RES 05-021
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RESOLUTION NO. 05-21
RESOLUTION GIVING PRELIMINARY APPROV AL TO A PROJECT
PURSUANT TO MINNESOTA STATUTES, SECTION 469.154,
AND AUTHORIZING THE SUBMISSION OF AN APPLICATION TO THE
MINNESOT A DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT
AND THE PREPARATION OF NECESSARY DOCUMENTS
(ST. ANDREW SCHOOL PROJECT)
WHEREAS,
(a) The purpose of Minnesota Statutes, Sections 469.152 to 469.165 relating to
municipal industrial development (the "Act") as found and determined by the legislature is to
promote the welfare of the state by the active attraction and encouragement and development of
economically sound industry and commerce to prevent so far as possible the emergence of
blighted and marginal lands and areas of chronic unemployment;
(b) Factors necessitating the active promotion and development of economically
sound industry and commerce are the increasing concentration of population in the metropolitan
areas and the rapidly rising increase in the amount and cost of governmental services required to
meet the needs of the increased population and the need for development of land use which will
provide an adequate tax. base to finance these increased costs and access to employment
opportunities for such population;
(c) The City Council of the City of ElkRiver (the "City") received a proposal
from The Church of St. Andrew, a nonprofit religious corporation (the "Borrower") that the City
undertake to finance a Project hereinafter described, through the issuance of revenue bonds
(hereinafter the "Bonds" or the" Revenue Bonds") pursuant to the Act;
(d) The City desires to facilitate the selective development of the. community and
surrounding area, retain and improve the tax base in the City, and help to provide the range of
services and employment opportunities required by the population; and the Project will assist the
City in achieving those objectives. The Project will help to increase assessed valuation in the
City and help maintain a positive relationship between assessed valuation and debt and enhance
the image and reputation of the community;
(e) The Project to be financed by the Bonds is (i) renovation, and constructing
additions to, the St. Andrew School located at 428 Irving Avenue in the City and (ii) the
acquisition and installation of equipment therein (the "Project"). The Project is expected to
create 1.4 additional new full-time equivalent jobs in addition to the existing twenty-'six (26)
jobs;
(f) The City has been advised by representatives of Borrower that conventional,
commercial financing to pay the capital cost of the Project is available only on a limited basis
and at such high costs of borrowing that the economic feasibility of operating the Project would
be significantly reduced;
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(g) No public official of the City has either a direct or indirect financial interest
in the Project nor will any public official either directly or indirectly benefit financially from the
Proj ect;
(h) A second public hearing on the Project was held on March 21, 2005, pursuant
to published notice as required by the Act and Section 147(f) of the Internal Revenue Code of
1986, as amended.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk River,
Minnesota, as follows:
1. The Council hereby indicates its preliminary intent to undertake the Project, and
additional financing therefore, pursuant to the Act, and pursuant to a revenue agreement between
the City and Borrower upon such terms and conditions with provisions for revision from time to
time as necessary, so as to produce income and revenues sufficient to pay, when due, the
principal of and interest on the Bonds in the total principal amount of up to approximately
$2,500,000 to be issued pursuant to the Act to finance or refinance a portion of the costs of the
construction and installation of the Project.
2. On the basis of information available to this Council it appears, and the Council
hereby finds, that the Project constitutes properties, real and personal, used or useful in
connection with one or more revenue producing enterprises within the meaning of Subdivision
2(b) of Section 469;153 of the Act; that the Project furthers the purposes stated in Section
469.152; that the availability of the financing under the Act and willingness of the City to furnish
such financing will be a substantial inducement to Borrower to undertake the Project, and that
the effect of the Project, if undertaken, will be to encourage the development of economically
sound industry and commerce, to assist in the prevention of the emergence of blighted and
marginal land, to help prevent chronic unemployment, to help the surrounding area retain and
improve the tax base and to provide the range of service and employment opportunities required
by the population, to help prevent the movement of talented and educated persons.out of the state
and to areas within the State where their services may not be as effectively used, to promote
more intensive development and use of land within the City and surrounding communities and
eventually to increase the tax base of the community.
3. The Project is hereby given preliminary approval by the City subject to final
approval by this Council, Borrower, and the purchaser of the Bonds as to the ultimate details of
the financing of the Project.
4. The Mayor and staff of the City are hereby authorized and directed to submit an
application for approval of a bond project to the Minnesota Department of Employment and
Economic Development for the Project.
5. The Borrower has agreed and it is hereby determined that any and all costs
incurred by the City in connection with the financing of the Project, including legal fees, whether
or not the Project is carried to completion; will be paid by the Borrower.
6. Briggs and Morgan, Professional Association, acting as bond counsel, is
authorized to assist in the preparation and review of necessary documents relating to the Project,
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to consult with the City Attorney, the Borrower and the purchaser of the Bonds as to the
maturities, interest rates and other terms and provisions of the Bonds and as to the covenants and
other provisions of the necessary documents and to submit such documents to the Council for
final approval.
7. Nothing in this resolution or in the documents prepared pursuant hereto shall
authorize the expenditure of any municipal funds on the Project other than the revenues derived
from the Project or otherwise granted to the City for this purpose. The Bonds shall not constitute
a charge, lien or encumbrance, legal or equitable, upon any property or funds of the City except
the revenue and proceeds pledged to the payment thereof, nor shall the City be subject to any
liability thereon. The holder of the Bonds shall never have the right to compel any exercise of
the taxing power of the City to pay the outstanding principal on the Bonds or the interest thereon,
or to enforce payment thereof against any property of the City. The Bonds shall recite in
substance that the Bonds including interest thereon, are payable solely from the revenue and
proceeds pledged to the payment thereof. The Bonds shall not constitute a debt of the City
within the meaning of any constitutional or statutory limitation.
8. In anticipation of the issuance of the Bonds to finance a portion of the Project, and
in order that completion of the Project will not be unduly delayed when approved, Borrower is
hereby authorized to make such expenditures and advances toward payment of that portion of the
costs of the Project as Borrower considers necessary, including the use of interim, short-term
financing, subject to reimbursement from the proceeds of the Bonds if and when delivered but
otherwise without liability on the part of the City.
9. 'This resolution shall take effect immediately upon adoption.
Adopted by the City Council of the City of Elk River, Minnesota, this 21 st day of March, 2005.
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Attest:
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