participate in the preparation of the Official Statement and Limited Offering Memorandum or independently verified the information in the Official Statement and Limited Offering Memorandum and the City assumes no responsibility for, and makes no representations or warranties as to, the accuracy, sufficiency or completeness of such information. 7. Certificates, etc. The Mayor, City Administrator and other officers of the City may furnish to bond counsel and the purchaser of the Bonds, when issued, 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 appearing from the books and records of the City 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. 1180830.1 5 PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF ELK RIVER, MINNESOTA, THIS 10TH DAY OF JULY, 2000. MAYOR ATTEST: City Administrator 1180830.1 6 STATE OF MINNESOTA ) ) SS. COUNTY OF SHERBURNE ) I, the undersigned, being the duly qualified and acting City Clerk of the City of Elk River, Minnesota (the "City"), do hereby certify that attached hereto is a compared, true and correct copy of a resolution giving final approval to an issuance of revenue bonds by the City on behalf of West Suburban Housing Partners II Limited Partnership, duly adopted by the City Council of the City on July 10, 2000, at a regular meeting thereof duly called and held, as on file and of record in my office, which resolution has not been amended, modified or rescinded since the date thereof, and is in full force and effect as of the date hereof, and that the attached Extract of Minutes as to the adoption of such resolution is a true and accurate account of the proceedings taken in passage thereof. WITNESS My hand this day of , 2000. City Clerk 1180830.1