Res 1999-44 RESOLUTION 44-1999
A RESOLUTION PROVIDING FOR THE ISSUANCE
AND SALE OF SENIOR HOUSING REVENUE BONDS,
TO PROVIDE FUNDS FOR A SENIOR HOUSING PROJECT,
ON BEHALF OF MINNESOTA CHRISTIAN HOMES OF FRIDLEY, INC.
BE IT RESOLVED by the City Council of the City of Fridley,Minnesota(the "City"), as follows:
1. Authority. The City is,by the Constitution and laws of the State of Minnesota,including Minnesota
Statutes, Chapter 462C, as amended (the "Act"), authorized to issue and sell its revenue bonds for the
purpose of financing the cost of housing developments for the elderly and to enter into agreements necessary
or convenient in the exercise of the powers granted by the Act.
2. Authorization of Project; Documents Presented. Minnesota Christian Homes of Fridley, Inc., a
Minnesota nonprofit corporation(the "Corporation"),has proposed to this Council that the City issue and
sell its City of Fridley Senior Housing Revenue Bonds (Banfill Crossing Homes Project), Series 1999, in
substantially the form set forth in the hereinafter-mentioned Indenture(the"Bonds"),pursuant to the Act and
loan the proceeds thereof to the Corporation, in order to provide financing with respect to costs of the
acquisition,construction,equipping and furnishing of an approximately 158,000 square foot senior housing
development of approximately 110 rental units, all designed for independent living, and common space
including a dining room,parlor, community kitchen, a barber and beauty room, a laundry room, a game
room, a general store, solarium, guest room, underground parking, car wash bay, and a library generally
located west of University Avenue and north of 83rd Street in the City(the"Project"). Forms of the following
documents relating to the Bonds have been submitted to the City:
(a) Loan Agreement(the"Loan Agreement")dated as of July 1, 1999 between the City and the
Corporation,whereby the City agrees to make a loan to the Corporation of the gross proceeds of sale
of the Bonds and the Corporation agrees to undertake and complete the Project and to pay amounts
in repayment of the loan sufficient to provide for the full and prompt payment of the principal of,
premium, if any,and interest on the Bonds;
(b) Indenture of Trust (the "Indenture") dated as of July 1, 1999, between the City and U.S.
Bank Trust National Association,as trustee(the"Trustee"),authorizing the issuance of and pledging
certain revenues,including those to be derived from the Loan Agreement,as security for the Bonds,
and setting forth proposed recitals,covenants and agreements relating thereto;
(c) Mortgage Agreement(the "Mortgage"),dated as of July 1, 1999, from the Corporation to
the City, by which the Corporation grants to the City a mortgage lien on and security interest in
certain mortgaged property, as described therein,as further security for the payment of the Bonds
and assigns to the City its interests in all leases and rents with respect to the mortgaged property;
(d) Assignment of Mortgage Agreement(the"Assignment")dated as of July 1, 1999,from the
City to the Trustee,by which the City assigns its interest in the Mortgage to the Trustee;
(e) Disbursing Agreement(the"Disbursing Agreement")dated as of July 1, 1999 by and among
the Corporation, the Trustee and the Disbursing Agent (this document not to be executed by the
City);
Resolution No. 44—1999 Page 2
(f) Bond Purchase Agreement(the"Bond Purchase Agreement"),by and between Dougherty
Summit Securities LLC (the "Underwriter"), the Corporation and the City, providing for the
purchase of the Bonds from the City by the Underwriter and setting the terms and conditions of
purchase;
(g) Preliminary Official Statement,together with the form of final Official Statement and 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; and
(h) Regulatory Agreement(the"Regulatory Agreement")dated as of July 1, 1999 by and among
the Corporation,the Trustee and the City.
3. Findings. It is hereby found, determined and declared that:
(a) The Project constitutes a senior residential rental project authorized by and described in the
Act.
(b) There is no litigation pending or,to the best of its knowledge,threatened against the City
relating to the Bonds, the Loan Agreement, the Bond Purchase Agreement or the Indenture or
questioning the due organization of the City, or the powers or authority of the City to issue the
Bonds and undertake the transactions contemplated hereby.
(c) The execution, delivery and performance of the City's obligations under the Bonds, the
Indenture,the Bond Purchase Agreement, the Regulatory Agreement and the Loan Agreement do
not and will not violate any order of any court or other agency of government of which the City is
aware or in which the City is a party,or any indenture,agreement or other instrument to which the
City 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) It is desirable that the Bonds be issued by the City upon the terms set forth in the Indenture,
under the provisions of which the City's interest in the Loan Agreement will be pledged to the
Trustee as security for the payment of principal of,premium,if any, and interest on the Bonds.
(e) The Loan Agreement provides for payments by the Corporation to the Trustee for the
account of the City of such amounts as will be sufficient to pay the principal of,premium,if any,
and interest on the Bonds when due.The Loan Agreement obligates the Corporation to pay for all
costs of operation and maintenance of the Project Facilities,including adequate insurance,taxes and
special assessments. A reserve fund has been established under the provisions of the Indenture in
connection with the issuance of the Bonds.
(fj Under the provisions of the Act,and as provided in the Loan Agreement and Indenture,the
Bonds are not to be payable from nor charged upon any funds other than amounts payable pursuant
to the Loan Agreement and moneys in the funds and accounts held by the Trustee which are pledged
to the payment thereof; the City is not subject to any liability thereon;no owners of the Bonds shall
ever have the right to compel the exercise of the taxing power of the City to pay any of the Bonds
Resolution No. 44—1999 Page 3
or the interest thereon,nor to enforce payment thereof against any property of the City; the Bonds
shall not constitute a charge,lien or encumbrance,legal or equitable,upon any property of the City
(other than the interest of the City in the Loan Repayments to be made by the Corporation under the
Loan Agreement); and each Bond issued under the Indenture shall recite that such Bond,including
interest thereon, shall not constitute or give rise to a charge against the general credit or taxing
powers of the City.
4. Approval and Execution of Documents. The forms of Loan Agreement,Indenture,Bond Purchase
Agreement, Disbursing Agreement, Regulatory Agreement, Mortgage and Assignment referred to in
paragraph 2, are approved. The Loan Agreement,Indenture,Regulatory Agreement,Assignment and Bond
Purchase Agreement shall be executed in the name and on behalf of the City by the Mayor and the City
Manager,or executed or attested by other officers of the City,in substantially the form on file,but with all
such changes therein, not inconsistent with the Act or other law, as may be approved by the officers
executing the same,which approval shall be conclusively evidenced by the execution thereof; and then shall
be delivered to the Trustee. Modifications to the form of Mortgage may be made at the discretion of the
parties thereto.
5. Approval.Execution and Delivery of Bonds. The City shall proceed forthwith to issue the Bonds,
in an aggregate principal amount of not to exceed$9,700,000,in the form and upon the terms set forth in the
Indenture,which terms are for this purpose incorporated in this resolution and made a part hereof;provided,
however, that the initial aggregate principal amount of and the maturities of the Bonds, the interest rates
thereon,and any provisions for the optional or mandatory redemption thereof shall all be as set forth in the
final form of the Indenture to be approved,executed and delivered by the officers of the City authorized to
do so by the provisions of this Resolution,which approval shall be conclusively evidenced by such execution
and delivery; and provided further that,in no event, shall such maturities exceed 35 years or such rates of
interest produce a net interest cost in excess of 7.00%per annum. The Underwriter has agreed pursuant to
the provisions of the Bond Purchase Agreement,and subject to the conditions therein set forth,to purchase
the Bonds at the purchase price set forth in the Bond Purchase Agreement,and said purchase price is hereby
accepted. The Mayor, City Manager and other City officers are authorized and directed to prepare and
execute the Bonds as prescribed in the Indenture and to deliver them to the Trustee,together with a certified
copy of this Resolution and the other documents required by Section 3.5 of the Indenture,for authentication,
registration and delivery to the Underwriter. As provided in the Indenture,each Bond shall contain a recital
that it is issued pursuant to the Act, and such recital shall be conclusive evidence of the validity and
regularity of the issuance thereof.
6. Official Statement. The City hereby approves the form of and consents to the circulation by the
Underwriter of the Official Statement in offering the Bonds for sale;provided,however,that the City 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.
7. Certificates.etc. The Mayor,City Manager and other officers of the City are authorized and directed
to prepare and furnish to bond counsel and the purchaser of the Bonds,when issued,certified copies of all
proceedings and records of the City 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 City as to the truth of all statements contained therein.
Resolution No. 44—1999 Page 4
8. Designation of Qualified Tax-Exempt Obligations. In order to qualify the Bonds as"qualified tax-
exempt obligations"within the meaning of Section 265(b)(3), of the Code,the City hereby makes
the following factual statements and representations:
(a) the Bonds are issued after August 7, 1986;
(b) the Bonds are not"private activity bonds"as defined in Section 141 of the Code treating
"qualified 501(c)(3)bonds"as not being private activity bonds;
(c) the City hereby designates the Bonds as"qualified tax-exempt obligations"for purposes of
Section 265(b)(3)of the Code;
(d) the reasonably anticipated amount of tax-exempt obligations (other than private activity
bonds,treating qualified 501(c)(3)bonds as not being private activity bonds)which will be
issued by the City(and all entities treated as one issuer with the City,and all subordinate
entities whose obligations are treated as issued by the City)during this calendar year 1999
will not exceed$10,000,000; and
(e) not more that$10,000,000 of obligations issued by the City during this calendar year 1999
have been designated for purposes of Section 265(b)(3)of the Code.
The City shall use its best efforts to comply with federal procedural requirements which may apply in order
to effectuate the designation made by this paragraph.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS 28TH DAY
OF JUNE, 1999.
N'i CY/ `%iRe/ NON-MAYOR
ATTEST:
,Je- ,Z
DEBRA A. SKOGEN— TY CLERK