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4.1. SR 09-10-2001Item ~ 4.1. MEMORANDUM TO: FROM: DATE: Mayor and City Council Lori Johnson, Finance Director September I 0, 2001 SUBJECT: Public Hearing and Resolution Authorizing Execution and Delivery of the Joint Powers Agreement with the Hennepin County Housing and Redevelopment Authority to Finance a Project for Opportunity Partners Opportunity Partners, a non-profit corporation, owns two group treatment facilities in Elk River along with facilities in Hennepin County. Opportunity Parmers has been working with the Hennepin County Housing and Redevelopment Authority (HCHRA) to refinance and prepay outstanding mortgage loans on its facilities. Because two of the facilities are located in Elk River, the city must hold a public hearing and approve the proposed financing by the HCHRA. Although I have not had contact from representatives of Opportunity Parmers or the HCHRA regarding this project, I understand that representatives will be at Monday's meeting to provide the Council additonal information and answer any questions you may have. I have been working solely with attorney Steven Likes, representing Opportunity Parmers and HCHRA, on this project. Therefore, I do not have much information on the refinancing other than the fact that two facilities in Elk River are part of the total refinancing. Jim O'Meara, city bond counsel, has thoroughly reviewed this transaction and the related documents on the city's behalf, worked with Mr. Likes to make any changes required by the city, and finds the attacheciJoint Powers Agreement and Resolution to be acceptable. The legal fees associated with this transaction are the responsibility of Opportunity Partners and the HCHRA. A $1,000 escrow was required before this could proceed and that payment has been received. The refinancing bonds will be issued by the HCHRA and will not affect the City's outstanding debt and the City is in no way responsible for debt service on the bonds. By approving the resolution and entering into the joint powers agreement, the City Council is giving its consent for the HCHRA to issue the revenue bonds that refinance and/or prepay the outstanding mortgage loans on Opportunity Partner facilities. Action Requested The City Council is asked to hold a public hearing on assisting Opportunity Partners with financing a project that includes two properties in Elk River. Next, the Council is asked to act on the resolution authorizing the execution and delivery of a joint powers agreement with the HCHRA to finance a project for Opportunity Parmers. s:\council~oppurpartjpa.doc THE CITY OF ELK RIVER, MINNESOTA RESOLUTION NO. AUTHORIZING THE EXECUTION AND DELIVERY OF A JOINT POWERS AGREEMENT WITH THE HENNEPIN COUNTY HOUSING AND REDEVELOPMENT AUTHORITY TO FINANCE A PROJECT FOR OPPORTUNITY PARTNERS WHEREAS, the Hennepin County Housing and Redevelopment Authority ("the Hennepin County HRA") has advised the City of Elk River, Minnesota (the "City") that Opportunity Partners, a Minnesota nonprofit corporation (the "Borrower"), has requested that the Hennepin County HRA issue its tax-exempt revenue bonds and loan the proceeds of such bonds to the Borrower, thereby permitting the Borrower to refinance, on a tax-exempt basis, its outstanding indebtedness incurred in connection with the acquisition of certain residential treatment and workplace facilities owned and operated by the Borrower, including two group treatment residences that are located within the territorial boundaries of the City (the "Project"); WHEREAS, the City Council of the City conducted a public heating on the date hereof on the proposed financing; and at such public heating all parties who appeared or who submitted written comments were given an opportunity to express their views with respect to the proposal; and WHEREAS, a proposed Joint Powers Agreement between the Hennepin County HRA and the City respecting this proposed financing has been submitted for the City Council's consideration; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELK RIVER, MINNESOTA that the Joint Powers Agreement in substantially the form submitted to the City at this meeting is hereby approved, and its execution and delivery in the name and on behalf of the City by the Mayor and the City Administrator are hereby approved. BE IT FURTHER RESOLVED, that, solely for purposes of Section 147(f) of the Internal Revenue Code of 1986, as amended, the City hereby gives host approval of the issuance of said revenue bonds to finance the Project. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF ELK RIVER, MINNESOTA, THIS l0th DAY OF SEPTEMBER, 2001. (Seal of the City of Elk River, Minnesota) Stephanie A. Klinzing, Mayor ATTEST: Sandra A. Peine, City Clerk M1:774413.01 JOINT POWERS AGREEMENT This Joint Powers Agreement, dated as of September 1, 2001 (the "Agreement"), is made by and between the HENNEPIN COUNTY HOUSING AND REDEVELOPMENT AUTHORITY (the "Hennepin County HRA") and the CITY OF ELK RIVER, MINNESOTA (the "City"). RECITALS WHEREAS, the Hennepin County HRA represents that it is a housing and redevelopment authority created pursuant to Minnesota Statutes, Section 383B.77, has all of the powers and duties of a housing and redevelopment authority described in Sections 469.001 through and including 469.047, as amended (the "Act"), and all powers under provisions of Minnesota Statutes, Sections 469.152 to 469.1651 (the "Industrial Development Act"), including the authority to issue bonds and loan the proceeds thereof for certain projects, and is authorized to operate within the territorial boundaries of Hennepin County, Minnesota (the "County"); and WHEREAS, Opportunity Partners, a Minnesota nonprofit corporation (the "Borrower"), has requested that the Hennepin County HRA issue its tax-exempt revenue bonds (the "Bonds") in order for the Borrower to refinance certain outstanding indebtedness, including indebtedness related to two of the Borrower's facilities located in the City (the "Project"); and WHEREAS, Minnesota Statutes, Section 471.59 (the "Joint Powers Act"), states that two or more governmental units, acting through their governing bodies, may enter into an agreement whereby they jointly or cooperatively exercise any power common to them or similar powers, including those which are the same except for the territorial limits within which they may be exercised; NOW, THEREFORE, the Hennepin County HRA and the City agree as follows: 1. The City consents to the issuance by the Hennepin County HRA of its revenue Bonds and the financing of the Project. In no event shall the Bonds ever be payable from, secured by or charged upon any funds or other assets of the City. The foregoing approval is conditioned upon receipt of a written opinion from bond counsel for the Bonds, addressed to the City, that no portion of the Bonds shall be allocable to or required to be taken into account by the City for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. The City has not requested to and will not participate in the issuance of the Bonds, and nothing herein is intended or shall be construed as a request or recommendation by the City that the Hennepin County HRA issue the Bonds. The City shall have no obligation whatsoever with respect to the Bonds or the financing of the Project. 2. The City shall incur no liability, obligation or expense associated with this Agreement or the issuance by the Hennepin County HRA of its Bonds and shall be reimbursed by the Borrower for all expenses, including any legal fees. JOINT POWERS AGREEMENT 3. Except as provided in paragraph 2 above, the City shall not be entitled to any property acquired as a result of this Agreement. All other property so acquired shall be the property of the Hennepin County HRA and shall not be the responsibility or obligation of the City. Any surplus moneys remaining after the purpose of this Agreement has been completed, unless otherwise provided for in the Bond Indenture or the Loan Agreement, shall belong to the Hennepin County HRA. 4. This Agreement may not be terminated by any party so long as any Bonds are Outstanding (as defined in the Bond Resolution). JOINT POWERS AGREEMENT IN WITNESS WHEREOF, duly authorized officers of the HENNEPIN COUNTY HOUSING AND REDEVELOPMENT AUTHORITY and the CITY OF ELK RIVER, MINNESOTA have executed this Agreement as of the date set forth above. HENNEPIN COUNTY HOUSING AND REDEVELOPMENT AUTHORITY By Its Chair (SEAL) By Its Executive Director 3 JOINT POWERS AGREEMENT CITY OF ELK RIVER, MINNESOTA By Its Mayor By Its City Administrator 4 JOINT POWERS AGREEMENT NOTICE OF PUBLIC HEARING ON APPROVAL OF JOINT POWERS AGREEMENT AND ISSUANCE OF REVENUE OBLIGATIONS CITY OF ELK RIVER, MINNESOTA NOTICE IS HEREBY GIVEN that the City Council (the "Council") of the City of Elk River, Minnesota (the 'City") will hold a public hearing on assisting Opportunity Partners, a Minnesota nonprofit corporation, with financ- ing a project consisting of refinanc- ing and prepaying outstanding mortgage loans incurred to acquire group treatment residences located at 11754 191-1/2 Ave. and 497 Gates Ave. in Elk River, Minnesota. Under the proposal, the Hennepin County Housing and Redevelopment Authority (the "Hennepin County HRAT) will issue up to $4,000,000 in aggregate prin- cipal amount of its revenue obliga- tions pursuant to Municipal Industrial Development Act, Minnesota Statutes, Sections 469.152 through and including 469.1651, as amended, in order to finance the project. The revenue obligations will be limited obliga- tions of the Hennepin Coun[y HRA payable solely from the revenues pledged to the payment thereof, and will not be a general obligation of, or be secured by the taxing power of, the Hennepin County HRA or the City. The hearing will be held in City Hall at 13065 Orono Parkway in the City of Elk River, Minnesota on Monday, September 10, 2001, at approximately 6:30 o'clock P.M. At said time and place the Board shall give all parties who appear or sub- mit written comments an opportu- nity to express their views with respect ~o the proposal ~o finance the project. Dated: August 15, 2001. /s/Sandra Pe~ne City Clerk (Ag22)