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Home My WebLink AboutVI-09 - Consent to and Approving Issuance of Revenue Obligations - YMCA City Council Memorandum To: Mayor Hicks & City Councilmembers From: John Hinzman, Community Development Director Date: November 19, 2018 Item: Resolution: Consent to and Approve Issuance of Revenue Obligations - YMCA City Council Action Requested: The City Council is asked to adopt the attached resolution pertaining to a debt issuance by the YMCA of the Greater Twin Cities that would take the following actions: 1) Approve the refinancing of a Series 2007 Note issued on behalf of the YMCA by the Hastings Housing and Redevelopment Authority (HRA). 2) Consent to issuance of new bonds by the City of White Bear Lake which include refinancing of the outstanding debt of the 2007 issuance by the Hastings HRA. A simple majority is necessary for action. Background Information: On October 16, 2006 the City Council adopted Resolution No. 10-11-06 approving the issuance of a Commercial Development Revenue Note for YMCA of Greater Saint Paul in the amount of $5,000,000 for acquisition and construction of the Hastings YMCA project. The issuance was subsequently divided between a 2006 issuance and a $2,200,000 issuance in 2007 (only the latter is the subject of the refinance and reissuance request). The Hastings HRA took similar action upon adoption of Resolution No. 11- 2006 on November 9, 2006. On January 25, 2007 the $2,200,000 in debt was issued. The YMCA now seeks to refinance the existing 2007 debt along with other projects owned by the YMCA of the Greater Twin Cities and has requested that the City of White Bear Lake issue revenue obligation bonds in the amount of $22,000,000. State Statutes require that the City of Hastings approve the refinancing and consent to the issuance of the new debt. Financial Impact: The 2006 debt authorization is considered as conduit debt, allowing the YMCA to borrow at the City’s bonding rate rather than at a commercial rate; providing the YMCA a cost savings in interest expense. The debt issuance is not considered as direct debt by either the City or HRA; neither entity was liable for repayment of the issuance. The remaining balance on the $2007 bond is $882,742. VI-09 Advisory Commission Discussion: N\A Council Commission Discussion: N\A Attachments:  Resolution  Letter from Kennedy and Graven on behalf of the YMCA  City Council Resolution - October 16, 2006 VI-09 CITY OF HASTINGS DAKOTA COUNTY, MINNESOTA RESOLUTION NO. _________ RESOLUTION CONSENTING TO AND APPROVING THE ISSUANCE BY THE CITY OF WHITE BEAR LAKE OF REVENUE OBLIGATIONS TO REFINANCE A PROJECT ORIGINALLY FINANCED WITH THE PROCEEDS OF REVENUE OBLIGATIONS ISSUED BY THE CITY OF HASTINGS AND TAKING OTHER ACTIONS WITH RESPECT THERETO BE IT RESOLVED by the City Council of the City of Hastings, Minnesota (the “City”), as follows: Section 1. Background. 1.01. The City is authorized by the provisions of Minnesota Statutes, Sections 469.152 through 469.1655, as amended (the “Act”), to issue revenue bonds to finance or refinance, in whole or in part, the costs of the acquisition, construction, reconstruction, improvement, betterment, or extension of projects, including any properties, real or personal, used or useful in connection with a revenue producing enterprise, whether or not operated for profit. 1.02. Pursuant to Minnesota Statutes, Section 471.656, as amended, a municipality is authorized to issue obligations to finance the acquisition or improvement of property located outside of the corporate boundaries of such municipality if the governing body of the city in which the property is located consents by resolution to the issuance of such obligations. 1.03. On January 25, 2007, the Hastings Economic Development and Redevelopment Authority (as successor to the Housing and Redevelopment Authority in and for the City of Hastings, Minnesota) (the “Hastings EDRA”) issued its Commercial Development Revenue Note, Series 2007 (the “Series 2007 Note”), in the original aggregate principal amount of $2,200,000 and loaned the proceeds thereof to the Borrower, as successor to the Young Men’s Christian Association of the Greater Twin Cities, a Minnesota nonprofit corporation doing business as the YMCA of the Greater Twin Cities (the “Borrower”), as successor to the YMCA of Greater Saint Paul, to finance the acquisition, construction, and equipping of an athletic and wellness facility located at 85 Pleasant Drive in the City (the “Hastings Project”). 1.04. The Borrower has proposed that the City of White Bear Lake, Minnesota (the “Issuer”) issue its revenue obligations (the “Bonds”), in one or more series, as taxable or tax‐exempt obligations, in an aggregate principal amount not to exceed $22,000,000, under the provisions of the Act and Minnesota Statutes, Section 471.656, as amended, and loan the proceeds thereof to the Borrower to, among other things, refinance the Hastings Project through the refinancing of the Series 2007 Note. 1.05. The Borrower also intends to use a portion of the proceeds of the Bonds to refinance other facilities owned by the Borrower and located throughout the Minneapolis/Saint Paul metropolitan area. VI-09 544493v1 JAE MN450-6 2 Section 2. Findings; Authorizations and Approvals. 2.01. In accordance with Section 469.155, subdivision 12 of the Act and Minnesota Statutes, Section 471.656, as amended, the City, acting on behalf of the Hastings EDRA, consents to the issuance of the Bonds by the Issuer to, among other things, refinance the outstanding Series 2007 Note, thereby refinancing the Hastings Project, subject to final approval by the governing body of the Issuer, following the preparation of bond documents and a determination by the Issuer to issue the Bonds. 2.03. The Borrower has agreed and it is hereby determined that any and all costs incurred by the City in connection with the refinancing of the Series 2007 Note and the Hastings Project will be paid by the Borrower. 2.03. City staff are authorized and directed to take all other actions necessary to carry out the intent of this resolution. ADOPTED BY THE CITY COUNCIL OF HASTINGS, MINNESOTA, THIS 19TH DAY OF NOVEMBER, 2018. Ayes: Nays: Paul J. Hicks, Mayor ATTEST: Julie Flaten, City Clerk SEAL VI-09 544668v1 JAE MN450-6 Kennedy 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis MN 55402-1458 (612) 337-9300 telephone (612) 337-9310 fax http://www.kennedy-graven.com Affirmative Action, Equal Opportunity Employer & Graven C H A R T E R E D November 13, 2018 John Hinzman, Community Development Director City of Hastings 101 Fourth Street East Hastings, MN 55033 Re: Resolution consenting to the redemption of the Commercial Development Revenue Note, Series 2007, and the refinancing of a project located in the City of Hastings Dear John, On January 25, 2007, the Hastings Economic Development and Redevelopment Authority (as successor to the Housing and Redevelopment Authority in and for the City of Hastings, Minnesota) (the “Hastings EDRA”) issued its Commercial Development Revenue Note, Series 2007 (the “Series 2007 Note”), in the original aggregate principal amount of $2,200,000 and loaned the proceeds thereof to the Young Men’s Christian Association of the Greater Twin Cities, a Minnesota nonprofit corporation doing business as the YMCA of the Greater Twin Cities (the “Borrower”), as successor to the YMCA of Greater Saint Paul, to finance the acquisition, construction, and equipping of an athletic and wellness facility (the “Hastings Project”) located at 85 Pleasant Drive in the City of Hastings, Minnesota (the “City”). The Series 2007 Note was issued in accordance with the provisions of Minnesota Statutes, Sections 469.152 through 469.1655, as amended (the “Act”). Pursuant to Minnesota Statutes, Section 471.656, as amended, a municipality is authorized to issue bonds to finance or refinance a project located in another municipality if the governing body of the municipality in which the project is located consents by resolution to the issuance of the bonds. The Borrower would like to refinance the Project (and other recreational facilities owned and operated by the Borrower and located throughout the Minneapolis/Saint Paul metropolitan area) and has requested that the City of White Bear Lake (the “Issuer”) issue its revenue obligations (the “Bonds”) in the maximum aggregate principal amount of $22,000,000, a portion of the proceeds of which will be used to refinance the outstanding Series 2007 Note. In order for the Issuer to issue the Bonds, the Borrower is requesting that the City Council of the City approve the refinancing of the Series 2007 Note, on behalf of the Hastings EDRA, and consent to the issuance of the Bonds to refinance the Hastings Project. The City Council is being asked to consider the enclosed resolution on November 19, 2018. By adopting the resolution, the City will consent to the issuance of the Bonds by the Issuer to refinance the outstanding Series 2007 Note and refinance the Hastings Project. The enclosed resolution will satisfy the requirements of Section 469.155, subdivision 12 of the Act and Minnesota Statutes, Section 471.656, as amended. If you have any questions on the foregoing, please do not hesitate to contact me. KENNEDY & GRAVEN, CHARTERED Julie Eddington & VI-09 VI-09 VI-09 VI-09