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4.10. SR 09-08-2015 Eclty1� ,.,�� Request for Action River To Item Number Mayor and City Council 4.10 Agenda Section Meeting Date Prepared by Consent September 8, 2015 Tim Simon, Finance Director Item Description Reviewed by Guardian Angles Health Services,Inc. Conduit Cal Portner, City Administrator Bond Financing Reviewed by Action Requested Adopt,by motion, a resolution authorizing and providing for the issuance and sale of Health Care Facilities Revenue Bonds in an aggregate principal amount of up to $4,000,000, at the request of Guardian Angles health Services,Inc., and approving forms of documents required in connection therewith. Background/Discussion On August 3, 2015, the City Council conducted a public hearing and approved the preliminary issuance of the revenue bonds. Guardian Angels made an application to the city to issue revenue bonds (conduit financing) in the amount up to $4,000,000 to renovation,improve, and equip the skilled nursing facility located at 400 Evans Avenue. Total project cost is estimated at$4.2 million. The project includes,but is not limited o the following: ■ Restroom additions ■ Increasing the number of private rooms ■ HVAC upgrades ■ Boiler replacements ■ Sun room of the main dining area ■ New nurses'work area ■ Redesigned dining area ■ New entry/vestibule ■ New nourishment area ■ Replace flooring,windows, roof City issuance of conduit bonds is a common financing mechanism to allow the use of the tax-exempt financing. Using the city's ability to issue conduit bonds, the applicant can sell tax-exempt bonds to save interest costs. Annually, municipalities are granted a bank-qualified exemption for issuance of up to $10 million in tax-exempt bonds. The city does not guarantee and is not liable for conduit bonds however they do count against the annual tax exemption. We don't anticipate any bond issues that would be applied against this exemption for 2015. All bond documents and resolutions were reviewed by our bond attorney. POWERED 6T Template Updoted 4/14 INAMIRE1 Financial Impact None, since all conduit bonds would not be secured by a general obligation pledge and the city/HRA/EDA are not responsible or liable for debt service payments. The applicant has paid the application fee and upon closing will complete the issuance fee. Attachments ■ Resolution N:APublic Bodies\Agenda Packets\09-08-2015\Final\x4.10 sr Guardian Angels conduit final.docx 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: RESOLUTION AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SALE OF HEALTH CARE FACILITIES REVENUE BONDS IN AN AGGREGATE PRINCIPAL AMOUNT OF UP TO $4,000,000, AT THE REQUEST OF GUARDIAN ANGELS HEALTH SERVICES, INC., AND APPROVING FORMS OF DOCUMENTS REQUIRED IN CONNECTION THEREWITH 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. City Clerk Resolution No. 15- RESOLUTION AUTHORIZING AND PROVIDING FOR THE ISSUANCE AND SALE OF HEALTH CARE FACILITIES REVENUE BONDS IN AN AGGREGATE PRINCIPAL AMOUNT OF UP TO $4,000,000, AT THE REQUEST OF GUARDIAN ANGELS HEALTH SERVICES, INC., AND APPROVING FORMS OF DOCUMENTS REQUIRED IN CONNECTION THEREWITH BE IT RESOLVED by the City Council of the City of Elk River, Minnesota(the "City" or the "Issuer"), as follows: 1. Authority. Pursuant to Minnesota Statutes, Sections 169.152 to 469.165 1, as amended (the "Act"), the Issuer is authorized to issue 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 for authorized projects, all as further provided in the Act. Such bonds are authorized to be secured by a pledge of the revenues to be derived from a loan or other revenue agreement, 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. The Bonds and the Project. Guardian Angels Health Services, Inc., a Minnesota nonprofit corporation (the "Borrower") has proposed to undertake a project consisting of the renovation and improvement of and the installation of equipment and furnishings in the Guardian Angels Care Center, located at 400 Evans Avenue in the City (the "Project"). The Borrower has further proposed that, in order to provide financing for Project, the Issuer issue and sell its Health Care Facilities Revenue Bonds (Guardian Angels Health Services, Inc. Project), Series 2015B, in one or more series, in an aggregate principal amount of not to exceed $4,000,000 (the "Bonds"), pursuant to the Act, and loan the proceeds thereof to the Borrower under terms and conditions requiring the Borrower to undertake and complete the Project, and to make loan repayments at times and in amounts sufficient to provide for payment of the Bonds in full, when due. 3. Documents Presented. Forms of the following documents relating to the Project and the issuance of the Bonds have been submitted to the Issuer and are now on file in the offices of the City Clerk: a. Loan Agreement (the "Loan Agreement") between the Issuer and the Borrower; and b. Trust Indenture (the "Indenture") of even date with the Loan Agreement, between the Issuer and U.S. Bank National Association, as trustee(the "Trustee"); and C. Bond Purchase Agreement (the "Bond Purchase Agreement"), by and between Northland Securities, Inc. (the "Underwriter"), the Borrower and the Issuer; and d. Preliminary Official Statement and form of final Official Statement, the form of the Preliminary Official Statement, together with the insertion of the final underwriting details of the Bonds, including the interest rates thereon, and any other changes deemed necessary or desirable, intended to constitute the form of the final Official Statement, and including all Appendices thereto (together the "Official Statement"), describing the offering of the Bonds, and certain terms and provisions of the foregoing documents. 4. Findings. It is hereby found, determined and declared that: a. Based upon information supplied by the Borrower, the Project will further the purposes contemplated by and described in Section 469.152 of the Act and will result in the encouragement and development of economically sound industry and commerce through governmental action for the purpose of preventing the emergence of blighted and marginal lands and areas of chronic unemployment, and would enhance the provision of health care services and facilities to members of the community. b. There is no litigation pending or, to the knowledge of the Issuer, threatened against the Issuer relating to the Project, the Bonds, or the Indenture, the Loan Agreement or the Bond Purchase Agreement (collectively referred to as the "Bond Documents") or questioning the organization, powers or authority of the Issuer to issue the Bonds or to execute or deliver any of the Bond Documents. C. The execution and delivery of and the performance of the Issuer's obligations under the Bonds and the Bond Documents do not and will not violate any order of any court or any agency of government or in any proceeding to which the Issuer is a party, or any indenture, agreement or other instrument to which the Issuer 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. d. The Loan Agreement provides for payments by the Borrower to the Issuer of such amounts as will be sufficient to pay the principal of, premium, if any, and interest on the Bonds when due. e. Under the provisions of the Act, the Bonds are not and shall not be payable from or charged upon any funds other than amounts payable pursuant to the Loan Agreement and related documents;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. 2 5. Approval and Execution of Documents. The forms of Indenture, Loan Agreement and Bond Purchase Agreement, referred to in paragraph 4, are approved. Officers of the Issuer, as identified in paragraph 10 below, shall execute and deliver the Bond Purchase Agreement, the Indenture and the Loan Agreement, substantially in the forms on file, but with all such changes therein as may be approved by the officers executing the same, which approval shall conclusively be evidenced by the execution thereof. Each of such documents shall be executed and delivered in the name and on behalf of the Issuer by the officers identified in paragraph 10. 6. Approval, Execution and Delivery of the Bonds. The officers of the Issuer are hereby authorized and directed to execute and issue the Bonds, and the Bonds shall be issued in such series and shall be substantially in such forms, mature, bear interest, and be payable according to such terms and shall otherwise contain such terms and provisions as are set forth in the Indenture, which terms are for this purpose incorporated in this Resolution and made a part hereof,provided, however, that the aggregate principal amount of the Bonds, the interest rates thereon, the amount and dates of the principal payments required to be made with respect thereto, and the rights of optional and mandatory redemption with respect thereto shall all be set forth in the Indenture as executed and shall all be subject to the final approval of the officers of the Issuer who execute and deliver the Indenture in accordance with the provisions of this Resolution, such approval to be conclusively evidenced by the execution thereof,provided further, however, that, in no event shall the aggregate principal amount of the Bonds exceed $4,000,000, shall the final maturity of the Bonds be in excess of 30 years from the date of issuance thereof, nor shall the net interest cost with respect to the Bonds exceed 6.00%per annum. Each of the Bonds shall recite that it is issued pursuant to the Act and such recital shall, to the fullest extent permitted by law, conclusively establish the legality and validity thereof. The Bonds shall be sold to the Underwriter in accordance with and upon the terms and conditions set forth in the Bond Purchase Agreement. The proposal of the Underwriter to purchase the Bonds, as further provided in the Bond Purchase Agreement, at the purchase price set forth therein, is hereby accepted. 7. Certificates, etc. The officers and employees of the Issuer are authorized to prepare and furnish to Dorsey & Whitney LLP, Minneapolis, Minnesota, Bond Counsel to the Underwriter, and to the Underwriter, certified copies of all proceedings and records of the Issuer relating to the Bonds, 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 any heretofore furnished, shall constitute representations of the Issuer as to the truth of all statements of fact contained therein. 8. Official Statement. The Issuer hereby consents to the circulation by the Underwriter of the Official Statement, substantially in the form now on file, in offering the Bonds for sale;provided, however, that the Issuer has not participated in the preparation of the Official Statement or independently verified the information in the Official Statement and takes no responsibility for, and makes no representations or warranties as to, the accuracy or completeness of such information. 3 9. Nature of Issuer's Obligations. All covenants, stipulations, obligations, representations, and agreements of the Issuer contained in this Resolution or contained in the aforementioned documents shall be deemed to be the covenants, stipulations, obligations, representations, and agreements of the Issuer to the full extent authorized or permitted by law, and all such covenants, stipulations, obligations, representations, and agreements shall be binding upon the Issuer. Except as otherwise provided in this Resolution, all rights, powers, and privileges conferred, and duties and liabilities imposed upon the Issuer by the provisions of this Resolution or of the aforementioned documents shall be exercised or performed by such officers or agents as may be required or authorized by law to exercise such powers and to perform such duties. No covenant, stipulation, obligation, representation, or agreement herein contained or contained in the documents referred to above shall be deemed to be a covenant, stipulation, obligation, representation, or agreement of any member of the City Council, or any officer, agent, or employee of the Issuer in that person's individual capacity, and neither shall any member of the City Council nor any officer or employee executing the Bonds or such documents be liable personally on the Bonds or be subject to any representation, personal liability or accountability by reason of the issuance thereof. No provision, representation, covenant or agreement contained in the Bonds, this Resolution or in any other document related to the Bonds, and no obligation therein or herein imposed upon the Issuer or the breach thereof, shall constitute or give rise to a general or moral obligation, or indebtedness or pecuniary liability of the Issuer or any charge upon its general credit or taxing powers. In making the agreements, provisions, covenants and representations set forth in the Bonds or in any other document related to the Bonds, the Issuer has not obligated to pay or remit any funds or revenues, except for revenues derived from the Loan Agreement that are pledged to the payment of the Bonds. 10. Authorized Officers. The Bonds and the documents referred to herein are authorized to be executed on behalf of the Issuer by either the Mayor and the City Clerk; provided, however, that in the event that either the Mayor or the City Clerk shall be unavailable or for any reason be unable to execute the Bonds or any other document to be entered into by the Issuer in connection therewith, any other officer of the Issuer is hereby authorized to act in that capacity and undertake such execution or acts on behalf of the Issuer. 11. 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 as "qualified tax-exempt obligations,"within the meaning of Section 265(b)(3) of the Code. 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 heretofore issued by the City in calendar year 2015, will be in an aggregate amount exceeding $10,000,000 in the current calendar year. 12. Definitions and Interpretation. Terms not otherwise defined in this Resolution but defined in the form of Loan Agreement or Indenture now on file shall have the same meanings in this Resolution and shall be interpreted herein as provided therein. Notices may be given as provided in the Loan Agreement. In case any provision of this Resolution is for any reason illegal or invalid or inoperable, such illegality or invalidity or inoperability shall not affect the 4 remaining provisions of this Resolution, which shall be construed or enforced as if such illegal or invalid or inoperable provision were not contained herein. Adopted by the City Council of the City of Elle River this day of September, 2015. Mayor Attest: City Clerk 4838-0444-8294\3 5