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HomeMy WebLinkAbout6.o. Reimbursement Intent Resolution for Flint HillsAGENDA ITEM: Reimbursement Intent Resolution for Flint Hills AGENDA SECTION: Consent PREPARED BY: Jeff May, Finance Director AGE;; (,y ATTACHMENTS: Resolution APPROVED BY: a RECOMMENDED ACTION: Motion to adopt a Resolution Declaring An Official Reimbursement Intent With Respect To The Proposed Issuance Of Revenue Bonds In An Amount Not To Exceed $50,000,000, At The Request Of Flint Hills Resources, LP. 4 ROSEMOUNT CITY COUNCIL City Council Meeting Date: March 21, 2006 EXECUTIVE SUMMARY ISSUE The issue before the City Council is the request by Flint Hills to pass a resolution allowing them to be reimbursed for payments made for their proposed project before the actual financing with private activity tax- exempt bonds would occur. BACKGROUND Council is asked to consider a resolution allowing Flint Hills to be reimbursed from bonds for payments made within the past 60 days as well as future payments made poor to the sale of bonds for their proposed project. This is a common practice that the City follows as well There are many preliminary costs that will be incurred by Flint Hills and by passing the resolution at this time they will be allowed to reimburse themselves from the future bond proceeds for the expenses incurred after the resolution is approved and those paid up to 60 days prior to passage and before the funds from bonds are received Flint Hills has completed the City's application and submitted a check for the apphcation fee. The apphcation has been reviewed by staff, as well as by a representative of Springsted, out financial consultants, and a representative of Biggs Morgan, our bond counsel. The information in the application appears to comply with the City's Tax Exempt Financing Policy and Flint Hills is ready to begin incurring significant costs that they wish to be reimbursed through bonds. At a future tune the Council may be asked to consider setting a public heating to consider issuing tax exempt bonds for the Flint Hills project. At this time, only approving the reimbursement resolution has been requested. Approving this resolunon does not obligate the City to approve the tax exempt financing for this project. SUMMARY Staff is recommending that the City Council approve the attached reimbursement resolution. I885177v1 CITY OF ROSEMOUNT DAKOTA COUNTY, MINNESOTA RESOLUTION 2006 RESOLUTION DECLARING AN OFFICIAL REIMBURSEMENT INTENT WITH RESPECT TO THE PROPOSED ISSUANCE OF REVENUE BONDS IN AN AMOUNT NOT TO EXCEED $50,000,000, AT THE REQUEST OF FLINT HILLS RESOURCES, LP WHEREAS, the City of Rosemount (the "Issuer a municipal corporation organized and existing under the Constitution and laws of the State of Minnesota, is authorized and empowered by Minnesota Statutes, Sections 469.152 to 469.165, as amended (the "Act to undertake projects described in the Act, to lease a project to a contracting party, and to issue revenue bonds to defray all or a portion of the cost of acquiring, constructing, improving and equipping the project, as further provided in the Act; and WHEREAS, a proposal has been made to the Issuer by Fhnt Hills Resources, LP, a Delaware limited partnership (referred to herein as the "Borrower'), requesting that the Issuer issue its revenue bonds to provide financing for a project, consisting primarily of a sohd waste disposal project, pursuant to the Act (referred to as the "Project and WHEREAS, the Project will be undertaken at the existing facility of the Borrower located within the municipal boundaries of the Issuer; and WHEREAS, the revenue bonds to be issued for the Project (the "Bonds are expected to be in a principal amount not to exceed $50,000,000, which Bonds are to be repaid solely and only through payments to be made by the Borrower pursuant to a lease agreement to be entered into between the Issuer and the Borrower, and WHEREAS, the Bonds shall be limited obligations of the Issuer, and shall not constitute nor give rise to a pecumary liability of the Issuer or a charge against its general credit or taxing powers, and the principal of, interest and premium, if any, on the Bonds shall be payable solely out of the revenues derived from the loan agreement. BE IT RESOLVED by the City Council of the City of Rosemount, Minnesota as follows: 1 To the extent that the Borrower, in anticipation of the issuance of the Bonds, expends funds which constitute costs of the Project, as defined in the Act, and are chargeable to capital account, for federal income tax purposes, the Borrower shall be entitled to be reimbursed therefor out of the proceeds of the Bonds, when, as and if issued, and this resolution shall constitute an official declaration of reimbursement intent with respect thereto, all as further set forth below (a) It is desirable in the estnnanon of the Borrower that, in connection with the Project, capital expenditures be incurred prior to the issuance of the Bonds and the Borrower reasonably expects to reimburse such capital expenditures from proceeds of the Bonds (b) The Bonds are expected to be issued in an aggregate principal amount not to exceed $50,000,000. (c) (d) In connection with the Project, authority is hereby specifically conferred on any officer or employee of the Issuer, including the City Adnurustrator and the Finance Director, to make such further declarations of official reimbursement intent as may he necessary or desirable and as may be consistent with then existing budgetary and financial circumstances of the Borrower. 2. This adoption of this resolution shall not be deemed to establish a legal obligation on the part of the Issuer or the City Council to issue revenue bonds for the Project nor does it constitute an approval or waiver by the City- of Rosemount of any land use, planning, permitting or other municipal approvals required for the Project 3. Officers of the Issuer are hereby authorized to take such further action as may be necessary to carry out the intent and purpose of this Resolution. 4. Any prior resolutions or orders adopted by the City Council, or parts thereof, m conflict herewith are, to the extent of such conflict, hereby repealed, and this Resolution shall be in full force and effect immediately upon its adoption 1885177v1 2 ADOPTED 2006. ATTEST: James D Verbrugge, Deputy City Clerk Morton by: Seconded by: Voted m favor: Voted Against. Members Absent: 1885177v1 3 Wi1Lam H Droste, Mayor STATE OF MINNESOTA COUNTY OF ROSEMOUNT WITNESS My hand officially as said Deputy City Clerk this day of 2006. )ss. I, the undersigned, being the duly qualified and acting Deputy City Clerk of the City of Rosemount (the "Issuer do hereby certify that attached hereto is a compared, true and correct copy of a resolution duly adopted by the City Council of the Issuer at a regular meeung thereof duly called and held on March 21, 2006, as the same relates to the proposed issuance of revenue bonds of the Issuer pursuant to Minnesota Statutes, Sections 469.152 to 469.165, as amended, at the request of Fhnt Hills Resources, LP, a Delaware hmited partnership, that said meeting was duly and pubhcly held in accordance with all apphcable requirements of law, and that the information set forth in the attached Extract of Minutes with respect thereto is true, complete and correct. 1885177v1 James D. Verbrugge, Deputy City Clerk City of Rosemount Dakota County, Mmnesota