04-11161 Council File # -�
2
3 Green Sheet # 3024352
a RESOLUTION
s CI OF SAINT PAUL, MINNESOTA G}
6 �--� n � �t
7 Presented by
8
F��� -�T�i�lQ.7
Committee Date
_�
12
13
74
15
16 WT�REAS:
17
City Council Resolution
jSt. Pascal Baylon School Project]
18 1. The Port Authority of the City of Saint Paul (the "Port Authorit}�') has given its approval to the
19 issuance of its tax-exempt "bank qualified" revenue notes (the "Notes'�, in an amount not to exceed $2,800,000
20 to refund debt previously incurred by St. Pascal Baylon School (the "School'� with regard to the construction of
21 its education facilities located at 1757 Conway Street in the City of Saint Paul (the "ProjecP'); and
22
23 2. Minnesota Statutes, Secrion 469.084, Subd. 11, provides that any issue of zevenue notes
24 authorized by the Port Authority shall be issued only with the consent of the City Council of the City of Saint
25 Paul, by resolution adopted in accordance with law; and
26
27 3. Approval of the issuance of the proposed Notes by the City Council is also required by Section
28 147(fl of the Internal Revenue Code of 1986, as amended; and
29
30 4. To meet the requirements ofboth state and £ederal law, the Port Authorityhas requested that the
31 Cily Council gives its requisite approval to the issuance ofthe proposed Notes by the Port Authority, subject to
32 the Port Authority holding a public hearing and final approval of the issuance and details of said Notes by the
33 Port Authority.
34
35 NOW, THEREFORE, BE TT RESOLVED bythe Council ofthe City of Saint Paul that, in accordance
36 with the requirements of Section 147( fl of the Internal Revenue Code of 1986, as amended, and in accordance
37 with Minnesota Statutes, Secrion 469.084, Subd. 11, the City Council hereby approves the issuance of the
38 aforesaid Notes by the Port Authority for the purposes described in the Port Authority resolution adopted
39 November 23, 2004, the �act details of which, including but not limited to, provisions relating to principal
4o amount, maturifies, interest rates, discount, redemption, and the issuance of additionai notes aze to ba
41 deterniined by the Port Authority , the School and the purchaser of the Notes, and the City Council hereby
42 authorizes the issuance of any additional notes (including refunding notes) by the Port Authority found by the
a3 Port Authority to be necessary for cairying out the purposes for which the afaredescribed Notes are issued.
44
as
46
47
48
49
Adopted: December 1, 2004
32810.v1
o�/- r �r�
Yeas Nays Absent
Benanav �
Bostrom �
Hanis �
Helgen �
Lantry �
Montgomery v
Thune �/
� �
Adopted by Council: Date ` �f G ivr� r.c /�il�
Adoprion Certified by Council Secretary
Reque�tcd by Deparhn t of:
r� /�
� /`
By:
Form Approv d by City Attomey
B ���_ � G
- �7-O j'
/
Apprg�v d y Mayor for Su�iissi
�
I•.ii
.....
32810.v1
o� �ri�
� Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet Green Sheet �
DepartmeM/officeleouncil: Date Initiated;
PA - p«cAamorsty ,�NO�� Green Sheet NO: 3024352
r
Comtact Person 8 Phone• ���e�t Sent To Person lnitialiDate
Petet Klein � 0 uthori �
� - Assi9n 1 Iao 'u & Ec nomic Develo e artme¢[ Dire to
Must Be on Council Agenda by (Date): Number 2 a or•s O e or
Por
Routing 3 ounc't
Order 4 i er
5
Tofal # of Signature Pages _(Glip All loeations fo� Signature)
Action Requested:
Approvai of the issuance of approx. $2,800,000 of conduit tax exempt 501(c)(3) revenue notes for St. Pascal Baylon School to refinance
an addition and improvements to the facility located at 1757Conway ST.
Recommendations: Approve (A) or Reject {R): Personat Service CoMracts Must Answer the Following Questions:
Planning Commission 1. Has this perso�rm ever worked under a contract for this departmenf?
CIB Committee Yes No
Civil Service Commission 2. Has this person7firm ever been a city employee?
Yes No
3. Does this person/firm possess a skill not normally possessed by any
current city employee?
Yes No
Explain all yes answers on separzte sheet and attach to green sheet
Initiating Problem, Issues, Opportunity (Who, What, When, Where, Why):
St Pascals is currently paying more than it needs to on debt incurted for the improfement of its faciliries
AdvaMages It Approved:
The issuance of the notes will allow St. Pascals to improve the educarional environment for its students.
Disadvantages If Approved:
None
Disativantages lf Not Approved: �
The educarional experience for approximately 35Q students annually would be lessened.
Total AmouM of
Transactio�: 2800000 Cost/Revenue Budgeted:
Fundinq Source: port Authofity Conduit Activity Number:
Financiai I»formation: TaX-eXempt 501(C) (3)
(Ezplaih) reven
1909 LandmafkTowers
345 St. Pezer Street
Saint Paul, Minnesota
i5102-7661
P�RT
J � 4
Q �
4 111� S
t• � O
�
2 bS 1`y
November 16, 2004
Ms. 5usan Kimberly, Director
Pla�ning & Economic Development Qepartme�t
1300 City Hali Annex
25 West Fourth Street
Saint Pau{, Minnesota 55102
�� r�t�
Tel: 657-224-5686
Fax:651-223-5198
Toll Free: 800328-8477
wwwsppa.com
RE: $2,800,000 CONDUIT 501(c)(3) REVENUE NOTE ISSUE
ST. PASCAL BAYLON SCHOOL
Dear . imb�'��
We submit for your review and referral to the o�ce of the Mayor, City Councif,
and City Attorney's office, details pertaining to the issuance of conduit 501(c)(3)
revenue notes in the approximate amount of $2,800,000 to refinance an addition
and improvements, to the facility located at 1757 Conway Street. The City of
Saint Paui's entitlement allocation will not be affected by this appiication.
{n addition to the stafF memorandurn, we are attaching a draft copy of the
proposed City Council Resolution and a copy of the Resolution conducting the
required public hearing and authorizing the sale of the 501(c)(3) sevenue bonds
in the amount of $2,800,000 that will be considered by the Port Authority's Board
on November 23, 2004. G+ty Council action will be required after the Port
Authority's Board meeting of November 23, 2004.
Your expeditious handiing of this matter will be appreciated.
Sincerely,
,���--_
Kenneth R. dohnson
President
KRJ:ah
Attachment
cc: Mayor Kefly
32780.vt
SAINT PAUL
PoRT AUTHORITY
MEMORANDUM
TO:
FROM:
SLTBJECT:
Board of Commissioners
(Meeting of November 23, 2004)
Pe
La
Ke
St.
Au
tllE
Re
Kodak ds
digilalscience° �
DATE:
o� �/«
Nov. 17, 2004
Conduit Tax-Exempt Notes in
Action Requested:
Provide approvai for the Port Authority to issue approximately $2,800,000 of conduit tax-
exempt notes to be used for the refinancing of existing debt incurred to finance an
addition and improvements to the facility located at 1757 Conway Street.
Public Purpose:
The refinancing will aliow SPBS to strengthen its financial position by reducing its debt
service obligations. The addition and improvement to the 1757 Conway Street building
will enhance SPBS's ability to provide educationa! services to its students.
Business Subsidv:
The proposed issuance of notes is for a not-for-profit organization and is exempt from
treatment as a business subsidy.
Backaround;
SPSS was started in 1950 and is a Minnesota nonprofit 501(c)(3) corporation, which
provides a complete K-8 education fo� families primarily from St. Paui's East Side and
adjoining suburbs. SPBS has a staff of 30 empfoyees and a student population of 350.
The total cost of the addition and improvements was $8,090,890 and SPBS took on
$6,200,000 of debt to pay for it. A detailed analysis of the construction costs and
specifiic usage of space determined that $2,790,174 was eiigible to be financed on a tax
exempt basis. This represents 35% of the total project cost and 45% of the tofal debt
incurred. The allocation beiween taxabie and tax-exempt uses was done on a square
foot basis (rather than the number of classrooms). This calculation resulted in 54% of
the buiiding area qualifying for tax-exempt financing.
32825.v1
St. Pascal Baylon School
Page 2
o� r��t�
Earlier this year, the Port Authority proposed to f2amsey County that the county refer to
the Port Authority ail 501(c)(3) revenue bond financing requests it receives. The county
agreed, but reserved fhe abifiiy to issue up to $10 million in tax-exempt revenue bonds
each year. This was done because federal law allows up to $10 million annually to be
issued by each focal govemment as "bank qualified" debt. This debt commands a{ower
interest rate in the marketpiace because it can be beneficiaAy owned by banks. The
county wished to reserve this $10 million amount for 501(c)(3) organizations which are
in business for the primary purpose of carrying out the county's social service programs
and objectives, thus, all 501(c)(3) organizations which are not of this type are referred
to the Port Authority, such as the St. Pascal's School financing.
Current Status:
SPBS has existing debt ob(+gations of approximately $2,800,000 with Premier Bank. The
current interest rate fior the bank obligation is around 6,00%. The Transaction Manager
wif{ be representing SPBS in negotiations with Psemier Bank, to arrange for the
placemenf of the tax-exempt notes to be issued by the Port Authority. It is anticipated
that these notes wili be placed with Premier Sank.
Proposat:
Type of Notes:
Rate:
Security:
Term:
Issuer:
Issuer Fee:
Sank:
Transaction Manager:
Bond Counsei:
Borrower's Counsel:
32821.v1
The tax-exempt notes will be "bank qualified" under Section
265 of the Code. This wili aliow the bank to hold these notes
and realize the full investment yield and not reduce the related
interest expense.
initially, approximately 4.75%. The rate will be adjusted every
five years at a percentage of U.S. Treasuries.
First lien mortgages on the property as welf as SPBS's
unconditional promise to repay the notes.
18 years
Saint Paul Port Authority
1/8�' of 1% annuafly on the outstanding principal balance of
the notes. The initial fee wili be $3,500.
Premier Bank
Catholic Finance Corporation
Leonard Street & Deinard
Briggs & Morgan
tj`� J 1 /(o
St. Pascal Baylon Schoof
Page 3
Workforce Imalications:
Nof applicable.
Policv Exceptions:
Based on a preliminary review of the information provided by the borrower and counsel,
management has concfuded that the use of the proposed financing will be consistent
with the policy being considered by the Board, in that it wil! provide for the
reimbursement of the costs incurred in the portion of the borrower's project related to
education and not to any of the secular functions of the church or schooi. Sefore the
issuance of the financing, the borrower's information will be provided to the Port
Authority in the form of a sworn affidavit from the senior executive or finance officer of
the borrower.
Disciosure•
The Port Authority Commissioners by SEC rules are obligated to disclose any risks or
facts you may be aware of that would affect the probability of repayment on these notes.
Recommendation:
We recommend the
exempt notes.
PMK:ah
authorization to issue approximately $2,800,000 of conduit tax-
32821.vM1
L�t{- 1 /l�
Resolurion No. 410 6
RESOLUTION OP
TI� AUTI30RITY OF TI� CTfY OF SAINT PAUL
[St. Pascal Baylon School Project]
Wf�REAS, the purpose of Minnesota Statutes, Secrions 469.152 through 469.1651, lmown
as the Mnuiesota Municipal Indushial Development Act (the "AcY'), as found and determined by
the legisiature, is to promote the welfare of the state by the active attracrian, encouragement, and
development of economically sound indushy and commerce to prevent so far as possible the
emergence of blighted and marginal lands and areas of chronic unemployment;
WHEREAS, factors necessitating the active promotion and development of economicall�
sound industry and commerce are the increasing concentration of population in the metropolitan
areas, the rapidly rising increase in the amount and cost of govemmental services required to meet
the needs of the increased populafion, the need far development of land use which will provide an
adequate taac base to finance these increased costs, and access to employment opporhu�ities for such
population;
WHEREAS, the Authority of the City of Saint Paul (the "Authorit}T') has received a request
from St. Pascal Baylon School (the "School") that the Authority consider the issuance of talc-
exempt "bank qualified" revenue notes (which may be in the form of one ar more notes or series) in
an amount not to exceed $2,800,000 (the "Notes") to refund debt previously incurred by the School
with regard to the construction of its education facilities located at 1757 Conway Street in the City
of Saint Paul (the "Project");
WHEREAS, the Authority and the School will enter into a revenue agreement (the
"Revenue AgreemenY') in which the School will agree to make all payments due on account of the
Notes;
WIIEREAS, the Authority desires to facilitate the selective development of the community
and to help provide the range of services and employment opportw�iries required by the population,
and the Project will assist the Authority in achieving those objectives;
WHEREAS, the Credit Cos�unittee has given its appmvai to the proposed issuance of the
Note, and together with management recommends Board approval; and
WHEREAS, pursuant to notice published in advance as required by state and federal law,
a public hearing was heid before the Authority on the proposal of the School to refinance the
Project, at wtuch hearing all those who desired to speak were heard, and in connecrion with
which written comments were taken in advance.
zssoias��
p�/- !/1�
NOW, TFIEREFORE, BE Tf RESOLVED by the Authority of the City of Saint Paul, as
follows:
1. On the basis of information auailable to the Authority, the Authority hereby finds
that the Project constitute properties used or useful in connection with one or more revenue
producing enterprises engaged in any business within the meaning of the Act; the Proj ect fiuthers
the purposes stated in the Act; and it is in the best interests of the port district and the people of the
City of Saint Paul and in furtherance of the general plan of development to assist the School in
refinancing the Project.
2. For the purpose of refinancing the Proj ect, and paying certain costs of issuance and
other expenses in connecrion w%th the issuance of the Notes, and provided that the Project and its
financing receive approval by the Department of Trade and Economic Development ("DTED"), the
Authority hereby authorizes the issuance, sale and delivery of the Notes in an aggregate pzincipal
amount of up to $2,800,000. The Notes shall beaz interest at such rates, shall be nurnbered, shall be
dated, shall mature, shall be subj ect to redemption prior to maturity, and shall be in such form and
have such other details and provisions as may be approved by the President and Chief Financial
Officer of the Authority, the School and the purchaser of the Notes, currently anticipated to be
Premier Bank.
3. The Notes and interest thereon shall not constitute an indebtedness of the Authority
or the City of Saint Paul within the meaning of any consritutional or statutory lunitation and shall
not constitute or give rise to a pecuniary liability of the AuYhority or the City of Saint Paul or a
charge against their general credit or tasing powers and neither the fuli faith and credit nor the
taxing powers of the Authority or the City of Saint Paul is pledged for the payment of the Notes or
interestthereon.
4. It is hereby found, determined and declared that:
a. The issuance and sale of the Notes, the execution and delivery by the
Authority of the documents which in the opinion of the President and Chief
Financial Officer of the Authority and Bond Counsel are reasonably required in
connection with the issuance of the Notes, including specifically the Revenue
Agreement and one or mare revenue notes (the "Docuxnents"), and the performance
of all covenants and agreements of the Authority contained in such documents, and
of all other acts and things required under the Constitution and laws of the State of
Minnesota to make the Documents and the Notes valid and binding obligarions of
the Authority in accordance with their terms, are authorized by Minnesota Statutes,
Sections 469.152 tlarougp 469.165, as amended (the "AcY'�.
b. It is desirable that the Notes be issued by the Authority.
zssoiasvi
D�-11?�
5. The President of the Authority, or such other officer as may be appropriate in the
absence of the President, is hereby authorized to execute the Documents (to the extent the Authority
is a patty thereto). The execution of any Document by the President of the Authority herein
authori2ed shall be conclusive evidence of the approval of such Document in accordance with the
terms hereof.
6. The President and other officers of the Authority are authorized and directed to
prepare and furnish to Bond Counsel certified copies of proceedings and records of the Authority
relating to the issuance of the Notes and other transactions herein contemplated, and such other
affidavits and certificates as may be required to show the facts relating to the legality of the Notes
and the other transacfions herein contemplated as such facts appear from the books and records in
the officers' custody and controi or as otherwise known to them; and all such certified copies,
certificates and affidavits, including any heretofore fiunished, sha11 constitute representations of the
Authority as to the truth of all statements contained therein.
7. The approval hereby given to includes approval of such details as may be necessary
and appropriate and approved by the Authority's President and Chief Financial Officer; and
includes approval of, among other things:
a, establishment of the final principal amount of the Notes and the interest rate
to be borne thereby; rop vided that the maxunum aggregate principal amount of the
Notes shall not exceed $2,800,000;
b. the establishment of the maturity schedule and call provisions to be
applicable to the Notes; and
c. such related inshuments as may be required to sarisfy the condirions of any
purchaser of the Notes.
8. The authority to approve, execute and deliver future amendments to Documents
entered into by the Authority in connecfion with the issuance of the Notes and the other transactions
herein contemplated, is hereby delegated to the President of the Authority, provided that (a) such
amendments either do not require the consent of the holders of the Notes or, if required, the consent
of the requixed percentage of the holders of the Notes has been obtained with respect to such
amendment; (b) such amendments do not materially adversely affect the interests of the Authority
as the issuer of the Notes; (c) such amendments do not contravene or violate any policy of the
Authority�, and (d) such amendments are acceptable in £orm and substance to Bond Counsel. The
execution of any insirument by the President of the Authority shall be conclusive evidence of the
approvai of such instruments in accordance with the terms hereof.
2550188v] 3
D�-lIl�
9. No covenant, stipulation, obligarion or ageement contained herein or in the
Documents shall be deemed to be a covenant, sripulation, obligation or ageement of any member of
the Board of Commissioners of the Authority, or any officez, agent or employee of the Authority in
that persons individual capacity, and neither the Board of Commissioners nor any officer executing
the Notes shall be liabie personally on the Notes or be subject to any personal liability or
accountabilityby reason of the issuance thereof.
Adopted: November 23, 2004.
ATTEST:
Its Secretary
AUTHQRITY QF THE CITY
OF SAINT PAUL
Its Chair
Kodak ds
digilalscience° �
zssoLas�i q