Title
Resolution Authorizing the Issuance and Sale of Conduit Revenue Bonds of the HRA and the City of Minneapolis on behalf of Children’s Health Care, located at 345 North Smith Avenue, and the Execution of Documents, District 9, Ward 2
Body
WHEREAS, this Board of Commissioners (the “Board”) of the Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the “HRA”) has received a proposal from Children’s Health Care, a Minnesota nonprofit corporation (the “Borrower”) that the HRA and the City of Minneapolis, Minnesota (“Minneapolis”) acting jointly (Minneapolis and the HRA are together referred to as the “Joint Issuers”) issue conduit revenue bonds under Minnesota Statutes, Sections 469.152 to 469.165, as amended (the “Act”), in one or more tax-exempt series or subseries on behalf of the Borrower (the “Bonds”); and
WHEREAS, at a public hearing, duly noticed and held by the Board on the date hereof (December 11, 2024), on the proposal to finance and refinance the costs of the project described hereinafter, all parties who appeared at the hearing were given an opportunity to express their views with respect to the proposal, and interested persons were given the opportunity to submit written comments to the HRA before the time of the hearing; and
WHEREAS, on the date hereof, the City Council of the City of Saint Paul, Minnesota (the “City”), will, as the applicable elected official, consider a resolution approving the public hearing held by the Board on the Bonds and the Project in accordance with the Act and Section 147(f) of the Internal Revenue Code of 1986, as amended (the “Code”); and
WHEREAS, the Borrower has represented to this Board that each governmental entity required by the Code and Minnesota Statutes, Section 471.656, as amended, to hold a duly noticed public hearing with respect to the issuance of the Bonds and approve the issuance thereof, has done or will do so; and
WHEREAS, pursuant to Section 469.155, subdivision 9 of the Act and Minnesota Statutes, Section 471.59, as amended, the Joint Issuers previously entered into a Joint Powers Agreement, dated October 23, 2020 (the “Original Joint Powers Agreement”), to jointly or cooperatively exercise their common power of financing and refinancing projects under the Act; and
WHEREAS, pursuant to the Act and the Original Joint Powers Agreement, the Joint Issuers issued their Health Care Facilities Variable Rate Revenue Refunding Bonds (Children’s Health Care), Series 2020A (the “Series 2020A Bonds”) to finance a project under the Act; and
WHEREAS, the Bonds are proposed to be issued pursuant to a Joint Powers Agreement between Minneapolis and the HRA (the “Joint Powers Agreement”), a draft of which is on file with the Executive Director of the HRA and which has been reviewed to the extent deemed necessary; and
WHEREAS, at the request of the Borrower and pursuant to the Act, the HRA has prepared an application (the “DEED Application”) for submission to the Department of Employment and Economic Development following the completion of the public hearing, for approval of the Project (as hereinafter defined); and
WHEREAS, the Joint Issuers, the Borrower and J.P.Morgan Securities LLC and Piper Sandler & Co., the original purchasers of the Bonds (the “Underwriters”), have agreed upon sufficient details of the Bonds to enable the HRA to adopt this resolution (the “Resolution”) on this date.
NOW, THEREFORE, BE IT RESOLVED by the Board of the HRA, as follows:
1. Proposal. The Board has received a proposal from the Borrower that the HRA and Minneapolis jointly issue the Bonds and loan the proceeds thereof to the Borrower to, pursuant to the Act and the Joint Powers Agreement: (i) refund the Series 2020A Bonds, and (ii) finance a project consisting of (a) the acquisition of an electronic medical records system; (b) improvements to the Borrower’s facilities located at 345 North Smith Avenue and adjacent facilities in the City, including acquisition of capital equipment and improvements to the Garden View medical building, the pharmacy and emergency department; (c) improvements to the Borrower’s facilities located at 2525 Chicago Avenue in Minneapolis consisting of emergency room improvements; electrical system improvements; improvement of the cardiac catheterization lab, parking ramp improvements, acquisition of capital equipment and acquisition of adjacent land; (d) improvements to clinic facilities located at 6050 Clearwater Drive in the City of Minnetonka, Minnesota; and (e) the acquisition of information technology equipment to be located at 5901 Lincoln Drive in the City of Edina (collectively, the “Project”)
2. Structure of Bonds. Pursuant to a Loan Agreement for each series of Bonds (each a “Loan Agreement”), to be entered into between Minneapolis, the HRA and the Borrower, drafts of which are on file with the HRA Executive Director , the proceeds of the Bonds will be loaned by the Joint Issuers to the Borrower (the “Loan”), and the Borrower will agree to issue to the Joint Issuers an Obligation with respect to each series or subseries of Bonds (the “Obligations”). The Obligations will be issued under the Master Trust Indenture (the “Master Indenture”), dated as of September 1, 1995, between the Borrower and U.S. Bank Trust Company, National Association, as trustee (the “Master Trustee”), as supplemented and amended by supplemental indentures thereto (collectively, the “Supplemental Indentures”) to be entered into between the Borrower and the Master Trustee, drafts of which are on file with the HRA Executive Director. Under the Obligation with respect to each series or subseries of Bonds, the Borrower will unconditionally agree to repay the Loan made by the Joint Issuers under the Loan Agreement with respect to such series of Bonds in specified amounts and at specified times sufficient to make the necessary payments of principal of, premium, if any, and interest on the Bonds of such series or subseries, when due. In addition, the Loan Agreement with respect to such series of Bonds contains provisions relating to the payment by the Borrower of administrative costs of the Bond Trustee (as hereinafter defined), the administrative fees of the Joint Issuers with respect to such series of Bonds, and any other costs, fees and expenses related to indemnification, insurance, legal, and other agreements and covenants which are required by the Act or which are permitted by the Act and which the Joint Issuers and the Borrower deem necessary or desirable for the sale of such Bonds.
Pursuant to a Trust Indenture for each series of Bonds (each a “Bond Indenture”) to be entered into between the Joint Issuers and U.S. Bank Trust Company, National Association, as bond trustee (the “Bond Trustee”), drafts of which are on file with the HRA Executive Director, the Joint Issuers will assign and pledge all of their right, title and interest in the Loan Agreement with respect to such Bonds (other than the rights specifically retained by the Joint Issuers including, but not limited to, rights to indemnification and administrative fees and expenses), the Obligation with respect to such series or subseries of Bonds, the Master Indenture and the Supplemental Indentures to the Bond Trustee. In addition, the Bond Indenture for each series of Bonds, among other things, sets the interest rates, maturity dates and redemption provisions for such series of Bonds, establishes the various funds and accounts for the deposit and transfer of money and contains other provisions which are required by the Act or which are permitted by the Act and which the Joint Issuers and the Borrower deem necessary or desirable in connection with the sale of such series of Bonds.
The Bonds are proposed to be offered for sale to the public pursuant to one or more Official Statements (together, the “Official Statements”) and sold to the Underwriters pursuant to a Purchase Contract with respect to such series of Bonds, which includes an attached Letter of Representation and Indemnification (each, a “Bond Purchase Agreement”), by and among the Joint Issuers, the Borrower, and the Underwriters, drafts of which are on file with the HRA Executive Director.
3. Forms of Documents. Forms of the following documents, in substantially final form, are on file with the HRA Executive Director:
(a) the Loan Agreements;
(b) the Obligations (not to be executed by the Joint Issuers);
(c) the Master Indenture (not to be executed by the Joint Issuers);
(d) the Supplemental Indentures (not to be executed by the Joint Issuers);
(e) the Joint Powers Agreement;
(f) the Bond Indentures;
(g) the Bond Purchase Agreements;
(h) the Official Statements; and
(i) the DEED Application.
4. Findings. It is hereby found, determined and declared that:
(a) the purpose of the Project, and the effect thereof will further the proposed policies of the Act and promote the public welfare by providing for the continuation of the health care operations of the Borrower in Minneapolis, the City, and the surrounding area;
(b) the Act authorizes the refunding of the Series 2020A Bonds, the Project to be financed and refinanced by the Bonds, the issuance and sale of the Bonds, the execution and delivery by the HRA of the Joint Powers Agreement, Loan Agreements, Bond Purchase Agreements and Bond Indentures (collectively, the “Bond Documents”), the performance of all covenants and agreements of the HRA contained in the Bond Documents, and 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 Bonds valid and binding obligations of the HRA in accordance with their terms;
(c) it is desirable that the Bonds be issued by the Joint Issuers upon the terms set forth in the Bond Indentures;
(d) the payments under the Loan Agreements and Obligations 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 Bond Indentures when due, and the Loan Agreements and Bond Indentures also provide that the Borrower is required to pay all expenses of the operation and maintenance of the facilities to be financed or refinanced by the Bonds, 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 premises of said facilities and payable during the term of the Loan Agreements and Bond Indentures; and
(e) under the provisions of the Act, and as provided in the Loan Agreements and Bond Indentures, the Bonds are not to be payable from or charged upon any funds other than the revenue pledged to the payment thereof; the HRA and the City are not subject to any liability thereon; no holder of any Bond shall ever have the right to compel any exercise by the HRA or the City of its or their 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 or the HRA except the interests of the HRA and the City in the Loan Agreements and the Obligations which will be assigned to the Bond Trustee under the Bond Indentures; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the HRA or the City except the interests of the HRA and the City in the Loan Agreements and the Obligations which will be assigned to the Bond Trustee under the Bond Indentures; the Bonds shall recite that the Bonds do not constitute or give rise to a pecuniary liability or moral obligation of the HRA, the City, Minneapolis, the State of Minnesota or their political subdivisions, and that the Bonds, including interest thereon, are payable solely from the revenues pledged to the payment thereof; and that the Bonds shall not constitute a debt of the HRA or the City within the meaning of any constitutional or statutory limitation.
5. Approval of Forms; Execution. Subject to the approval of the St. Paul City Attorney Office, Ballard Spahr LLP, as counsel to the City and the HRA and the provisions of paragraphs 7 and 9 hereof, and subject to completion of all necessary host approvals with respect to the issuance of the Bonds, the forms of the Bond Documents and exhibits thereto, the DEED Application and all other documents listed in paragraph 4 hereof are approved substantially in the form submitted. The Bond Documents and the DEED Application, in substantially the forms submitted, are directed to be executed in the name and on behalf of the HRA by the Chair or Commissioner, Executive Director, and Director, Office of Financial Services, or their appropriate designee (the “HRA Officials”). The Bond Purchase Agreements may be executed on behalf of the HRA by the Executive Director. Any other HRA documents and certificates necessary to the transaction described above shall be executed by the appropriate HRA Officials, or their designee. 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 Agreements and the Bond Indentures. The HRA may execute documents, certificates, and instruments relating to the issuance of the Bonds by electronic signature. For purposes hereof: (i) “electronic signature” means a manually signed original signature that is then transmitted by electronic means; and (ii) “transmitted by electronic means” means sent in the form of a facsimile or sent via the internet as a portable document format (“pdf”) or other replicating image attached to an electronic mail or internet message; or (iii) a digital signature of an authorized representative of any party provided by AdobeSign or DocuSign (or such other digital signature provider as specified by such party).
6. Official Statement. The HRA hereby consents to the preparation and lawful distribution of the Official Statements, in substantially final form on file with the HRA Executive Director, with such changes, insertion and omissions therein as may be necessary and required, including any amendments or supplements thereof, with respect to the Bonds to brokers, dealers and other potential purchasers of such Bonds, provided that it is understood that the HRA has relied upon the Borrower and the Underwriters and legal counsel retained by them to assure the accuracy and completeness of the information set forth in the Official Statements, including any amendments or supplements thereto, and that therefore the HRA has not and will not make any independent investigation of the information contained therein, and the HRA has not and will not confirm, and assumes no responsibility for, the accuracy, sufficiency, fairness or completeness of such information, other than the information with respect to the HRA under the headings “The Issuer—The HRA” and “Litigation—the Issuer—the HRA.”
7. Issuance; Acceptance of Offer. The HRA, jointly with Minneapolis, shall proceed forthwith to issue the Bonds, in the form and upon the terms set forth in the Bond Indentures and this Resolution, but only if the Bonds when issued are rated by one or more nationally recognized rating agencies at least at investment grade or are privately placed in accordance with the HRA’s policies. The Bonds shall be issued in an aggregate principal amount not to exceed $221,000,000, shall be payable or prepayable at such time or times, shall bear interest at such rate or rates, shall be purchased by the Underwriters at such price and shall be subject to such other terms and conditions as the HRA Officials, Minneapolis, the Borrower and the Underwriters shall agree to, which agreement with respect to the Bonds shall be deemed to have been made upon execution of the Bond Purchase Agreements by the applicable HRA Official and applicable Minneapolis officials, provided that the Bonds mature no later than twenty (20) years from the date of issuance thereof and provided that no initial interest rate exceeds 6.0% per annum. The HRA Officials are hereby authorized and directed, in conjunction with the appropriate officers of Minneapolis, to prepare and execute the Bonds as prescribed in the Bond Indentures and to deliver them to the Bond Trustee for authentication and delivery to the Underwriters.
8. Records and Certificates. The HRA Officials are authorized and directed to prepare and furnish to the Underwriters certified copies of all proceedings and records of the HRA 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 known to them, and all such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute representations of the HRA 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 by the St. Paul City Attorney Office, counsel to the HRA and by the HRA Officials authorized herein to execute or accept, as the case may be, said documents prior to their execution; and said HRA Officials are hereby authorized to approve said changes on behalf of the HRA. The execution of any instrument by the appropriate HRA Official herein authorized shall be conclusive evidence of the approval of such document in accordance with the terms hereof. In the event of absence or disability of the HRA Officials, any of the documents authorized by this Resolution to be executed may be executed without further act or authorization of the Board by any member of the Board or any duly designated acting official, or by such other officer or officers of the Board as approved by the St. Paul City Attorney Office, may act on their behalf.
10. Future Amendments. The authority to approve, execute and deliver future amendments to financing documents entered into by the HRA in connection with the issuance of the Bonds and consents required under such financing documents is hereby delegated to the Executive Director and Director, Office of Financial Services, subject to the following conditions: (a) such amendments or consents do not require the consent of the holders of the Bonds; (b) such amendments or consents do not materially adversely affect the interests of the HRA; (c) such amendments or consents do not contravene or violate any policy of the HRA, and (d) such amendments or consents are acceptable in form and substance to the counsel retained by the HRA to review such amendments. The authorization hereby given shall be further construed as authorization for the execution and delivery of such certificates and related items as may be required to demonstrate compliance with the agreements being amended and the terms of this Resolution. The execution of any instrument by the Executive Director and Director, Office of Financial Services, shall be conclusive evidence of the approval of such instruments in accordance with the terms hereof. In the absence of the Executive Director or Director, Office of Financial Services, any instrument authorized by this paragraph to be executed and delivered may be executed by the officer of the HRA or the City authorized to act in their place and stead.
11. 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 the Bond Indentures or Loan Agreements.