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HomeMy WebLinkAbout6.p. Set Public Hearing for Mankato Rehabilitation Center, Inc. (MRCI) Private Activity Tax-Exempt FinancingAGENDA ITEM: Set Public Hearing for Mankato Rehabilitation Center, Inc (MRCI) Private Activity Tax Exempt Financing AGENDA SECTION: Consent PREPARED BY: Jeff May, Finance Director AGEN ATTACHMENTS: Resolution, Notice of Public Hearing, Application APPROVED BY: RECOMMENDED ACTION: Motion to adopt a Resolution Calling For A Public Hearing On The Issuance Of A Commercial Development Revenue Note (Mankato Rehabilitation Center Project) (MRCI). 9 ROSEMOUNT CITY COUNCIL City Council Meeting Date: March 21, 2006 EXECUTIVE SUMMARY ISSUE The issue before the City Council is the request to hold a public hearing on April 18 to consider the issuance of private activity tax- exempt bonds for MRCI. BACKGROUND Council is asked to consider setting a public hearing to consider the issuance of tax- exempt bonds for MRCI to help finance a project in the City of Rosemount. Linder Minnesota Statutes, Chapter 469, manufacturing and 501(c)(3) orgamzanons may seek tax exempt financing through government entities when issuing debt for improvements that are within that taxing entity's geographic boundaries MRCI has completed the City's application (attached) and submitted a check for the application fee. The application has been reviewed by staff, as well as by a representative of Sprmgsted, our financial consultants, and a representative of Briggs Morgan, our bond counsel The information provided in the application appears to comply with the City's Private Activity Tax- Exempt Policy and MRCI is ready to move forward in the financing process. The next step is to hold a public hearing to get the City Council's approval for financing approximately $2 7 million of project costs. MRCI is obtaining pnvate financing from Wells Fargo that will be secured by a mortgage. Upon completion of the public hearmg on April 18 and approval by the City Council, their financing may be completed so they can close on the purchase of the land by the beginning of May SUMMARY Staff is recommending that the City Council approve the attached resolution calling for the public hearing on April 18`". 1884812v1 CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION 2006 RESOLUTION CALLING FOR A PUBLIC HEARING ON THE ISSUANCE OF A COMMERCIAL DEVELOPMENT REVENUE NOTE (MANKATO REHABILITATION CENTER PROJECT) A. WHEREAS, Minnesota Statutes, Sections 469.152 through 469.1651 (the "Act gives municipalities the power to issue revenue obligations for the purpose of promoting the welfare of the state by the active attraction and encouragement and development of economically sound industry and commerce to prevent so far as possible the emergence of blighted and marginal lands and areas of chronic unemployment; and B. WHEREAS, the City Council of the City of Rosemount, Minnesota (the "City has received from Mankato Rehabilitation Center, Inc a Minnesota nonprofit corporation and 501(c)(3) organization (the "Borrower a proposal that the City undertake a program to assist in financing the acquisition, construction and equipping of a building for use as a training and rehabilitation facility for disabled persons, hereinafter described, through the issuance of a revenue note or bonds (in one or more series) (die "Note pursuant to the Act, and C. WHEREAS, before proceeding with consideration of the request of the Borrower it is necessary for the City to hold a public hearing on the proposal pursuant to the Act NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Rosemount, Minnesota, as follows 1 A pubhc hearing on the proposal of the Borrower will be held at the time and place set forth in the form of Notice of Public Heanng attached hereto as Exhibit A. 2. The City Clerk is hereby authorized and directed to cause nonce of the hearing to be given one publication in the official newspaper of the City and a newspaper of general circulation available m the City, not less than 14 days nor more than 30 days prior to the date fixed for the hearing, substantially m the form of the attached Notice of Public Hearing. ATTEST: ADOPTED this 2f day of Match, 2006 James D. Verbrugge, Deputy City Clerk William H Droste, Mayor RESOLUTION 2006 Motion by Seconded by: Voted in favor: Voted Against: Members Absent 1884812v1 2 STATE OF MINNESOTA COUNTY OF DAKOTA CITY OF ROSEMOUNT I, James D. Verbrugge, duly appointed, acting and qualified Deputy City Clerk of the City of Rosemount do hereby cerufy that I have examined the City of Rosemount records and the Minute Book of said City for the meeting of the 21" of March, 2006 and that the attached copy of the RESOLUTION CALLING FOR A PUBLIC HEARING ON THE ISSUANCE OF A COMMERCIAL REVENUE NOTE was approved and is a true and correct copy of the City Proceedings relating to said Resolution. IN WITNESS WHEREOF, I have hereunto set my hand and seal of said City this day of March, 2006. 1884812v1 CERTIFICATE RESOLUTION 2006 James D. Verbrugge, Deputy City Clerk City of Rosemount Dakota County, Minnesota 1884812v1 EXHIBIT A NOTICE OF PUBLIC HEARING ON A PROPOSAL FOR ISSUANCE OF A COMMERCIAL DEVELOPMENT REVENUE NOTE (MANKATO REHABILITATION CENTER PROJECT) Notice is hereby given that a pubhc hearing shall be conducted by the City Council of the City of Rosemount, Minnesota on Tuesday, Aptil 18, 2006 at 7 30 p.m. at the City Hall located at 2875 145t Street West, Rosemount, Minnesota, to consider the proposal of Mankato Rehabilitation Center, Inc. d /b /a MRCI, a Minnesota nonprofit corporation "Borrower that the City assist in financing the acquisition, construction and equipping of an approxnnately 20,000 square foot facility to be located at the intersection of Highway 3 and County Road 42 in the City (the "Project and certain other costs related to the Project by the issuance of a revenue note or other obhganon in an amount not to exceed $3,000,000 pursuant to Minnesota Statutes, Sections 469 152 to 469.1651, as amended. The Project will be owned by the Borrower The note or other obhgations if and when issued will not constitute a charge, hen or encumbrance upon any property of the City except the Project, and such note or obligations will not be a charge against the City's general credit or taxing powers, but will be payable from sums to be paid by the Borrower pursuant to a revenue agreement. A draft copy of the proposed apphcauon to the Commissioner of the Department of Employment and Economic Development, State of Minnesota, for approval of the Project, together with all attachments and exhibits thereto, is available for pubhc mspecuon during normal business hours, Monday through Friday, at the City Hall m the City. At the time and place fixed for the pubhc hearing, the City will give all persons who appear at the hearing an opportunity to express their views with respect to the proposal. In addition, interested persons may file written comments respecting the proposal with the City Clerk at or prior to the pubhc hearing A -1 Bond Proceeds $2,640,000 Land $1,000.000 Cash 660,000 Building $2,033,000 Total Sources $3,300,000 Architectural, Engineering $165,000 Costs of Issuance 62,000 Capitalized Interest $40,000 Total Uses 53,300,000 City of Rosemount, Minnesota Application for Tax Exempt Financing (Commercial, Industrial, Educational or Health Care) 1. APPLICANT a. Business Name Mankato Rehabilitation Center, Inc. dba MRCI b Business Address 15 Map Drive P.O. Box 328 Mankato, MN 56002 c. Business Form (corporation, partnership, sole proprietorship, etc.) Corporation 501 (c) 3 Non -Profit d. Authorized Representative Pamela J. Year, Executive Director e. Pnncipal contact person and telephone number Pamela J Year, Executive Director 507- 386 -5606. In her absence, Chuck Juntunen, Director of Business operations 507 -386- 5701 or Linda feeding, Director of Consumer Supports 507- 386 -5642. 2, PURPOSE OF REQUESTED FINANCING a. New Facility (describe) The purpose of the requested financing is for the building of approximately 20,000 square feet to be constructed on 5.521 acres of land near the intersection of Highway 3 and County Road 42 in Rosemount, MN. MRCI's programs which are currently located in Lakeville and Burnsville would be combined at this new facility. b. Expansion (describe) c. Refunding (attach explanatory letter) 3. GIVE BRIEF DESCRIPTION OF NATURE OF BUSINESS, PRINCIPAL PRODUCTS, ETC. MRCI was founded in 1953. Its mission is to create innovative and genuine opportunities for people with disabilities and disadvantages to support their community participation. Revenues are derived from various government sources that support human services and from customers for whom the consumers perform work. Revenues were $31,247,000 for 2005 and S28,958,000 for 2004 Net income was $657,000 for 2005 and $575,000 for 2004. The company has fifteen owned or leased locations m southern Minnesota and the southern seven -county Metro area. MRCI is currently the largest provider of community based supported employment and center based extended employment in Minnesota During the course of a year, the Company serves more than 3,000 people from Southern Minnesota and the Southern Metro areas. MRCI's employment programs and DT &H programs are accredited by CARF, the international accrediting organization for community rehabilitation programs. The DT &H programs are licensed by the Minnesota Department of Human Seivices. Employment programs are also certified by the Department of Employment and Economic Development Principal activities at the Rosemount facility will include employment transition services (job placement); workshop employment which consists primarily of subcontracted packaging and assembly; day training and rehabilitation, which is essentially work with additional program enhancements, for example, crafts, recreation and as a home -base for community employment; fiscal support entity services which are administrative only and will utilize internal office space. There are 110 consumers now with about 25 staff. Company projections are 125 consumers m 5 years with 32-35 staff, conservatively. 4. ESTIMATED SOURCES AND USES PROJECT COSTS: (Not required for refunding) Sources Uses MRCI Mankato 15 Map Drive, P 0 Box 328 Mankato, MN 56002 -0328 MRCI— Highland 1611 Monks Avenue Mankato, MN 56001 -3718 MRCI —Front Street 503 South Front Street Mankato, MN 56001 -3718 MRC1— New Ulm 2100 North Broadway, Box 894 New 17lm MN 56073 -0894 MRCI Fairmont 701 Cory Lane Fairmont, MN 56031 -0489 MRCI Shakopee 792 Canterbury Road Suite 231 Shakopee, MN 55379 -1840 MRCI Chaska 1045 Stoughton Avenue Chaska, MN 55318 -2133 MRCI Burnsville 12115 Nicellet Avenue South Burnsville, MN 55337 MRCI Lakeville Kenwood Center 17793 Kenwood Trail Lakeville. MMLN 55044 The Achievement Center 414 Industnal Lane Worthington, MN 56187 Blue Earth County Employment Services 410 East Jackson, Suite 410 Mankato, MN 56001 Fairbault County Employment Training Office Professional Center 301 North Main Blue Earth, MN 56013 MRCI— Thnft Shop 111 Sioux Road Mankato, MN 56001 -4839 MRCI BARGINS 2017 South Broadway New Ulm MN 56073 TACfully Unique I hnfl Shop 423 10 Street Worthington, MN 56187 5. TOTAL FINANCING REQUESTED 52,640,000 (80% of project costs) 6. TYPE OF FINANCING PROPOSED Bonds X Tax Exempt Loan Expected Term of Financing _20 Years Security Mortgage. X Letter of Credit Guaranty (third party) Guaranty (personal) Unsecured Other (specify) 7. BUSINESS PROFILE (Not required for refunding) a. Is the busyness located within City Boundaries The Building and related businesses will be in Rosemount, MN. b. Number of employees within the City of Rosemount geographic boundaries 1. Before this project Mmunal 2. After this project 110 consumers and about 25 staff, Company projections are 125 consumers in 5 years with 32 -35 staff, conservatively c. Approximate annual sales S1,950.000 for the combined Burnsville and Lakeville programs, projected to grow to $2,500,000 by year five. d. Length of time in business MRCI has been in business for 53 years. The Burnsville and Lakeville programs have both been in business for 15 years. These programs will be combined in the Rosemount facility. e Length of time in City New to Rosemount f. Do you have business operations in other locations? If so, where? 8. NAMES OF: a. Underwriter (name and contact person) Terry Keller, Wells Fargo Bank, N.A. 507- 387 -92I4 and Mark Schuler 605 -575 -4965 and Amy Williams 612- 667 -7955 Wells Fargo Brokerage Services, LLC Public Finance Division b. Bond Counsel Mary Dyrseth, Briggs Morgan c. Underwriter's Counsel Not Applicable d. Borrower Counsel Brigid McDonough, Bnggs Morgan 9. WHAT IS YOUR TARGET DATE FOR a. Construction start August 2006 b. Construction completion March 31, 2007 10. ATTACHMENTS: a. Project description materials b. Draft resolution calling for public hearing c. Notice of Public Hearing d. Draft of preliminary resolution e. Draft application to department of Trade and Economic Development necessary attachments Financial feasibility letter g. Prelmiinary bond counsel opinion h. Initial filing fee (to be set by City Council) i. Indemnification Letter of Agreement The applicant further states that it has been furnished a copy of the City of Rosemount's Private Activity Tax Exempt Financing Guidelines and is aware of its content and agrees to be bound by its terms and the terms of the indemnification letter. For further information. contact: City Finance Director City of Rosemount 2875 145 Street West Rosemount, MN 550684997 (651) 322-2031 By ate uti /N ycry Applicant ,liQn.et�p+i ik! Exhibit A The following describes MRCI's principle programs and services. Transitional Services Our employment planning program gives consumers the chance to try a variety of jobs and job sites to measure their potential for employment. People served include individuals with disabilities, participants in welfare to work, high school students in transition, and persons with deaf /blindness disabilities Depending on results, those assessed may remain with MRCI, be referred for more training, or become employed. Our employee development program gives individuals instruction in specific job skills and key work issues. Community Employment Our community employment program supports people in single site job placements, enclaves, and work crews A single site placement provides a job for one individual. Job coaching is provided to assure success. An enclave is a small group of people working together at business sites on a contract basis. Supervised by MRCI staff. The work may include assembly and packaging, food service, laundry, retail, or other jobs. A work crew is a mobile group that covers several locations doing janitorial tasks Work crews are also supervised by MRCI staff. Consumers often do a number of job tryouts to obtain a good job match. Job Placement Job placement services are provided as an integral part of all MRCI vocational services. Some persons may find community employment appropriate, while others may obtain competitive employment and become independent from MRCI. Center -Based Employment This work for people with disabilities is provided at five MRCI owned and operated sites Wages are based on production. People often use center -based employment together with community employment to enhance experience and earnings Center -based jobs include packaging and assembly, material handling, data entry, food service, laundry, woodworking, micrographics, custodial, and clerical work Mental Health Grant Projects Persons with severe and persistent mental illness find employment through special grant projects. These grant projects provide specialized employment services to LeSueur, Nicollet, Rice, Brown. Sibley, Nobles, Jackson, Cottonwood, Rock and Blue Earth Counties. MRCI has partnered with the Rehabilitation Services Branch, the Department of Human Services. and all 10 counties to provide these services, which include placement, job retention, and support. Welfare to Work This comprehensive program helps individuals MFIP (Minnesota Family Investment Program) enter the work force. Services include counseling, case management, skills and interest assessments, financial assistance for tuition, daycare, car expenses, clothing, placement, and other help necessary to get and keep ajob. Day Training and Habilitation (DT &H) To meet the complex challenges and special needs of people with severe developmental disabilities, DT &H offers individualized programs Supports are provided to the individual throughout the day as each person participates in the type of activity that is best suited to his or her needs including community employment and center -based work, and social, recreational, and educational components. All aspects of a person's needs are addressed MRCI provides services through 12 programs in six counties. Case Management All individuals at MRCI facilities receive case management from MRCI's staff of professional rehabilitation counselors and team leaders. MRCI staff members work closely with families, employers, residences, and county case managers to plan and coordinate services, protect individuals' rights, ensure quality of service, and help with personal issues. Fiscal Support Entity MRCI was one of the first agencies in Minnesota to offer Employer of Record/Fiscal Intermediary services. In 2004, MRCI became certified by Department of Human Services as a Fiscal Support Entity A Fiscal Support Entity is an umbrella agency that offers a wide range of services under Community Directed Consumer Supports (CDCS) including Fiscal Conduit, Payroll Agent, and Agency with Choice Under the Fiscal Conduit option, the family is the employer and MRCI provides reimbursement for employee expenses and other approved expenses. Under the Payroll Agent model, the family is the employer and buys assistance from MRCI for payroll functions and Insurance. Agency with Choice is similar to the Employer of Record Program. MRCI has extended its service area to include 50 counties including the metro area and southern Minnesota PCA Choice Under the PCA (Personal Care Assistant) Choice program, MRCI is an employer of record that handles the financial management of the PCA services. This program allows the consumer and /or the qualified professional to recruit, hire, orient, train, and provide ongoing supervisors of PCA staff. Transportation In most cases, MRCI provides some transportation in the communities it services when other options are not available. MRCI maintains a fleet of vans and buses to take consumers to and from home and work sites. In some cases, MRCI contracts for transportation on the consumer's behalf. In the case of Rosemount transitional employment, job placement, community employment and DT &H services will be the predominant services offered. Fiscal Support Entity Services may be administered from this site m the future. City of Rosemount Mayor And Members of the Council PART VI INDEMNIFICATION LETTER OF AGREEMENT RE: Application of Mankato Rehabilitation Center, Inc. for Tax Exempt Revenue Bond Financing by the City Of Rosemount Dear Mayor and City Council Members• This letter of agreement is given by Mankato Rehabilitation Center, Inc. a Corporation under the laws of Minnesota "Applicant as required by the City of Rosemount in connection with its consideration of an application for tax- exempt revenue bond financing for the project descnbed in the application Applicant hereby covenants, warrants and agrees as follows: 1 Applicant agrees to pay or reimburse the City for any and all costs and expenses which the City may incur in connection with its consideration of the project and the granting of tax exempt revenue bond financing therefore, whether or not the project is preliminanly approved by the City, whether or not the project is approved by the Sate of Minnesota, whether or not revenue bond financing is finally approved by the City, whether or not the bonds are issued and sold, and whether or not the project is carried to completion. 2. Applicant agrees to indemnify and hold the City, its officers, employees and agents harmless against any and all losses, claims, damages, expenses or liabilities, including attorneys fees incurred in their defense, to which the City, its officers, employees and agents may become subject in connection with the City's consideration, issuance or sale of the bonds for Applicant's project and the carrying out of the transactions contemplated by this agreement and any resolutions adopted, or agreements executed by the City in connection with the issuance of its bonds for this project 3. Applicant here by releases the City, its officers, agents and employees from any claims, causes of action, losses, damages, or liabilities which it may have against the City, its officers, agents, and employees or which it may incur in connection with: the City's consideration of the application for industrial development revenue bond financing for Applicant's project; the failure of the City, in its discretion, to issue tax exempt revenue bonds for Applicant's project, the issuance and sale of the bonds; the construction of the project; or any other matter or thing of any type or nature whatsoever which may arise in connection with the foregoing. 4 Applicant is aware of the City's application and administrative fee structure for tax exempt financing and agrees and covenants that all such fees will be paid in the amount and at the times required Dated' c 2 y L (Applicant) B /Li„— Pamela J. Year AGENDA ITEM: Receive Donation Parks Recreation Dept. AGENDA SECTION: Consent PREPARED BY: Dan Schultz, Parks Recreation Director AGENDA NO. ATTACHMENTS: None APPROVED BY Q v RECOMMENDED ACTION: Motion to approve receiving the $200 from CF Industries to be used for the Leprechaun Days from Toombs Insurance Agency to be used for the Safety Camp Dakota Electric to be used for the annual Arbor Day event. following donatio Blarney Stone Hunt, $250 program, and $500 from 4 ROSE MOUNT CITY COUNCIL City Council Regular Meeting. March 21, 2006 ISSUE Receive donations. BACKGROUND The following donations have been received by the Parks and Recreation Department: $200 from CF Industries to be used for the Leprechaun Days Blarney Stone Hunt, $250 from Toombs Insurance Agency to be used for the Safety Camp program, and $500 from Dakota Electric to be used for the annual Arbot Day event. SUMMARY This is a request for Council to receive the donations listed above. EXECUTIVE SUMMARY