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City Council Resolution 2025-11CITY OF MONTICELLO COUNTY OF WRIGHT STATE OF MINNESOTA RESOLUTION NO.2025-11 RESOLUTION APPROVING AMENDMENTS TO THE REVENUE NOTES (SWAN RIVER MONTESSORI CHARTER SCHOOL PROJECT), SERIES 2017A AND SERIES 2017B AND AUTHORIZING THE REISSUANCE THEREOF NOW THEREFORE, BE IT RESOLVED by the City Council (the "City Council") of the City of Monticello, Wright County, Minnesota (the "City") as follows: Section 1. Recitals. 1.01. On October 2, 2017, the City issued its Educational Facilities Revenue Note (Swan River Montessori Charter School Project), Series 2017A (the "Series 2017A Note"), in the original aggregate principal amount of $1,000,000 and its Educational Facilities Revenue Note (Swan River Montessori Charter School Project), Series 2017E (the "Series 2017B Note," and together with the Series 2017 Notes the "2017 Notes"), in the original aggregate principal amount of $1,225,000, pursuant to Minnesota Statutes, Sections 469.152 through 469.1655, as amended, and a resolution adopted by the City Council on July 10, 2017 (the "Note Resolution"). The City loaned the proceeds of the Series 2017 Notes (the "Loan") to SRCS Building Company, a Minnesota nonprofit corporation (the "Borrower"), pursuant to the terms of a Loan Agreement, dated as of October 2, 2017 (the "Loan Agreement"), between the City and the Borrower. The City assigned its rights to the basic payments and certain other rights under the Loan Agreement to Sherburne State Bank, a Minnesota banking corporation (the "Lender"), pursuant to an Assignment of Loan Agreement, dated as of October 2, 2017 (the "Assignment of Loan Agreement"), between the City, the Borrower and the Lender. The Lender and Swan River Montessori Charter School, a Minnesota nonprofit corporation (the "School") entered into a Pledge and Covenant Agreement, dated as of October 2, 2017, which set forth certain covenants with respect to the Series 2017 Notes. 1.02. The Borrower used the proceeds of the Series 2017 Notes to redeem and prepay outstanding taxable debt of the Borrower which previously financed the acquisition, renovation, construction and equipping of the public charter school buildings and related facilities located 500 and 503 Maple Street in the City (the "Project"). The Project is owned by the Borrower and is leased to Swan River Montessori Charter School, a Minnesota nonprofit corporation (the "School"). 1.03. The Lender has agreed to amend certain terms of the Series 2017 Notes (the "Amendments"), including changes to covenants in the documents related to the Series 2017 Notes, including but not limited to adjustments to the interest rate on the Series 2017 Notes. 1.04. The City has been advised by Kennedy & Graven, Chartered, acting as bond counsel ("Bond Counsel"), that the proposed Amendments constitute a significant modification of the Series 2017 Notes and will cause a "reissuance" of the Series 2017 Notes for tax purposes (the "Reissuance') pursuant to Section 1.1001-3 of the Treasury Regulations promulgated under the Internal Revenue Code of 1986, as amended (the "Code"). For tax purposes, the Series 2017 Notes will be treated as being refunded on the effective date of the Amendments. 1.05. On the date hereof, the City Council held a duly noticed public hearing regarding the approval of the Amendments, where all persons interested were given the opportunity to be heard. MN 190-182-1002134.v i 1.06. There has been presented before the City Council an amended and restated forms of the Series 2017 Notes, which incorporates the Amendments. Section 2. Findings; Authorizations and Approvals. 2.01. The City Council hereby consents to and approves the Reissuance and consents to and approves to the Amendments to the Series 2017 Notes together with any related documents necessary in connection therewith, including without limitation a tax certificate and an Information Return for Tax - Exempt Private Activity Bond Issues, Form 8038 (collectively, the "Amendment Documents"), and hereby authorizes and directs the Mayor and the City Administrator of the City to execute the Amendment Documents to which the City is a party on behalf of the City, and to carry out, on behalf of the City, the City's obligations thereunder. 2.02. The approval hereby given to the Amendment Documents 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 legal counsel to the City and by the officers authorized herein to execute said documents prior to their execution; and said officers are hereby authorized to approve said changes on behalf of the City. The execution of any instrument by the appropriate officers of the City 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 officers, any of the documents authorized by this Resolution to be executed may be executed without further act or authorization of the Council by any duly designated acting official, or by such other officer or officers of the City as, in the opinion of legal counsel to the City, may act in their behalf. 2.03. The Mayor and the City Administrator are hereby designated as the representatives of the City with respect to the Amendments to the Series 2017 Notes and the Amendment Documents. The Mayor and the City Administrator, and other officers of the City are authorized and directed to execute and deliver any and all certificates, agreements, or other documents which are required by the Loan Agreement, or deemed necessary by Bond Counsel in connection with the Reissuance, the Series 2017 Notes, or are required by Bond Counsel to complete the Amendments to the Series 2017 Notes and establish the validity or enforceability of the Series 2017 Notes or the exclusion from gross income of interest on the Series 2017 Notes for purposes of federal income taxation and State of Minnesota taxation (including but not limited to the execution of an Information Return for Tax -Exempt Private Activity Bond Issues, Form 8038). 2.04. As provided in the Loan Agreement and the Note Resolution, the Series 2017 Notes shall not be payable from nor charged upon any funds other than the revenues pledged to its payment, nor shall the City be subject to any liability thereon, except as otherwise provided in this paragraph. No holder of the Series 2017 Notes shall ever have the right to compel any exercise by the City of its taxing powers to pay any of the Series 2017 Notes or the interest or premium thereon, or to enforce payment thereof against any property of the City except the interests of the City in the Loan Agreement and the revenues and assets thereunder, which have been assigned to the Lender pursuant to the Assignment of Loan Agreement. The Series 2017 Notes shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City, except the interests of the City in the Loan Agreement, and the revenues and assets thereunder, which have been assigned to the Lender pursuant to the Assignment of Loan Agreement. 2.05. In order to qualify the Series 2017 Notes as reissued as "qualified tax-exempt 2 MN 190-182-1002134. v 1 obligations" within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Series 2017 Notes are qualified 501(c)(3) bonds (as defined in Section 145 of the Code), and therefore are not treated as a "private activity bonds" (as defined in Section 141 of the Code) for the purposes of Section 265(b)(3) of the Code; (b) the City hereby designates the Series 2017 Notes as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds, that are not qualified 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 2025 will not exceed $10,000,000; (d) not more than $10,000,000 of obligations issued by the City during calendar year 2025 have been designated for purposes of Section 265(b)(3) of the Code; and (e) the aggregate face amount of the issue of the Series 2017 Notes are not greater than $10,000,000. 2.06. The Borrower shall pay all costs of the Amendments and the Reissuance. Section 3. Effective Date. This resolution shall be in full force and effect from and after its passage. Approved by the City Council of the City of Monticello this 27th day of January, 2025 May I 3 MN 190-182-1002134.v 1