RES 17-46Extract of Minutes of a 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 in the City Hall in said City on Monday, August 21, 2017, commencing
at 6:00 P.M.
The following members were present: Councilmembers Olsen, Ovall, and Wagner
and the following were absent: Mayor Dietz and Councilmember Westgaard
Member Wagner introduced the following resolution and moved its adoption:
Resolution No. 17- 46
Resolution Giving Host Approval and Consenting to the Issuance by the
City of Bethel of Charter School Lease Revenue Bonds (Spectrum
Building Company) Under Minnesota Statutes, Sections 469.152-469.1655
The motion for the adoption of the foregoing resolution was duly seconded by member
Ovall and after full discussion thereof and upon vote being taken thereon, the following
voted in favor thereof
Councilmembers Olsen, Ovall, and Wagner
and the following voted against the same:
None
whereupon said resolution was declared duly passed and adopted.
BE IT RESOLVED, by the City Council (the "Council") of the City of Elk River,
Minnesota (the "City") as follows:
Section 1. General Recitals. The City is a municipality, statutory city, and political
subdivision duly organized and existing under the laws of the State of Minnesota. Under the
Constitution and laws of the State of Minnesota, particularly Minnesota Statutes, Sections 469.152-
469.1655, as amended (the "Act"), a municipality is authorized to issue revenue bonds to finance or
refinance any properties, real or personal, used or useful in connection with a revenue producing
enterprise engaged in any business. Under the provisions of the Act, a municipality may enter into
an agreement whereby one municipality issues its revenue bonds in behalf of one or more other
municipalities. Also, under Minnesota Statutes, Section 471.656, as amended, a municipality may
issue obligations to finance or refinance the acquisition or improvement of real property located
outside of the corporate boundaries of such municipality if the governing body of the municipality
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in which the real property is located consents by resolution to the issuance of such obligations by
the other municipality.
Section 2. Description of the Project.
(a) Under the terms of Resolution No. 2012-123 adopted by the Board of Commissioners
of Anoka County, a county and political subdivision of the State of Minnesota (the "Prior Issuer"),
on August 28, 2012, and under the provisions of an Indenture of Trust, dated as of December 1,
2012 (the "Prior Indenture"), between the Prior Issuer and Wells Fargo Bank, National Association
(the "Prior Trustee"), the Prior Issuer issued its: (i) Charter School Lease Revenue Bonds (Spectrum
Building Company), Series 2012A (the "Series 2012A Bonds', in the original aggregate principal
amount of $11,095,000; and (ii) Taxable Charter School Lease Revenue Bonds (Spectrum Building
Company), Series 2012B (the "Series 2006B Bonds"), in the original aggregate principal amount of
$205,000 (the Series 2012A Bonds and the Series 2012B Bonds are hereinafter referred to
collectively as the "Series 2012 Bonds'. The proceeds of the Series 2012 Bonds were loaned to
Spectrum Building Company, a Minnesota nonprofit corporation (the "Company"), and were
applied by the Company to finance the acquisition and equipping of an existing school facility
located at 17796 Industrial Circle Northwest in the City of Elk River of approximately 60,000 square
feet and approximately 37 acres for athletic fields located at 10189 181st Avenue NW in the City of
Elk River (the "Series 2012 Project").
(b) Under the terms of Resolution No. 2014-43 adopted by the Board of Commissioners of
the Prior Issuer on April 22, 2014, and under the provisions of the Prior Indenture and a First
Supplemental Indenture of Trust, dated as of June 1, 2014 (the "First Supplemental Indenture"),
between the Prior Issuer and the Prior Trustee, the Prior Issuer issued its: (i) Charter School Lease
Revenue Bonds (Spectrum Building Company) Series 2014A, in the original aggregate principal
amount of $3,880,000; and (ii) Charter School Lease Revenue Bonds (Spectrum Building Company)
Series 2014B, in the original aggregate principal amount of $205,000 (the Series 2014A Bonds and
the Series 2014B Bonds are hereinafter referred to collectively as the "Series 2014 Bonds"). The
proceeds of the Series 2014 Bonds were loaned to the Company and were applied by the Company
to fmance the acquisition, renovation, and equipping of certain units within a common interest
condominium complex located at 11044 Industrial Circle NW in the City of Elk River for use as a
sixth grade educational center and gymnasium (the "Series 2014 Project").
(c) The Company has requested that the City of Bethel, Minnesota (the "City of Bethel")
issue revenue obligations, in one or more series, as taxable or tax-exempt obligations (the "Bonds"),
in an aggregate principal amount not to exceed $27,500,000, for the purposes of, among other
things: (i) defeasing, redeeming, and prepaying the outstanding Series 2012 Bonds; (ii) defeasing,
redeeming, and prepaying the outstanding Series 2014 Bonds; (iii) financing the acquisition of
ten (10) acres of undeveloped land located north of 181st Avenue NW in the City of Elk River
adjacent to the existing athletic fields of the Company and the acquisition of four (4) acres of land at
17823 Industrial Circle NW in the City of Elk River on which an existing building is located and the
renovation of the existing building and the addition of a gymnasium and field for use as a school
building for 7th and 8th grade students (the "Series 2017 Project"); (iv) funding a debt service
reserve fund to secure the timely payment of the Bonds; (v) paying a portion of the interest on the
Bonds; and (vi) paying a portion of the costs of issuing the Bonds.
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(d) The Series 2012 Project, the Series 2014 Project, and the Series 2017 Project
(collectively, the "Project") will be owned by the Company and leased to and operated by Spectrum
High School, a Minnesota nonprofit corporation (the "School"), as a public charter school.
(e) The City has been advised that the Bonds or other obligations, as and when issued will
not constitute a charge, lien, or encumbrance upon any property of the City or the City of Bethel,
except the Project and the revenues derived from the Project. Such Bonds or obligations shall not
be a charge against the general credit or taxing powers of the City or the City of Bethel, but are
payable solely from revenues of the Company or security provided by the Company.
Section 3. Representations Made by the Company
(a) The Company has agreed to pay any and all costs incurred by the City in connection with
the issuance of the Bonds, whether or not such issuance is carried to completion.
(b) The Company has represented to the City that no public official of the City has either a
direct or indirect financial interest in the Project or the Bonds, not will any public official of the City
either directly or indirectly benefit financially from the Project or the issuance of the Bonds.
Section 4. Public Hearing
(a) As required by Section 147(f) of the Internal Revenue Code of 1986, as amended (the
"Code"), a Notice of Public Hearing was published in the official newspaper of the City and a
newspaper of general circulation in the City (the Star News) with respect to a public hearing on the
proposed issuance of the Bonds and the financing and refinancing of the Project.
(b) As required by Section 147(f) of the Code, the City Council of the City has on this date
held a public hearing on the issuance of the Bonds by the City of Bethel and on the financing and
refinancing of the Project with the proceeds of the Bonds. At the public hearing all persons
appearing who desired to speak were heard and any written comments were accepted.
Section 5. Host Approval. The City Council of the City hereby consents to the issuance of
the Bonds by the City of Bethel and grants host approval with respect to the issuance of the Bonds
by the City of Bethel and the financing and refinancing of the Project.
Section 6. Approval of PILOF Payments. In connection with the approval granted herein
to the issuance of the Bonds, and the anticipated exemption of the Project from property taxes due
to the ownership of the Project by the Company and use of the Project by the School as a public
charter school, the City Council hereby accepts, as a condition to the consent and approval granted
by this Resolution, payment of a fee to the City upon a determination that the property on which the
Series 2017 Project is to be located is exempt from real estate taxation. The terms and conditions
for payment of such fee are set forth in an Agreement for Payment in Lieu of Fees to be executed by the
Company and the City (the "PILOF Agreement") in the form now on file with the City. The
PILOF Agreement is hereby approved in the form now on file with the City, together with such
additional details therein as may be necessary and appropriate and such modifications thereof,
deletions therefrom, and additions thereto as may be necessary and appropriate and approved by the
City's bond counsel prior to the execution of the PILOF Agreement, and the Mayor and the City
Clerk of the City are authorized to execute the PILOF Agreement in the name of and on behalf of
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the City and such other documents and certificates as the City's bond counsel considers appropriate
in connection with the issuance of the Bonds. In the event of the absence or disability of the Mayor
or the City Clerk, such officers of the City as, in the opinion of the City Attorney, may act on their
behalf, shall without further act or authorization of the City Council do all things and execute all
instruments and documents required to be done or executed by such absent or disabled officers.
The execution and delivery of the PILOF Agreement and such other documents and certificates by
the City shall be conclusive evidence of the approval of such documents and certificates in
accordance with the terms hereof.
Section 7. Certified Proceedings. The Council members, officers, employees, and agents of
the City are hereby authorized and directed to prepare and furnish to bond counsel and the original
purchaser of the Bonds certified copies of all proceedings and records of the City relating to the
approval of the issuance of the Bonds, including a certification of this resolution.
✓1
J J. Di tz, May
ATTEST:
LCII
Tina Allard, City Clerk
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