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7.1. SR 12-18-2017 Eclty1� ,.,�� Request for Action River To Item Number Mayor and City Council 7.1 Agenda Section Meeting Date Prepared by Public Hearin s December 18, 2017 Lori Ziemer, Finance Director Item Description Reviewed by Resolution Consenting to the Issuance of Cal Portner, City Administrator Refunding Revenue Bonds (Evans Park,Inc. Reviewed by Projects Action Requested Adopt,by motion, a resolution consenting to the issuance of refunding revenue bonds by the City of Otsego for the refunding of outstanding revenue bonds issued by the City of Elk River. Background/Discussion In 2011, the City of Elk River authorized the issuance of conduit revenue bonds in an amount of $3,600,000 for the Evans Park Inc. Project to provide financing for the 30-unit memory care addition to Guardian Angels by the Lake. Evans Park,Inc. has requested the City of Otsego to authorize and provide for the issuance and sale of conduit refunding revenue bonds. The requested financing would be used to refund the outstanding conduit revenue bonds originally issued through the cities of Otsego,Albertville, and Elk River. The refinancing requires that the City of Elk River grant consent to the issuance of the conduit refunding revenue bonds by the City of Otsego. The cities of Otsego and Albertville have consented to the issuance of the conduit refunding revenue bonds by the City of Otsego. Financial Impact There is no financial impact or obligation to the City of Elk River. Attachments ■ Resolution consenting to the issuance of refunding revenue bonds by the City of Otsego ■ Agreement The Elk River Vision A PehoMing community 2a itb revolutionary and spirited resourcefulness, exceptional POWERED By service, and community engagement that encourages and inspires prosperity INAWRE1 City of Elk River Resolution No. 17- Resolution Consenting to the Issuance of Refunding Revenue Bonds Under Minnesota Statutes, Chapter 462c, by the City of Otsego, for the Refunding of Outstanding Revenue Bonds Issued by the City of Elk River and the City of Albertville BE IT RESOLVED by the City Council of the City of Elle River, Minnesota(the "City"), as follows: 1. Authority and Bond Refunding. Pursuant to Minnesota Statutes, Chapter 462C, as amended (the "Act"), the City issued its Revenue Bonds (Evans Park, Inc. Project), Series 2011, in the original aggregate principal amount of$3,600,000 (Series "2011 Bonds"), and loaned the proceeds thereof(the "Loan") to Evans Park, Inc., a Minnesota nonprofit corporation (the "Borrower"), to provide financing for the following facility, including related site improvements, equipment and furnishings (the "Facilities"): a 30-unit memory care addition to the Borrower's then-existing senior assisted-living development known as "Guardian Angels by the Lake," located at 13439 185th Lane NW, in the City of Elle River. The Borrower has proposed that the Series 2011 Bonds be refunded in full in order to provide refinancing for the Facilities, and has further proposed that: (i) the outstanding Refunding Revenue Bonds (Evans Park, Inc. Project), Series 2013, issued by the City of Albertville (the "Series 2013 Albertville Bonds"), with the consent of the City of Elle River, also be refunded in full to provide refinancing for the Borrower's original 60-unit facility known as "Guardian Angels by the Lake" and its 36-unit rental independent senior housing facility known as "Evans Park;" and (ii) the outstanding Revenue Bonds (Evans Park, Inc. Project), Series 2013, issued by the City of Otsego, Minnesota, in the original principal amount of$10,000,000 (the "Series 2013 Otsego Bonds"), also be refunded in full to provide refinancing for the Borrower's Engel Haus facility, a 63-unit independent, assisted living and memory care facility for rental to seniors, located at 5101 Kassel Avenue NE, in the City of Albertville. The Borrower has further proposed that refunding revenue bonds (the "Refunding Bonds"), in one or more series, be issued therefor by the City of Otsego (the "Issuer"), to refund in full the Series 2011 Bonds, the Series 2013 Otsego Bonds and the Series 2013 Albertville Bonds (all collectively referred to as the "Refunded Bonds"), in accordance with the Act, including Section 462C.14, Subd. 3, thereof, and Minnesota Statutes, Section 471.59 (sometimes referred to as the "Refunding"), subject, among other things, to the consent of the City of Elle River confirming the necessity of the joint action proposed to be taken. The Borrower has further proposed that the City, the Issuer and the City of Albertville enter into a Cooperative Agreement providing for the issuance of the Refunding Bonds by the Issuer. The proposed form of the Cooperative Agreement has been placed on file in the offices of the City. 2. Findings. It is hereby found, determined and declared that: a. The Refunding will further the purposes and policies of the Act and promote the public welfare of the City and its residents. b. There is no litigation pending or, to the knowledge of the City, threatened against the City relating to the Project Facilities, the Refunded Bonds or the Refunding, or questioning the organization, powers or authority of the City to authorize the issuance of the Refunding Bonds by the Issuer. C. Under the provisions of the Act, the Refunding 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 or similar agreement with the Issuer;the City will not be subject to any liability thereon;no owner of the Refunding Bonds shall ever have the right to compel the exercise of the taxing power of the City to pay the Refunding Bonds or the interest thereon, nor to enforce payment thereof against any property of the City; 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 City; and the Bonds shall not constitute or give rise to a charge against the general credit or taxing powers of the City. d. Within the meaning of Section 462C.14, Subd. 3, of the Act, the City hereby confirms the necessity of the joint actions being taken pursuant hereto by the City of Elk River, the City of Otsego and the City of Albertville, in order to successfully effectuate the refunding of the Series 2011 Bonds, the Series 2013 Albertville Bonds and the Series 2013 Otsego Bonds. 3. Public Hearing. A public hearing was held by the City Council of the City (the "Public Hearing"), with respect to the issuance of the Refunding Bonds in an aggregate principal amount not to exceed $17,500,000. The Public Hearing was called and held as required by the Act and the provisions of section 147(f) of the Code and regulations thereunder. At the Public Hearing all persons present were afforded an opportunity to express their views with respect to the issuance of the Refunding Bonds. 4. Approval of Refunding and Cooperative Agreement. Approval is hereby given to: (a) the issuance of the Refunding Bonds by the City of Otsego, in an aggregate principal amount not to exceed $17,500,000, (b) the execution and delivery by one or more officers of the City of the Cooperative Agreement, substantially in the form currently on file in the offices of the City, together with such modifications thereto as are approved by the officer or officers of the City authorized to execute the same, which approval shall be conclusively evidenced by such execution thereof. None of the Bonds shall constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, or a pledge of or charge against the City's general credit or taxing powers. All costs of the City relating to the issuance of the Refunding Bonds, whether or not the Refunding Bonds are successfully issued, shall be paid or reimbursed by the Borrower. 2 The City hereby authorizes, ratifies and confirms the authority of the Borrower and other parties to undertake preparation of such documents as may be necessary or desirable in connection with the Refunding, the issuance of the Refunding Bonds and the redemption of the Series 2011 Bonds, including such notices, loan agreements, trust indentures, and further legal and disclosure documents as the Borrower may determine to be necessary or desirable. [The balance of this page intentionally left blank] Adopted by the City Council of the City of Elk River this 18th day of December, 2017. John J. Dietz, Mayor Attest: Tina Allard, City Clerk 4846-7806-7544\1 3 AGREEMENT 2017-36 COOPERATIVE AGREEMENT THIS COOPERATIVE AGREEMENT, dated as of December 1, 2017 (the "Cooperative Agreement"), is made and entered into by and between the CITY OF ALBERTVILLE, MINNESOTA ("Albertville"), the CITY OF ELK RIVER, MINNESOTA ("Elk River," and, together with Albertville, individually or together referred to a"Host City" or the "Host Cities") and the CITY OF OTSEGO, MINNESOTA (the "Issuer"). RECITALS WHEREAS, Evans Park, Inc., a Minnesota nonprofit corporation (the "Borrower"), has proposed that the Issuer issue its Refunding Revenue Bonds (Evans Park, Inc. Projects), Series 2017A, Series 2017B and Series 2017C (the "Series 2017 Bonds"), in the original aggregate principal amount of not to exceed $17,500,000, to refinance the Borrower's senior housing facilities described generally as follows (referred to collectively as the "Project Facilities"): (i) Engel Haus, a 63-unit independent, assisted living and memory care facility for rental to seniors, located at 5101 Kassel Avenue NE, in the City of Albertville, (ii) Guardian Angels by the Lake, an assisted living and memory care facility for rental to seniors that includes 60 units assisted living and 30 units of memory care accommodations, located at 13439 185th Lane NW, in the City of Elk River, and (iii) Evans Park, a 36-unit rental housing facility for independent seniors, located at 300 Evans Avenue NW, in the City of Elk River. WHEREAS, the refinancing will be effected through the refunding, redemption and prepayment of the outstanding revenue bonds consisting of. (i) the Revenue Bonds (Evans Park, Inc. Project), Series 2013, issued by the City of Otsego, Minnesota, in the original principal amount of$10,000,000; (ii) the Refunding Revenue Bonds (Evans Park, Inc. Project), Series 2013, issued by the City Albertville, Minnesota, in the original principal amount of $5,165,000; and (iii) the Revenue Bonds (Evans Park, Inc. Project), Series 2011, issued by the City of Elk River, Minnesota, in the original principal amount of$3,600,000 (all such outstanding bonds referred to collectively as the "Refunded Bonds"). The proceeds of the Series 2017 Bonds will be applied to: (i) the refunding, redemption and prepayment in whole of the Refunded Bonds; (ii) the funding of required reserves; and (iii) the payment of costs of issuance of the Series 2017 Bonds (all collectively referred to as the "Refunding"). WHEREAS, pursuant to Minnesota Statutes, Section 471.656, as amended, a municipality may issue obligations to provide financing for property located outside of the corporate boundaries of such municipality if the issuance of such obligations is consented to by each of corresponding municipality within which such property is located or if the obligations are issued under a joint powers agreement in which one or more of the parties to the joint powers agreement issue such obligations and the property is located entirely within the boundaries of one or more of the parties to the joint powers agreement. WHEREAS, pursuant to Minnesota Statutes, Section 471.59, as amended, by the terms of an agreement entered into through action of their governing bodies, two or more municipalities may jointly or cooperatively exercise any power common to the contracting parties or any similar powers, including those which are the same except for the territorial limits within which they may be exercised, and the joint powers agreement may provide for the exercise of such powers by one or more of the participating municipalities on behalf of the other participating municipalities. WHEREAS, the Host Cities and the Issuer are authorized by Minnesota Statutes, Chapter 462C, as amended (the "Housing Act"), to carry out the public purposes described in the Housing Act by providing for the issuance of revenue bonds to finance or refinance multifamily housing developments, as described therein, and to act jointly in connection therewith, all in accordance with Section 462C.14, Subd. 3, of the Act. WHEREAS, the Host Cities and the Issuer are proposing to enter into this Cooperative Agreement whereby the Host Cities will consent to the issuance of the Bonds by the Issuer for the purposes of refunding the Refunded Bonds and thereby providing refinancing for the Project Facilities, and the Issuer will agree to issue the Bonds to finance the Project. WHEREAS, the Bonds proposed to be issued by the Issuer for the benefit of the Borrower shall not constitute general or moral obligations of, or pledge the full faith and credit or taxing powers of, the Host Cities, the Issuer, the State of Minnesota(the "State"), or any other agency or political subdivision thereof, but shall be payable solely from the revenues pledged and assigned thereto pursuant to one or more agreements between the Borrower and the Issuer. WHEREAS, the governing bodies of the Host Cities and the Issuer have each authorized the execution and delivery of this Cooperative Agreement. NOW, THEREFORE, the Host Cities and the Issuer hereby agree as follows: 1. The governing bodies of the Host Cities and the Issuer have each conducted a public hearing with respect to the Refunding, noticed and held in accordance with the requirements of section 147(f) of the Internal Revenue Code of 1986, as amended. 2. The governing bodies of the Host Cities and the Issuer have each adopted a resolution approving this Cooperative Agreement and authorizing its execution and delivery (the "Host Cities' Resolutions"). 3. The Host Cities hereby consent to and approve the issuance of the Bonds by the Issuer for the purposes stated herein. 4. The Issuer will issue the Series 2017 Bonds in the original aggregate principal amount of not to exceed $17,500,000 and the proceeds of the Series 2017 Bonds will be applied to: (i) the refunding and redemption in full of the outstanding Refunded Bonds, (ii) the funding of required reserves, and (iii) the payment of costs of issuance of the Series 2017 Bonds. 5. No litigation is pending or threatened against the Host Cities, to the knowledge of the Host Cities, (i) seeking to restrain or enjoin the resolutions adopted by the City Councils of the Host Cities approving this Cooperative Agreement (the "Host Cities Resolutions") or the execution and delivery of this Cooperative Agreement; or(ii) in any way contesting or affecting the existence of the powers of the Host Cities to enter into this Agreement. 2 6. The representations, warranties, and agreements of the Host Cities contained in the Host Cities' Resolutions and this Cooperative Agreement are true and correct in all material respects as of the date hereof. 7. Except to the extent specifically provided herein, the Host Cities and the Issuer shall not incur any obligations or liabilities to each other as a result of the issuance of the Bonds. The Bonds shall be special, limited obligations of the Issuer, payable solely from proceeds, revenues, and other amounts specifically pledged to the payment of the Bonds. The Bonds and the interest thereon shall not constitute or give rise to a pecuniary liability, general or moral obligation, or a pledge of the full faith and credit or taxing powers of the Host Cities, the Issuer, the State of Minnesota, or any other political subdivision of the State of Minnesota, within the meaning of any constitutional or statutory provisions. 8. All costs incurred by the Host Cities and the Issuer in the authorization, execution, delivery, and performance of this Cooperative Agreement and all related transactions shall be paid by the Borrower. 9. This Cooperative Agreement may not be terminated by any party so long as any Series 2017 Bonds are outstanding. 10. This Cooperative Agreement may be amended by the Host Cities and the Issuer at any time. No amendment may impair the rights of the Borrower or the owners of the Series 2017 Bonds. 11. This Cooperative Agreement may be executed in several counterparts, each of which shall be regarded as an original and all of which shall constitute but one and the same agreement. (The remainder of this page is intentionally left blank.) 3 IN WITNESS WHEREOF, duly authorized officers of the Host Cities and the Issuer have executed this Cooperative Agreement as of the date and year first written above. CITY OF ALBERTVILLE, MINNESOTA, as Host City By Its Mayor By Its City Administrator [Signature page to Cooperative Agreement by and between the City of Albertville, Minnesota, the City of Elle River, Minnesota, and the City of Otsego, Minnesota] S-1 CITY OF ELK RIVER, MINNESOTA, as Host City By Its Mayor By Its City Administrator [Signature page to Cooperative Agreement by and between the City of Albertville, Minnesota, the City of Elle River, Minnesota, and the City of Otsego, Minnesota] S-2 Execution page of the Issuer to the Cooperative Agreement, dated as of the date and year first written above. CITY OF OTSEGO, MINNESOTA, as Issuer By Its Mayor By Its City Administrator/Finance Director [Signature page to Cooperative Agreement by and between the City of Albertville, Minnesota, the City of Elle River, Minnesota, and the City of Otsego, Minnesota] 4847-9753-3014\2 S-3