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