Res 2013-47
CITY OF FRIDLEY, MINNESOTA
RESOLUTION NO. 2013 - 47
RESOLUTION GIVING PRELIMINARY APPROVAL TO THE PROPOSED ISSUANCE OF A
HEALTHCARE FACILITIES REVENUE NOTE UNDER MINNESOTA STATUTES,
SECTIONS 469.152 THROUGH 469.1655, AS AMENDED; AUTHORIZING THE
PUBLICATION OF A NOTICE OF PUBLIC HEARING; AND ESTABLISHING THE DATE
FOR A PUBLIC HEARING
BE IT RESOLVED by the City Council of the City of Fridley, Minnesota (the “City”), as
follows:
Section 1. Recitals.
1.01. Statutory Authorization. Minnesota Statutes, Sections 469.152 through 469.1655, as
amended (the “Act”), authorizes a municipality to issue revenue obligations to finance, in whole or in
part, the cost of the acquisition, construction, reconstruction, improvement, betterment, or extension of a
“project,” defined in the Act, in part, as any properties, real or personal, used or useful in connection with
a revenue producing enterprise, whether or not operated for profit, engaged in providing health care
services, including hospitals, nursing homes, and related medical facilities.
1.02. Series 2013 Note. Benedictine Living Center of Fridley, LLC, a Minnesota nonprofit
limited liability company (the “Borrower”), which will be controlled by Benedictine Health System
(“BHS”), either as its sole member or as a joint member with Allina Health System (“Allina”) or any
affiliate of BHS or Allina, has proposed that the City issue its Health Care Facilities Revenue Note
(BHS/Allina TCU Project), Series 2013 (the “Series 2013 Note”), in an aggregate principal amount not to
exceed $10,000,000.
1.03. Project. The Borrower has proposed to apply the proceeds of the Series 2013 Note, along
with the proceeds of a subordinate revenue note (the “Subordinate Note”) proposed to be issued by the
City of Mounds View, Minnesota (the “City of Mounds View”) in the aggregate principal amount not to
exceed $3,000,000 and equity of the Borrower, to (i) finance the acquisition, construction, and equipping
of a 45-bed transitional care facility and 5 care suites located on the Unity Hospital/Allina campus at 550
Osborne Road in the City (the “Project”); (ii) fund capitalized interest on the Series 2013 Note and the
Subordinate Note (together, the “Notes”); (iii) fund any required reserves; and (iv) pay costs of issuance
of the Notes and other costs related to the Project. The Project will be owned and operated by the
Borrower.
1.04. Public Hearing Required. Prior to the issuance of the Series 2013 Note, the City Council
of the City must conduct a public hearing to (i) approve the issuance of the Series 2013 Note pursuant to
the requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended, and regulations
promulgated thereunder (the “Code”); and (ii) approve the Project pursuant to Section 469.154,
subdivision 4 of the Act.
1.05. Host Approval. Prior to the issuance of the Subordinate Note, the City Council of the
City must hold a duly noticed public hearing and provide host approval to the issuance of the Subordinate
Note by the City of Mounds View, all pursuant to the requirements of Section 147(f) of the Code.
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Section 2. City Council Approvals.
2.01. Preliminary Approval. The Project is hereby given preliminary approval by the City.
The issuance of the Series 2013 Note in one or more series in the aggregate principal amount not to
exceed $10,000,000 to finance the Project is hereby approved subject to the City Council holding a public
hearing on the Project, the issuance of the Series 2013 Note, and the issuance of the Subordinate Note by
the City of Mounds View and the approval of the Project by the Minnesota Department of Employment
and Economic Development (“DEED”) as required by the Act. The issuance of the Series 2013 Note is
also subject to the mutual agreement of the City, the Borrower, and the initial purchaser of the Series
2013 Note as to the details of the Series 2013 Note and provisions for its payment.
2.02. Series 2013 Note Not Obligation of City. The Series 2013 Note shall not constitute a
charge, lien, or encumbrance, legal or equitable, upon any property of the City except the City’s interest
in the loan or revenue agreement with respect to the Series 2013 Note and the Project, and the Series 2013
Note, when, as, and if issued, shall recite in substance that the Series 2013 Note, including interest
thereon, is payable solely from the revenues received from the Project and property pledged to the
payment thereof, and shall not constitute a general or moral obligation of the City.
2.03. Approval of the Project. It is hereby found and determined that the Project furthers the
purposes set forth in the Act, and the Project constitutes a “project” within the meaning of
Section 469.153, subdivision 2(d) of the Act.
2.04. Submission of Project Application to DEED. In accordance with Section 469.154 of the
Act, the City Manager of the City is hereby authorized and directed to submit the proposal for the Project
to DEED. The City Manager and other officers, employees and agents of the City are hereby authorized
to provide DEED with any preliminary information needed for this purpose, and the City Manager is
authorized to initiate and assist in the preparation of such documents as may be appropriate to the Project,
if it is approved.
2.05. Approval of Bond Counsel. The law firm of Kennedy & Graven, Chartered, is
authorized to act as Bond Counsel and to assist in the preparation and review of necessary documents
relating to the Project and the Series 2013 Note issued in connection therewith. The Mayor, City
Manager, and other officers, employees, and agents of the City are hereby authorized to assist Bond
Counsel in the preparation of such documents.
Section 3. Public Hearing.
3.01. Establishment of Public Hearing. The City Council shall meet at or after 7:00 p.m. on
Monday, October 28, 2013, to conduct a public hearing on the Project and the issuance of the Series 2013
Note by the City and to approve the issuance of the Subordinate Note by the City of Mounds View as
requested by the Borrower.
3.02. Notice of Public Hearing. The City Manager is authorized and directed to publish notice
of the hearing in substantially the form attached hereto as EXHIBIT A in the Sun-Focus, the official
newspaper and a newspaper of general circulation in the City, once, at least fourteen (14) days prior to the
date of the public hearing.
Section 5. Costs. The Borrower will pay the administrative fees of the City and pay, or,
upon demand, reimburse the City for payment of, any and all costs incurred by the City in connection
with the Project and the issuance of the Series 2013 Note, whether or not the Series 2013 Note is issued.
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Section 6. Commitment Conditional. The adoption of this resolution does not constitute a
guaranty or firm commitment that the City will issue the Series 2013 Note as requested by the Borrower.
The City retains the right in its sole discretion to withdraw from participation and accordingly not to issue
the Series 2013 Note, or issue the Series 2013 Note in an amount less than the amount referred to herein,
should the City at any time prior to issuance thereof determine that it is in the best interest of the City not
to issue the Series 2013 Note, or to issue the Series 2013 Note in an amount less than the amount referred
to in Section 2.01 hereof, or should the parties to the transaction be unable to reach agreement as to the
terms and conditions of any of the documents required for the transaction.
Section 7. Effective Date. This resolution shall be in full force and effect from and after its
passage.
rd
Passed and adopted by the City Council of the City of Fridley, Minnesota, this 23 day of September,
2013.
Scott J. Lund, Mayor
Attest:
Debra A. Skogen, City Clerk
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EXHIBIT A
NOTICE OF PUBLIC HEARING
CITY OF FRIDLEY, MINNESOTA
NOTICE OF PUBLIC HEARING WITH RESPECT TO A PROJECT
DESCRIBED IN MINNESOTA STATUTES, SECTIONS 469.152
THROUGH 469.1655, AS AMENDED, AND THE ISSUANCE OF A
HEALTH CARE FACILITIES REVENUE NOTE THEREUNDER
NOTICE IS HEREBY GIVEN that the City Council of the City of Fridley, Minnesota (the
“City”) will hold a public hearing on Monday, October 28, 2013, at or after 7:00 p.m., at City Hall, 6431
University Avenue NE, in the City, to consider a proposal for the issuance of a revenue obligation of the
City under Minnesota Statutes, Sections 469.152 through 469.1655, as amended (the “Act”), on behalf of
Benedictine Living Center of Fridley, LLC, a Minnesota nonprofit limited liability company (the
“Borrower”), which will be controlled by Benedictine Health System (“BHS”), either as its sole member
or as a joint member with Allina Health System (“Allina”) or any affiliate of BHS or Allina. The
proceeds of the revenue obligation proposed to be issued by the City for the benefit of the Borrower (the
“Series 2013 Note”) will be applied, along with the proceeds of a subordinate revenue obligation (the
“Subordinate Note”) proposed to be issued by the City of Mounds View, Minnesota (the “City of Mounds
View”) in the aggregate principal amount not to exceed $3,000,000 and equity of the Borrower, to (i)
finance the acquisition, construction, and equipping of a 45-bed transitional care facility and 5 care suites
located on the Unity Hospital/Allina campus at 550 Osborne Road in the City (the “Project”); (ii) fund
capitalized interest on the Series 2013 Note and the Subordinate Note (together, the “Notes”); (iii) fund
required reserves; and (iv) pay costs of issuance of the Notes and other costs related to the Project. The
Project will be owned and operated by the Borrower.
Following the public hearing, the City Council will consider adoption of a resolution approving
the Project, approving the issuance of the Series 2013 Note, and approving the issuance by the City of
Mounds View of the Subordinate Note. The aggregate face amount of the Series 2013 Note proposed to
be issued to finance the Project is presently estimated not to exceed $10,000,000 and may be issued in one
or more series. The Series 2013 Note to be issued by the City will constitute a limited obligation of the
City payable solely from the revenues expressly pledged to the payment thereof, and will not be a general
or moral obligation of the City and will not be secured by the taxing power of the City or any assets or
property of the City except any interests of the City in the Project that may be granted to the City in
conjunction with this financing.
All interested persons may appear and be heard at the time and place set forth above.
A draft copy of the proposed application to the Department of Employment and Economic
Development for approval of the Project, together with all attachments and exhibits, shall be available for
public inspection following the publication of this notice, at City Hall during normal business hours.
Dated: [Date of Publication]
CITY OF FRIDLEY, MINNESOTA
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