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Resolution 4359 - Refinance - Loan Agreement Sponsorship for Immanuel Lutheran Home1-675 RESOLUTION NO.4 3 5 9 RESOLUTION RELATING TO A PROJECT AND REFINANCING ON BEHALF OF IMMANUEL LUTHERAN CORPORATION OF KALISPELL, MONTANA AND THE ISSUANCE OF REVENUE BONDS TO FINANCE THE COSTS THEREOF UNDER MONTANA CODE ANNOTATED, TITLE 90, CHAPTER 5, PART 1, AS AMENDED; RATIFYING PRELIMINARY APPROVAL THEREOF BE IT RESOLVED by the City Council of City of Kalispell, Montana (the "City"), as follows: Section 1. Recitals. 1.01. Pursuant to Montana Code Annotated, Title 90, Chapter 5, Part 1, as amended (the "Act"), the City is authorized to enter into agreements upon terms the governing body considers advantageous and not in conflict with the provisions of the Act to issue its revenue bonds and sell such bonds at public or private sale in such manner and at such times as may be determined by this body to be most advantageous; and to loan the proceeds of its revenue bonds for the purpose of defraying the cost of acquiring or improving real and personal properties suitable for use for, among other things, for long-term care facilities. Such revenue bonds may be secured by a pledge of the revenues to be derived by the City from a loan agreement with the borrower, by a mortgage on the project and by such other security devices as may be deemed advantageous. Under the provisions of the Act, any bonds so issued by the City shall be special, limited obligations of the City and the bonds shall not constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers. 1.02. Pursuant to a resolution duly adopted on July 21, 1997 (the "Preliminary Resolution"), this Council gave preliminary approval to the issuance of revenue bonds of the City in the approximate principal amount of $8,500,000 (the "Bonds"), the proceeds of which will be loaned by the City to Immanuel Lutheran Corporation of Kalispell, Montana, a Montana nonprofit corporation (the "Corporation"), to finance all or a portion of the costs of: (a) refunding the City's Housing Facilities Refunding Revenue Bonds (Buffalo Hills Terrace Project), Series 1992 (the "Series 1992 Bonds") issued for the purpose of financing the acquisition and construction of a senior retirement apartment facility, owned and operated by the Corporation, commonly known as Buffalo Hills Terrace (the "Housing Facility"); (b) refinancing loans from Norwest Bank Montana, N.A. outstanding in the amount of $175,000 borrowed for the purpose of .:r-67G financing capital improvements to the Housing Facility and the 149-bed nursing home facility, owned and operated by the Corporation, commonly known as Immanuel Lutheran Home (the "Nursing Facility"); (c) constructing certain improvements to the Nursing Facility and acquiring and installing certain equipment therein (the "Project"); (d) funding a debt service reserve fund for the Bonds; (e) paying costs relating to the issuance of the Bonds. The refunding of the Series 1992 Bonds and the refinancing of the loans from Norwest Bank Montana, N. A. are referred to collectively herein as the "Refunding." 1.03. Pursuant to the Preliminary Resolution, the Council called a public hearing to be held on August 18, 1997. Notice of the time and place of the hearing, the general nature of the Refunding and the Project, the owner and location of the Project and the aggregate face amount of the Bonds to be issued was published once a week for three weeks prior to the date of the hearing. 1.04. All persons who appeared at the public hearing were given an opportunity to express their views with respect to the Refunding and the Project and the issuance of the Bonds. The: Council has considered the views expressed at the public hearing, any written comments filed with the Finance Officer and the information submitted by the Corporation. Section 2. Findings. Based on testimony presented at the public hearing and representations made by the Corporation to this Council to date, this Council hereby makes the following findings, determinations and declarations: (a) The Project, as proposed, will be suitable for use as a long-term care facility eligible for financing under the Act and the City is authorized to issue revenue bonds to defray the costs of making a loan to the Corporation, the proceeds of which will be used to finance a portion or all of the costs of acquiring, construction, equipping and improving the Project, accomplishing the Refunding, funding a debt service reserve fund for the Bonds and paying the costs and expenses incident to the issuance and sale of the Bonds, and to enter into a Loan Agreement with the Corporation requiring loan repayments from the Corporation in amounts sufficient to repay the loan when due and requiring the Corporation to pay all costs of maintaining and insuring the Project, including taxes thereon. (b) The loan repayments to be made by the Corporation under the Loan Agreement, shall be established at a level and payable in installments -2- 1.6'7 at times sufficient to pay all principal of, premium, if any, and interest on the Bonds when due. (c) In authorizing Refunding and the acquisition, construction, furnishing, equipping and improvement of the Project and the issuance of the Bonds, the City's purpose is and the effect thereof will be to promote the public welfare of'the City and its residents by retaining and expanding a revenue -producing enterprise within the City thereby promoting and stimulating economic activity within the City, improving employment opportunities for present and future residents and otherwise furthering the purposes and policies of the Act. (d) The undertaking of the Refunding and the Project and the issuance of the Bonds, in one or more series, to finance all or a portion of the costs thereof are in the public interest. (e) The preliminary findings and determinations of the Council as set forth in the Preliminary Resolution with respect to the Refunding and the Project are hereby ratified and confirmed. Section 3. Authorization and Approval. This Council hereby confirms its prior approvals and authorizations with respect to the Refunding and the Project and the Bonds. Section 4. Preliminary Official Statement. The Finance Officer and other officers of the City, in cooperation with the Corporation and the underwriter for the Bonds, are hereby authorized and directed to prepare a Preliminary Official Statement to be distributed by the underwriter to potential purchasers of the Bonds. The Finance Officer is hereby authorized on behalf of the City to deem the Preliminary Official Statement a "final" official statement as of its date, in accordance with Rule 150-12(b)(1) promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934. Section 5. Payment of _Costs and Expenses. All costs and expenses with respect to the negotiation and preparation of the terms and conditions of the Bonds and the documentation and sale thereof shall be the sole responsibility of and paid for by the Corporation, subject to reimbursement from the proceeds of the Bonds if issued, whether or not the Refunding is accomplished or the Project carried to completion and whether or not the Bonds are issued. Section 6. Commitment Conditional. The adoption of this resolution does not constitute a guarantee or a firm commitment that the City will issue the Bonds as requested by the Corporation. The City retains the right, in its sole discretion, to withdraw from participation and accordingly not issue the Bonds should the Council, at any time prior to the issuance thereof, determine that it is in the best -3- 1678 interests of the City not to issue the Bonds or should the parties to the transaction be unable to reach agreement as to the terms and conditions of any of the documents for the transaction. Section 7. Effective Da. This Resolution shall become effective upon passage. Passed by the City Council of the City of Kalispell, Montana, on this 18th day of August, 1997. Mayor (SEAL) -7 :fA,Ed r. t�. 1