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HomeMy WebLinkAbout20101206 - VII-2 & VIII-C-1 City Council Memorandum To: Mayor Hicks & City Councilmembers From: Charlene Stark on behalf of Regina Medical Center Group Date: 12/02/2010 Item: Public Hearing-Issuance of Revenue Bonds: Regina Medical Center Council Action Requested: Council is asked to hold a public hearing on behalf of bonds being issued for the Regina Medical Center through the use of the conduit debt process. Background Information: In 1998 the City helped the Regina Medical Center issue bonds for the expansion of the medical complex at that time. The Regina Medical Group is requesting assistance in refinancing the original bonds and issueing additional bonds for equipment. The City is not fiscally responsible for these bonds. The conduit debt process allows business's to capitalize on the City's bond rating which is S & P's rate of AA for issuance and rating of their bonds. Financial Impact: None Advisory Commission Discussion: NA Council Committee Discussion: NA Attachments:  None Extract of Minutes of a Meeting of the City Council of the City of Hastings, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Hastings, Minnesota, was duly held at the City Hall in the City of Hastings on Monday, the 6th day of December, 2010, at 7:00 o'clock P.M. The following Council Members were present: and the following were absent: Council Member ______________ introduced the following resolution in writing and moved its adoption: RESOLUTION NO. 12 - -10 RESOLUTION AUTHORIZING THE ISSUANCE OF HEALTH CARE FACILITY REVENUE BONDS TO FINANCE A PROJECT UNDER MINNESOTA STATUTES, SECTIONS 469.152 THROUGH 469.1651 AND AUTHORIZING THE EXECUTION OF VARIOUS DOCUMENTS IN CONNECTION WITH THE REGINA MEDICAL CENTER PROJECT The motion for the adoption of the foregoing resolution was duly seconded by Council Member _____________ and, after full discussion of the resolution, and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. 3064035v1 RESOLUTION AUTHORIZING THE ISSUANCE OF HEALTH CARE FACILITY REVENUE BONDS TO FINANCE A PROJECT UNDER MINNESOTA STATUTES, SECTIONS 469.152 THROUGH 469.1561 AND AUTHORIZING THE EXECUTION OF VARIOUS DOCUMENTS IN CONNECTION WITH THE REGINA MEDICAL CENTER PROJECT BE IT RESOLVED by the City Council of the City of Hastings, Minnesota (the "City"), as follows: 1.Proposal. The City Council has received a proposal from Regina Medical Center, a Minnesota nonprofit corporation (the "Borrower") that the City undertake to finance a certain Project as herein described pursuant to Minnesota Statutes, Sections 469.152 through 469.1561 (the "Act"), through issuance by the City of its Health Care Facility Revenue Bonds, Series 2010 (Regina Medical Center Project), in the aggregate principal amount not to exceed $25,000,000 (the "Bonds"). 2.Project. The Borrower desires to finance the (a) acquisition and installation of certain information technology for patient and financial records in the Borrower's facility located at 1174 Nininger Road in the City, which will be of the character and accomplish the purposes provided by the Act, and (b) redemption and refunding of prior obligations issued on behalf of the Borrower by the Cities of Vermillion and Hampton which were issued to finance certain capital expenditures for the Borrower's facility in the City (the “Project”). 3.Financing Structure. It is proposed that, pursuant to a Loan Agreement between the City and the Borrower (the "Loan Agreement"), the City agrees to make a loan of the proceeds of the sale of the Bonds to the Borrower and the Borrower 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. It is further proposed that the City assigns its rights to the payment and certain other rights under the Loan Agreement to the Wells Fargo Bank, National Association, Minneapolis, Minnesota, a national banking association (the "Trustee"), as security for payment of the Bonds under an Indenture of Trust (the "Indenture"). The Bonds will be purchased by Bremer Bank, National Association as purchaser (the “Purchaser”), through George K. Baum & Company, as placement agent. 4.Forms of Documents Submitted. Forms of the following documents have been submitted to the City Council for approval: (a)The Loan Agreement; and (b)The Indenture of Trust. 2 3064035v1 5.Findings. It is hereby found, determined and declared that: (a)the Project described in the Loan Agreement and the Indenture constitutes a "project" within the meaning of Subdivision 2(d) of Section 469.153 of the Act, and furthers the purposes of the Act; (b)the purpose of the Project is, and the effect thereof will be, to promote the public welfare of the community by the acquisition of information technology necessary for operation of a medical facility. (c)the Act authorizes (i) the acquisition and installation of the Project, (ii) the issuance and sale of the Bonds, (iii) the execution and delivery by the City of the Loan Agreement and the Indenture (collectively, the "Bond Documents"), (iv) the performance of all covenants and agreements of the City contained in the Bond Documents, and (v) the performance of all other acts and things required under the constitution and laws of the State of Minnesota to make the Bond Documents and the Bonds valid and binding obligations of the City in accordance with their terms; (d)it is desirable that the Borrower be authorized, subject to the terms and conditions set forth in the Loan Agreement, which terms and conditions the City determines to be necessary, desirable and proper, to complete the acquisition, construction and equipping of the Project by such means as shall be available to the Borrower and in the manner determined by the Borrower, and with or without advertisement for bids as required for the acquisition, construction, and equipping of the Project; (e)it is desirable that the Bonds be issued by the City upon the terms set forth in the Indenture and established pursuant to this resolution; (f)the payments under the Loan Agreement are fixed to produce revenue sufficient to provide for the prompt payment of principal of, premium, if any, and interest on the Bonds issued under the Indenture when due, and the Loan Agreement and the Indenture also provide that the Borrower is required to pay all expenses of the operation and maintenance of the Project, including, but without limitation, adequate insurance thereon and insurance against all liability for injury to persons or property arising from the operation thereof, and all taxes and special assessments levied upon or with respect to the Project and payable during the term of the Loan Agreement and the Indenture; (g)under the provisions of the Act, and as provided in the Loan Agreement and the Indenture, the Bonds are not to be payable from or charged upon any funds other than the revenue pledged to the payment thereof; the City is not subject to any liability thereon; no holder of any Bonds shall ever have the right to compel any exercise by the City of its taxing powers to pay any of the Bonds or the interest or premium thereon, or to enforce payment thereof against any property of the City, except the interests of the City in the Loan Agreement which have been assigned to the Trustee under the Indenture; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, except the interest of the City in the Loan Agreement which have 3 3064035v1 been assigned to the Trustee under the Indenture; the Bonds shall recite that the Bonds do not constitute or give rise to a pecuniary liability or moral obligation of the City, the state or its political subdivisions, and that the Bonds, including interest thereon, are payable solely from the revenues pledged to the payment thereof; and the Bonds shall not constitute a debt of the City within the meaning of any constitutional or statutory or home rule charter limitation of indebtedness. The Bonds are not moral obligations nor annual appropriation obligations of the City; and (h)a public hearing on the Project was held on December 6, 2010, after notice was published and materials made available for public inspection at the City Hall, all as required by the Act and Section 174(f) of the Internal Revenue Code of 1986, as amended (the "Code"), at which public hearing all those appearing who desired to speak on the Project were heard and written comments were accepted. 6.Approval of Forms; Execution. Subject to the approval of Briggs and Morgan, Professional Association, as Bond Counsel, and the City Attorney and the provisions of paragraph 9 hereof, the Bond Documents and all other documents listed in paragraph 4 hereof are approved in substantially the forms submitted. The Bond Documents, in substantially the forms submitted, are directed to be executed in the name and on behalf of the City by the Mayor and the City Administrator (collectively, the "Authorized Officers"). Any other documents and certificates necessary or appropriate to the transaction described above shall be executed by the appropriate City officers. Copies of all of the documents necessary to the transaction herein described shall be delivered, filed and recorded as provided herein and in the Loan Agreement and the Indenture. The City hereby authorizes and directs the Authorized Officers and other officers, employees or agents of the City to submit the proposal for the Project to the Minnesota Department of Employment and Economic Development ("DEED") requesting approval and providing DEED with such information as it may require, and the City further ratifies any prior actions taken with respect to such submission. 7.Issuance; Acceptance of Offer. Subject to paragraphs 6 and 9 hereof, the City hereby authorizes the issuance of the Bonds, in the form and upon the terms set forth in the Indenture. The maximum principal amount of the Bonds shall not exceed $25,000,000. The Bonds shall bear interest at the rate or rates, mature in the amounts and be subject to redemption as agreed to by the Purchaser and the Borrower, and approved by the Mayor as evidenced by his execution of the Indenture, but in no event shall the interest rate or rates be fixed at rates which would cause the net interest cost of the Bonds to exceed five percent (5.00%) and the final maturity date on the Bonds shall be not later than December 1, 2035. The principal amount, maturity dates, redemption provisions, and interest rate or rates so established shall be set forth in the Indenture prior to its execution. The Administrator and other officials are hereby authorized and directed to prepare and execute the Bonds as prescribed in the Indenture and to deliver them to the Trustee for authentication and delivery to the Purchaser. 8.Records and Certificates. The Mayor, the City Administrator, and other officers of the City are authorized and directed to prepare and furnish to the Purchaser 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 relating to the legality of the Bonds as such facts appear from the books and records in the officers' custody and control or as otherwise 4 3064035v1 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. 9.Changes in Forms Approved; Absent and Disabled Officers. The approval hereby given to the various documents referred to above includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved prior to their delivery by Bond Counsel and by the City officials authorized herein to execute or accept, as the case may be, said documents; and said City officials are hereby authorized to approve said changes on behalf of the City. The approval hereby given to the various documents referred to above includes approval of (a) such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved prior to their delivery by Bond Counsel and by the City officials authorized herein to execute or accept, as the case may be, said documents and (b) such additional documents, agreements or certificates as may be necessary and appropriate in connection with the Bond Documents, as are approved by Bond Counsel and City officials authorized herein to execute said documents prior to their execution; and said City officials are hereby authorized to approve said changes or additional documents, agreements or certificates on behalf of the City. The execution of any instrument by the appropriate officer or officers of the City herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. In the event of absence or disability of the Mayor or the Administrator, any of the documents authorized by this resolution to be executed may be executed without further act or authorization of the City Council by the Acting Mayor, or the person authorized to act in the stead of the City Administrator, or by such other officer or officers of the City, in the opinion of Bond Counsel, may act in their behalf. 10.Headings; Terms. Paragraph headings in this resolution are for convenience of reference only and are not a part hereof, and shall not limit or define the meaning of any provision hereof. Capitalized terms used, but not defined, herein shall have the meanings given them in, or pursuant to, the Bond Documents. Adopted by the City Council of the City of Hastings, Minnesota this 6th day of December, 2010. _______________________________________ Paul Hicks, Mayor ATTEST: Melanie Mesko Lee, City Clerk 5 3064035v1 STATE OF MINNESOTA ) ) SS. COUNTIES OF DAKOTA AND WASHINGTON ) I, the undersigned, being the duly qualified and acting Administrator of the City of Hastings, Minnesota (the "City"), do hereby certify that attached hereto is a compared, true and correct copy of a resolution giving final approval to an issuance of revenue bonds by the City on behalf of Regina Medical Center, duly adopted by the City Council of the City on December 6, 2010, at a regular meeting thereof duly called and held, as on file and of record in my office, which resolution has not been amended, modified or rescinded since the date thereof, and is in full force and effect as of the date hereof, and that the attached Extract of Minutes as to the adoption of such resolution is a true and accurate account of the proceedings taken in passage thereof. WITNESS My hand this ____ day of December, 2010. _______________________________________ Melanie Mesko Lee, City Clerk 6 3064035v1