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HomeMy WebLinkAboutResolution 5461• • 0 Ok CITY of ORONO RESOLUTION OF THE CITY COUNCIL NO. 54 6 1 RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF UP TO $800,000 REVENUE NOTES, SERIES 2006 (HILL SCHOOL OF MINNESOTA PROJECT) AND AUTHORIZING EXECUTION AND DELIVERY OF VARIOUS DOCUMENTS BE IT RESOLVED by the City Council of the City of Orono as follows: 1. Authoritv. This City is, by the Laws of the State of Minnesota, including Sections 469.152 to 469.165, Minnesota Statutes, as amended (the "Act"), authorized to issue and sell its revenue notes for the purpose of financing the cost of acquisition and construction of authorized projects and to enter into contracts necessary or convenient in the exercise of the powers granted by the Act. 2. Authorization of the Notes. The City hereby determines that it is necessary and expedient to authorize, and the City does hereby authorize, the issuance and sale of the City's Revenue Notes, Series. 2006 (Hill School of Minnesota Project) (the "Notes"), pursuant to the Act to provide money to be loaned to Hill School of Minnesota, a Minnesota nonprofit corporation (the "Borrower") in the aggregate principal amount of up to Eight Hundred Thousand Dollars ($800,000) to finance costs of construction of additions, improvements and renovations to the Borrower's pre -K through 9 school and to refinance existing indebtedness incurred by the Borrower as an educational facility (the "Project"). 3. Documents Presented. Forms of the following documents relating to the Notes and the Project have been prepared or reviewed by bond counsel, and submitted to the City and are now on file in the office of the City Clerk: (a) Loan Agreement (the "Loan Agreement") dated as of May 1, 2006, between the City and the Borrower, whereby the City agrees to make a loan of the proceeds of the Notes to the Borrower to finance the Project and the Borrower agrees to pay amounts sufficient to provide for the full and prompt payment of the principal of, premium, if any, and interest on the Notes; 1 • • U CITY of ORONO RESOLUTION OF THE CITY COUNCIL NO. 54 6 1 (b) Form of Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Financing Statement (the "Mortgage") between the Borrower and each of William H. Cooper, Nigel MacLeod and Thomas Cusick (the "Lenders"), as security for the Notes, and setting forth proposed recitals, covenants and agreements relating thereto; (c) Pledge Agreement (the "Assignment") dated as of May 1, 2006 between the City and the Lenders, whereby the City assigns to the Lenders a security interest in all of the City's right, title and interest under the Loan Agreement. 4. Findings. It is hereby found, determined and declared that: (a) The Project furthers the purposes and policies of the Act. (b) The Project is an authorized "project" within the meaning of Section 469.153, Subd. 2(b). (c) The Borrower is a "qualifying organization" within the meaning of Section 469.155, Subd. 4. (d) The City held a public hearing relating to the Project and, in the opinion of bond counsel based on representations of the Borrower, the Notes will be a qualified Section 501(c)(3) bonds within the meaning of Section 145 of the Internal Revenue Code. (e) The Loan Agreement provides for payments by the Borrower to the City of such amounts as will be sufficient to pay the principal of and interest on the Notes when due. The Loan Agreement obligates the Borrower to provide for the operation and maintenance of the Project, including adequate insurance, taxes and special assessments. (f) The payment of principal and interest on the Notes will be secured by the Mortgage. PA • CITY of ORONO RESOLUTION OF THE CITY COUNCIL NO. 5461 (g) The Borrower has approved and requested the City to accept the proposal of the Lenders to purchase the Notes on the terms set forth herein and in the Assignment, and the proposal appears feasible and reasonable. (h) Under the provisions of Section 469.162 of the Act and as provided in the Loan Agreement, the Notes 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 holders of the Notes shall ever have the right to compel the exercise of the taxing power of the City to pay any of the Notes or the interest thereon, nor to enforce payment thereof against any property of the City; the Notes shall never constitute an indebtedness of the City, within the meaning of any constitutional, statutory or charter limitation and shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers; the Notes shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City; and the Notes shall not constitute nor give rise to a charge against the general credit or taxing powers of the City and does not grant to the owner or holder of the Notes the right to have the City levy taxes or appropriate any funds for the payment of principal thereof or the interest or premium, if any, thereon and the Notes are not a general obligation of the City or individual officers or agents thereof. 5. Application to Commissioner. The City shall submit the application for approval of the Project and issuance of the Notes to the Commissioner of the Department of Employment and Economic Development for approval. 6. Approval and Execution of Documents. The forms of the Loan Agreement, the Mortgage and the Assignment referred to in paragraph 3 are approved and shall be executed in the name and on behalf of the City by the Mayor and the City Clerk or the officers authorized to act on behalf o the foregoing officers, 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 3 • CITY of ORONO RESOLUTION OF THE CITY COUNCIL NO. ' 5461 by the execution thereof. The Notes shall be executed as provided by the Loan Agreement. The Notes shall contain a recital that they are issued pursuant to the Act and such recital shall be conclusive evidence of their validity and the regularity of their issuance. The Notes are designated as qualified tax exempt obligations for purposes of Section 265(b)(3) of the Internal Revenue Code. 7. Certifications. The officers of the City are authorized and directed to prepare and furnish to bond counsel, to the Borrower, to the Lenders and to counsel for the Borrower and the Lenders, certified copies of all proceedings and records of the City relating to the Project and the Notes, 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 trust of all statements contained therein. Adopted by the City Council of the City of Orono, Minnesota, at a regular meeting held May 8, 2006. ATTEST: Linda S. Vee, City Clerk :11 Barbara A. Peterson, Mayor