HomeMy WebLinkAbout1998-08-05 PACKET 06.B.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA
MEETING ITEM #
DATE 8/5/98 (p • � •
PREPARED BY Eco�omic Dev. Authority Kirsten Barsness
ORIGINATING DEPARTMENT STAFF AUTHOR
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COUNCIL ACTION REQUEST
Hold public hearing to approve Yhe joint powers agreement for the refinancing of bonds issued
by Ailina Fiealth Systems.
BUDGET IMPLICATION $ $
BUDGETED AMOUNT ACTUAL AMOUNT FUNDING SOURCE
SUPPORTING DOCUMENTS
� MEMO/LETTER: Memo from Kirstin Barsness dated July 29, 1998.
� RESOLUTION: Draft.
❑ ORDINANCE:
❑ ENGINEERING RECOMMENDATION:
❑ LEGA� RECOMMENDATION:
� OTHER: Draft Joint Powers Agreement.
ADMINISTRATORS COMMENTS:
Our recommendation is for approval contin ent on ayme of all City costs, fees, and
charges.
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City Administrator Date
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COUNCIL ACTION TAKEN: ❑ APPROVED ❑ DENIED ❑ OTHER
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To: Honorabie Mayor and City Council �,�n .4�
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From: Kirstin Barsness, Economic Developme irector
Date: 07/29/98
Re: Ailina Heaith System Bond Refinance
INTRODUCTION
The City Council shouid hold the public heanng to approve the joint powers
agreement for the refinancing of bonds issued by Rliina Health Systems.
DISCUSSION
In her memorandum date July 9, 1998 on this topic, Finance Director Liz Johnson
expiained the request, the process and the impacts. To recap: In 1996, Ailina Health
Systems buiit Ginic facilities in Forest Lake, Eagan and Cottage Grove. The site in
Cottage Grove was financed through the issuance of revenue bonds by the City of
Woodbury.
Ailina Health Systems is currently proposing a$150,000,000 bond issue to refinance
the bonds issued in 1996 and to construct and improve ott�er facilities. The Cottage
Grove site will be aliocate $4,1000,000 which will inGude equipment, fumiture and
the refinance of the original $3,900,000 bond issue. Communities irnpacted by the
refinance include Cottage Grove, Buffalo, Coon Rapids, Eagan, Forest Lake, and
Woodbury. Also affected are Anoka and Ramsey Counties and the North Suburban
Hospitai. Each errtity is requested to hold a public hearing and execute a joint
pow�rs agreemerrt to approve the project within their borders. The bond issuers wili
be the Cj,ty of Minneapolis and the Housing and Redevelopment Authonty of the City
of St. Paul.
The public hearing is to gamer atizen input and to comply with Minnesota Statute
469.152. The joint powers agreement is necessary to formally approve the project
within the city borders and consent to the bond issue. Representatives from River
Valley Clinic, Allina's business office and an underwriter may be present.
FINANCIAL IMPACTS
Due to the nature of revenue bonds, the City of Cottage Grove will not be obligated
for the refinanas bond issue.
ACTION REQUESTED
The City Gouncil should hold the public hearing and pass the resolution authorizing
the signing of the joint powers agreement.
ATTACHMENTS
1. Resolution providing for issuance of revenue bonds.
2. Joirrt Powers Agreement.
RESOLUTION
RESOLUTION PROVIDING FOR ISSUANCE OF REVENUB BONDS BY THE CITY OF
MINNEAPOLIS AND TI-IE HOUSING AND REDEVELOPMENT AUTHORITY OF TF�
CITY OF SAINT PAUL FOR ALLINA HEALTH SYSTEM, PURSUANT TO A JOINT
POWERS AGREEMENT TO BE ENTERED INTO IN CONNECTION THEREWITH
WHEREAS, Allina Health System, a Minnesota nonprofit corporation (the
"Corporation"), has requested that the City of Minneapolis and the Housing and
Redevelopment Authority of the City of Saint Paul, Minnesota (together, the "Issuer") jointly
issue Revenue Bonds (Allina Health System) Series 1998A (the "Bonds"), in an original
principal amount not to exceed approximately $150,000,000; and
WHEREAS, the Corporation intends to use the proceeds from the sale of the proposed
Bonds to finance certain capital improvements (the "Project") and to refund certain revenue
obligations (the "Prior Bonds") as described in the Joint Powers Agreement (defined below),
and
WHEREAS, a portion of the Bonds (the "Local Portion") would be issued to finance
certain capital improvements, including acquisition and installation of equipment and to refund
the portion of the Prior Bonds originally issued by the City of Woodbury to finance capital
improvements in this City at the health care facilities located at 8611 West Point Douglas Road
South, Cottage Grove which is or will be owned and operated by the Corporation (or an
affiliated nonprofit entity controlled or under common control with the Corporation); and
WHEREAS, the aggregate face amount of the Bonds will not exceed approximately
$150,000,000, with approximately $4,100,000 thereof constituting the Local Portion.
WHEREAS, the Corporation requests that this Ciry enter into a 7oint Powers Agreement
in substantially the form on file with the City (the "Joint Powers Agreement"), with the Issuer
and other political subdivisions named therein, whereby this City and the other jurisdictions
would consent to the issuance of the proposed Bonds by the City of Minneapolis and the
Housing and Redevelopment Authority of the City of Saint Paul; and
WHEREAS, the City conducted a public hearing on August 5, 1998, on the proposal to
refund the Prior Bonds and the Project; and
WHEREAS, the City is authorized pursuant to Minnesota Statutes, Section 4'71.59 (the
"Joint Powers Act"), to enter into agreemenu to jointiy or cooperatively exercise any power
common to the contracting parties, and may provide for the exercise of such power by one of
the participating governmental units on behalf of the other participating units; and
WHEREAS, in connection with revenue bonds issued under Minnesota Statutes,
Sections 469.152 to 469.1651 (the "AcY'}, Section 469.155, Subd. 9 provides for
intergovernmental agreements between municipalities and political subdivisions relating to the
financing of projects under the Act;
WHEREAS, providing adequate health care services to the residents of the State is a
public purpose under the Act and Section 469.155, Subd. 2 permits revenue bonds to be issued
for a project meeting the public purpose within the state and Section 469.155, Subd. 12 permits
revenue bonds to be issued by any municipality or redevelopment agency to refund revenue
bonds issued by another municipality or redevelopment agency with the consent of the original
issuer;
NOW, THEREFORE, BE IT RESOLVED, THAT:
1. The portion of the Project to be located in this City and the issuance of Bonds by
the Issuer for the pwposes of financing the Project and tf�e refunding of the Prior Bonds are
hereby approved for purposes of the Section 147(� of the Intemal Revenue Code of 1986 and
this City hereby consents to the issuance of the Bonds for purposes of the Act.
2. The form of the Joint Powers Agreement, is hereby approved and the Joint
Powers Agreement, in substantially such form, and subject to such modifications thereto as
shall be approved by the officer or officers executing the same, which approval shall be
conclusively evidenced by the execution thereof, shall be executed and delivered by one or
more officers of the City.
Adopted this _ day of , 1998.
M ] 393964.01
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JOINT POWERS AGREEMENT
This Joint Powers Agreement ("Agreement"}, dated as of September 1, 1948,
is by and betweemthe City of Minneapolis and the Housing and Redevelopment Authority of
the City of Saint Paul, Minnesota (together the "Issuer") and other jurisdictions namely, the
City of Buffalo, City of Coon Rapids, City of Cottage Grove, City of Eagan, City of Forest
Lake, North Suburban Hospital District, Anoka and Ramsey Counties (the "Hospital
District"), and City of Woodbury, (the Municipality and the other jurisdictions, collectively,
the "Other Jurisdictions").
RECTTALS
WHEREAS, Minnesota Statutes, Section 471.59 {the "Joint Powers Act"),
provides that two or more governmental units, by agreement entered into through action of
their governing bodies, may jointly or cooperatively exercise any power common to the
convacting parties;
WHEREAS, in connection with revenue bonds issued under Minnesota
Statvtes, Sections 469.152 to 469.1651 (the "Industrial Development Act"), Section 469. I55,
Subd. 9 provides for intergovernmental agreements between municipalities and political
subdivisions relating to the financing of projects under the Industrial Development Act;
WHEREAS, the Issuer and the Other Jurisdictions are "governmental units"
under the Joint Powers Act, and (except for the Hospital District) are "municipalities" under
the Industrial Development Act with power to issue bonds under the Industrial Development
Act;
WFiEREAS, the Hospital District is a political subdivision but not a
"municipality" as defined in the Industrial Development Act and is not authorized to issue
bonds under Industrial Development Act;
WHEREAS, the projects to be financed and the projects to be refinanced by
the refunding of the Prior Bonds, as described in the Appendix hereto and in the Loan
Agreement (defined below) each constitute a"project" within the meaning of Section
469. I 53, Subd. 2(d) of the Industrial Development Act;
WHEREAS, it has been proposed that the Issuer issue revenue bonds to
finance the Project and to refund the Prior Bonds with the consent of the original issuers of
the Prior Bonds as required by Section 469.155, Subdivision 12 of the Industrial
Development Act and the Joint Powers Act;
WHEREAS, the Bonds shall not constitute an indebtedness or pledge the full
faith and credit of the Issuer, the Uther Jurisdictions, the State of Minnesota, or any other
agency or political subdivision thereof, but shall be payable solely from the revenues pledged
and assigned thereto pursuant to the Bond Indenture (as defined below); and
WHEREAS, the governing bodies of the Issuer and the Other Jurisdictions
have authorized the execution and delivery of this Agreement and consented to the issuance
of Bonds as contemplated herein;
NOW, T'F�REFORE, the Issuer and the Other Jurisdictions hereby agree as
follows:
1. In order to refund the Prior Bonds and to finance the Project, the Issuer
shaiJ issue revenue bonds (the `Bonds") in the amount of $ , pursuant to
the Joint Powers Act, the Industrial Development Act, and the terms of a Trust Indenture (the
"Bond Indenture") to be entered into between the Issuer and the corporate trustee named
therein. The proceeds of the Bonds will be loaned to Allina Health System (the "Borrower")
pursuant to a Loan Agreement (the "Loan Agreement") between the Issuer and the Borrower.
2. The City of Buffalo has approved the portion of the Project to be
located within its boundaries and consented to the issuance of Bonds by the Issuer to provide
financing thereof, after a public hearing as required by Section 147(fj of the Intemal
Revenue Code of 1486, as amended. The City of Buffalo shall not be a party to the Bond
Indenture, the Loan Agreement or any other document, other than this Agreement, in
connection with the Bonds, and shall have no obligation to any person with respect to the
Bond Indenture, the Loan Agreement or the Bonds.
3. The City of Coon Rapids has approved the portion of the Project to be
located within its boundazies and consented to the issuance of Bonds by the Issuer to provide
financing thereof, after a public hearing as required by Section 147(fl of the Intemal
Revenue Code of 1986, as amended. The City of Coon Rapids shall not be a party to the
Bond Indenture, the Loan Agreement or any other document, other than this Agreement, in
connection with the Bonds, and shall have no obligation to any person with respect Yo the
Bond Indenture, the Loan Agreement or the Bonds.
4. The City of Cottage Grove has approved the portion of the Project to be
located within its boundaries and consented to the issuance of the Bonds by the Issuer to
provide financing thereof and to refund the portion of the Prior Bonds originally issued by
the City of Woodbury to finance a project located within its boundazies, after a public
hearing as required by Section l47(� of the Intemal Revenue Code of 1986, as amended.
The City of Cottage Grove shall not be a pariy to the Bond Indenture, the Loan Agreement or
any other document, other than this Agreement, in connection with the Bonds, and shall have
no obligation to any person with respect to the Bond Indenture, the Loan Agreement or the
Bonds.
5. The City of Eagan has approved the portion of the Project to be
located within its boundazies and consented to the issuance of the Bonds by the Issuer to
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provide financing thereof and to refund the portion of the Prior Bonds originally issued to
finance a project located within its boundaries, after a public hearing as required by Section
147(� of the Internal Revenue Code of 1986, as amended. The City of Eagan shall not be a
party to the Bond Indenture, the Loan Agreement or any other document, other than this
Agreement, in connection with the Bonds, and shall have no obligation to any person with
respect to the Bond Indenture, the Loan Agreement or the Bonds.
6. The City of Forest Lake has approved the portion of the Project to be
located within its boundazies and consented to the issuance of the Bonds by the Issuer to
provide financing thereof and to refund the portion of the Prior Bands originally issued to
finance a project located within its boundaries, after a public hearing as required by Section
147( fl of the Internal Revenue Code of 1986, as amended. The City of Forest Lake shall not
be a party to the Bond Indenture, the Loan Agreement or azry other document, other than this
Agreement, in connection with the Bonds, and shall have no obligation to any person with
respect to the Bond Indenture, the Loan Agreement or the Bonds.
7. The Hospital District has approved the Project to be located within its
boundaries and consented to the issuance of the Bonds by the Issuer to provide financing
thereof, after a public hearing as required by Section 147(� of the Internal Revenue Code of
1986, as amended. The Hospital District shall not be a party to the Bond Indenture, the Loan
Agreement or any other document, other than this Agreement, in connection with the Bonds,
and shall have no obligation to any person with respect to the Bond Indenture, tt�e Loan
Agreement or the Bonds.
8. The City of Woodbury has approved the portion of the Project to be
located within its boundaries and consented to the issuance of the Bonds by the Issuer to
provide financing thereof and to refund the portion of the Prior Bonds originally issued by
the City of Woodbury to finance a project located within the boundazies of the City of
Cottage Grove, after a public heazing as required by Section 14'7( fl of the Internal Revenue
Code of 1986, as amended. The City of Woodbury shall not be a party to the Bond
Indenture, the Loan Agreement or any other document, other than this Agreement, in
connection with the Bonds, and shall have no obligation to any person with respect to the
Bond Indenture, the Loan Agreement or the Bonds.
9. The liability of the Issuer and the Other 7urisdictions with respect to the
Bonds shall be limited as provided in the Industrial Development Act and in the Bond
Indenture. Except to the extent specifically provided herein, the Issuer and the Other
Jurisdictions shall not incur any obligations or liabilities to each other as a result of the
refunding of the Prior Bonds or financing or use of the Project by the Borrower. T'he Bonds
shall be speciat, limited obligations of the Issuer payable solely from proceeds, revenues and
other amounts pledged thereto and more fully described in the Bond Indenture. The Bonds
and the interest thereon shall neither constitute nor give rise to a pecuniary liability, general
or moral obligation or a pledge of the full faith or loan of credit of the Issuer, the Other
Jurisdictions, the State of Minnesota or any political subdivision of the above, within the
meaning of any constitutional or statutory provisions.
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10. All costs incurred by the Issuer and the Other Jurisdictions in the
authorization, execution, delivery and performance of this Agreement shall be paid by the
Borrower.
ll. Any property acquired as a result of this Agreement shall be and
remain the property of the Issuer, jointly, to be disposed of pursuant to the terms of the Loan
Agreement and the Bond Indenture. Any surplus moneys remaining after the purpose of this
Agreement has been completed, unless otherwise provided for in the Bond Indenture or Loan
Agreement shall belong to the Issuer, jointly.
12. This Agreement may not be terminated by any party so long as any
Bonds aze Outstanding (as defined in the Bond Indenture).
13. This Agreement may be amended by the Issuer and the Other
7urisdictions at any time. No amendment may impair the rights of the holders of the Bonds,
unless they have consented to such amendment in the manner provided for an amendment of
the Bond Indenture.
14. This Agreement may be executed in several counterparts, each of
which shall be regarded as an original and all of which shall constitute but one and the same
Agreement.
Ii� WITNESS WHEREOF, duly authorized officers of the Issuer and the Other
Jurisdictions have executed this Agreement as of the date set for[h above but actually on the
day of , 1998.
(Seal)
Attest:
City Clerk
M1:392158.0t
CITY OF MINNEAPOLIS
By
Mayor
Countersigned:
By
Finance Off`icer
[Signature page to Joint Powers Agreement]
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(SEAL)
CITY OF COTTAGE GROVE
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Attest:
Mayor
City Administrator
[Signature page to Joint Powers Agreement]
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