BY COUNCILOR GILBERT:
BE IT RESOLVED, by the city council of the city of Duluth, St. Louis County, Minnesota (the city), as follows:
(a) General recitals.
(1) The city wishes to promote the welfare of the state of Minnesota (the state) by the active promotion, attraction, encouragement and development of economically sound industry and commerce through governmental action to prevent, so far as possible, the emergence of blighted and marginal lands and areas of chronic unemployment;
(2) Factors necessitating the active promotion and development of economically sound industry and commerce are the increasing concentration of population in the metropolitan areas and the rapidly rising increase in the amount and cost of governmental services required to meet the needs of the increased population and the need for development of land uses which will provide access to employment opportunities for such population;
(b) Description of the project. Residential Services of Northeastern Minnesota, Inc. (the borrower), located at 1309 Rice Lake Road in Duluth, Minnesota, a Minnesota nonprofit corporation and organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the code) has proposed issuance of revenue obligations, in one or more series, in an amount not to exceed $1,000,000 (the obligations) by the city of Pine City (the issuer), to refinance debt incurred for the acquisition and equipping of, and finance capital improvements to, the four-bed adult foster care facilities located at 124 North 19th Avenue East in Duluth, Minnesota; 1135 Seventh Street Southwest in Pine City, Minnesota; 530 Watkins in Mora, Minnesota; 6701 Main Street in North Branch, Minnesota; and 805 - 24th Avenue Southwest in Cambridge, Minnesota (the project), a portion of which is located in the city, and paying costs associated with the financing;
(c) Recitals relating to the joint exercise of powers.
(1) Portions of the project are located in the city, the issuer and the cities of North Branch, Mora and Cambridge, Minnesota (collectively, and including the issuer and the city, the host cities);
(2) The borrower has requested that the host cities cooperate through a joint powers agreement in authorizing the financing of the project through the issuance of the obligations by the issuer;
(3) A draft copy of the joint powers agreement among the host cities (the joint powers agreement) has been submitted to the council and is on file in the office of the clerk;
(d) Recital of representations made by the borrower.
(1) The city has been advised by representatives of the borrower that:
(A) Conventional financing is available only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the project would be significantly reduced;
(B) On the basis of information submitted to this council by the borrower and their discussions with representatives of area financial institutions and potential buyers of tax-exempt bonds, the obligations could be issued and sold upon favorable rates and terms to finance the project;
(C) The borrower will experience a significant debt service cost savings as a result of the project;
(D) The project would not be undertaken in its present form but for the availability of financing under the act;
(2) The borrower has agreed to pay any and all costs incurred by the city in connection with the issuance of the obligations, whether or not such issuance is carried to completion;
(3) The borrower has represented to the city that no public official of the city has either a direct or indirect financial interest in the project nor will any public official either directly or indirectly benefit financially from the project;
(e) Public hearing.
(1) The city council has, on December 6, 2004, held a public hearing on the proposal to undertake and finance, through the issuance of the obligations by the issuer, the portion of the project located within the jurisdictional limits of the city, at which all those appearing who desired to speak were heard and written comments were accepted;
(f) Findings. It is hereby found, determined and declared that, on the basis of information made available to this council by the borrower it appears, and this council hereby finds, that: the project would not be undertaken but for the availability of financing under the act and the willingness of the issuer to furnish such financing; and the effect of the project, if undertaken, will be to: help prevent unemployment, provide the range of service and employment opportunities required by the population, and provide adequate adult foster care services to residents of the city at a reasonable cost;
(g) Approvals; execution of joint powers agreement; preconditions.
(1) The proposal to undertake and finance that portion of the project located in the city but outside of the jurisdictional limits of the other host cities, and the issuance of the obligations by the issuer are hereby given approval by the city subject to:
(A) The approval of the project by the department of employment and economic development of the state (DEED);
(B) Approval of the joint powers agreement by each of the other host cities;
(C) Approval of the issuance of the obligations by the issuer;
(2) The joint powers agreement is hereby made a part of this resolution as though fully set forth herein and is hereby approved in substantially the form presented to the city council. The mayor, the clerk or the authorized designee of any of the foregoing are authorized and directed to execute, acknowledge and/or deliver the joint powers agreement on behalf of the city with such changes, insertions and omissions therein as the city attorney may hereafter deem appropriate, such execution to be conclusive evidence of approval of such document in accordance with the terms hereof;
(3) The mayor, the clerk or the authorized designee of any of the foregoing are authorized and directed to execute and deliver such other documents or certificates needed from the city for the sale of the obligations;
(h) Limited obligation. The obligations, when and if issued for the project, shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the host cities. (There will, however, be a charge, lien or encumbrance on the project, which is not an asset of the host cities.) The obligations, when and if issued, shall recite in substance that the obligations, and the interest thereon, are payable solely from revenues received from the project and property pledged for payment thereof, and shall not constitute a debt of the host cities;
(i) Payment of city’s administrative fee and costs. The issuance of the obligations and the approvals given in this resolution are subject to the agreement by the borrower that it 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 obligations by the issuer, whether or not the project is carried to completion or the obligations are issued;
(j) Ratification. The actions of the clerk taken with respect to causing the notice of public hearing, in the form on file in the office of the clerk as Public Document No. _____________, to be published in the official newspaper of the city and a newspaper of general circulation in the city not less than 14 days prior to the hearing are ratified and confirmed in all respects.
STATEMENT OF PURPOSE: This resolution approves the issuance and sale by the city of Pine City, Minnesota, of a revenue note, Series 2004 (Residential Services of Northeastern Minnesota project) and authorizes the execution of a joint powers agreement which allows such issuance. Residential Services of Northeastern Minnesota has requested this action by the city of Duluth to assure that the obligations to be issued will be bank-qualified under the applicable provisions of the Internal Revenue Code of 1986, as amended.