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HomeMy WebLinkAbout_Public Hearing NOVEMBER 12, 2019 19-588 RESOLUTION (CARRIED 7-0 LOST LAID OVER WITHDRAWN ) PURPOSE: APPROVE ISSUANCE BY THE PUBLIC FINANCE AUTHORITY OF REVENUE BONDS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED $4,200,000 TO FINANCE IMPROVEMENTS TO GRACE LUTHERAN SCHOOL INITIATED BY: GRACE EVANGELICAL LUTHERAN CONGREGATION OF OSHKOSH, WISCONSIN WHEREAS, Grace Evangelical Lutheran Congregation of Oshkosh, Wisconsin, (the 'Borrower"), as a member of the Wisconsin Evangelical Lutheran Synod, a Wisconsin nonstock, nonprofit corporation and an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), has requested that the Public Finance Authority, a public authority existing under the laws of the State of Wisconsin (the "Authority"), issue Revenue Bonds (Grace Lutheran School) Series 2019, in one or more series (the 'Bonds"), in an aggregate principal amount not to exceed $4,200,000, for the following purposes: (a) financing improvements to Grace Lutheran School located at 913 Nebraska Street in the City of Oshkosh, Wisconsin (the "Property') consisting of the (i) rehabilitation and remodel of an existing approximately 13,000 square foot facility (the "Facility") owned and used by the Borrower, (ii) addition and new construction of approximately 14,000 square feet facility to connect to the facility located at 913 Nebraska Street in the City of Oshkosh, (iii) purchase and installation of furniture fixtures and equipment at the Facility, (iv) repayment of construction loans, and (v) payment of certain professional costs and costs of issuance (collectively, the Project"); and (b) paying capitalized interest on the Bonds; and (c) paying all or a portion of the costs of issuance of the Bonds. NOVEMBER 12, 2019 19-588 RESOLUTION CONT'D WHEREAS, the proceeds of the Bonds will be used by the Borrower for rehabilitation or removal of existing facilities and for new construction of a facility owned by the the Borrower; WHEREAS, pursuant to Section 147(f) of the Code, prior to their issuance, the Bonds are required to be approved by the "applicable elected representative" of a governmental unit having jurisdiction over the area in which the Project is located, after a public hearing (the "Hearing") held following reasonable public notice; WHEREAS, pursuant to Section 66.0304(11)(a) of the Wisconsin Statutes, prior to their issuance, bonds issued by the Authority must be approved by the governing body or highest ranking executive or administrator of the political jurisdiction within whose boundaries the project is located; WHEREAS, the Oshkosh Common Council (the "Council") of the City of Oshkosh, Wisconsin (the "City") is the "applicable elected representative" of the City for the Project located within the City limits; WHEREAS, the Borrower has requested that the Council approve the Authority's issuance of the Bonds and the financing of the Project located within the City in order to satisfy the requirements of Section 147(f) of the Code; WHEREAS, the Borrower has requested that the Council approve the financing of the Project and the issuance of the Bonds in order to satisfy the requirements of Section 4 of the Amended and Restated Joint Exercise of Powers Agreement Relating to the Public Finance Authority, dated as of September 28, 2010 (the "Joint Exercise Agreement"), and Section 66.0304(11)(a) of the Wisconsin Statutes; WHEREAS, the Council, following notice duly given in the form attached hereto as Exhibit A (the "TEFRA Notice"),held the Hearing on November 12, 2019 regarding the Authority's issuance of the Bonds and the financing of the Project. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Oshkosh pursuant to and in accordance with the requirements of Section 147(f) of the Code and Section 66.0304(11)(a) of the Wisconsin Statutes and Section 4 of the Joint Exercise Agreement, the Common Council hereby approves (a) the Authority's issuance of the Bonds in an aggregate principal amount not to exceed $4,200,000 and (b) the financing of the Project located in the City. Said approval of the issuance of the Bonds does not constitute an endorsement of the Project, no representation is made or implied NOVEMBER 12, 2019 19-588 RESOLUTION CONT'D as to the validity, enforceability or tax status of the Bonds or any other financing the Authority may issue, no representation is made that this approval is sufficient to satisfy the requirements of the Wisconsin Statutes or the Joint Exercise Agreement, and no representation is made that (i) the TEFRA Notice is satisfactory as to form and content as may be required by the Code for purposes of the Borrower and the Authority, or (ii) the Hearing is sufficient for purposes of the Authority or the Borrower under the Code. BE IT FURTHER RESOLVED that the City has no responsibility for the payment of the principal of or interest on the Bonds or for any costs incurred by the Borrower with respect to the Bonds or the Project. This resolution is effective immediately on its passage. STATE OF WISCONSIN ) ss: COUNTY OF WINNEBAGO ) CERTIFICATION BY CITY CLERK I, Pamela Ubrig, hereby certify that I am the duly qualified and acting City Clerk of the City of Oshkosh, Wisconsin (the "City'), and as such I have in my possession, or have access to, the complete corporate records of the City and its governing body; that I have carefully compared the transcript attached hereto with the aforesaid records; and that said transcript attached hereto is a true, correct and complete copy of all the records in relation to the adoption of 19-XXX APPROVE ISSUANCE BY THE PUBLIC FINANCE AUTHORITY OF REVENUE BONDS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED$4,200,000 TO FINANCE IMPROVEMENTS TO GRACE LUTHERAN SCHOOL and the holding of a public hearing related thereto, and that said proceedings will be recorded in the minutes of the City Council for the City of Oshkosh, Wisconsin. WITNESS my hand and the seal of the County of Winnebago, Wisconsin, this the day of November, 2019. Pamela Ubrig, City Clerk City of Oshkosh, Wisconsin (SEAL) Oshkosh TO: Honorable Mayor and Members of the Common Council FROM: Lynn Lorenson, City Attorney DATE: November 7, 2019 RE: Resolution Approving the Issuance by the Public Finance Authority of Series 2019 Revenue Bonds for Grace Lutheran School in an Aggregate Principal Amount not to exceed $4,200,000.00 BACKGROUND Grace Evangelical Lutheran Congregation of Oshkosh, Wisconsin has requested the City Council pass a resolution in support of the issuance of up to $4,200,000.00 in revenue bonds to support the rehabilitation and remodeling of the existing approximately 13,000 square foot school facility, located at 913 Nebraska Street in the City of Oshkosh, as well as a new addition of approximately 14,000 square feet. The bonds will also support the purchase and installation of furniture, fixtures and equipment at the facility and the costs of financing for the project and bond issuance. Improvements include increased and improved classroom space, improved heating and cooling, new and remodeled restroom facilities, ADA accommodations, and improved safety facilities. Construction of the project has already begun and is expected to be completed in 2020. The total project cost is projected to be approximately$5,200,000.00 with the additional million dollars coming from private donations. The City of Oshkosh Plan Commission found that the General Development Plan and Specific Implementation Plan for the proposed Planned Development project was consistent with the criteria established in Section 30-387(6) of the Oshkosh Zoning Ordinance. On May 28, 2019, the Oshkosh Common Council approved the General Development Plan and Specific Implementation Plan for the proposed Planned Development of the school remodeling and additions, with six conditions. Grace Lutheran has worked with National Exchange Bank and Trust of Fond du Lac with regard to financing of the project. Grace and the Bank are proposing to utilize tax-exempt bond funding through the State Public Finance Authority. City Hall,215 Church Avenue P 0 Box 1 130 Oshkosh,WI 54903-1 130 920.236.5000 http.//www.ci.oshkosh.wi.us The Public Finance Authority (PFA) is a governmental entity created by the legislature and authorized to issue tax-exempt, taxable, and tax conduit bonds for public and private entities, similar to IDRB bonds that the City has been requested to issue in the past. The PFA is sponsored by the National Association of Counties, National League of Cities, Wisconsin Counties Association and League of Wisconsin Municipalities. The PFA was established as an alternative to local government issuance of bonds and reduces cost, staff time and liability to cities and counties in relation to requests for these types of bonds. PFA does provide an opportunity to weigh in on the issuance of bonds within a community through a requirement to hold a public hearing and approve the financing prior to issuance of the bonds by the PFA. It is this hearing and approval that are being requested by Grace Lutheran. Upon holding the hearing and approval of the project, the City will have no further responsibility or liability in connection with the issuance or post issuance compliance activities associated with the bonds. ANALYSIS Attached to this memorandum is a brief explanation of this financing provided by Grace Lutheran's counsel. FISCAL IMPACT There is no anticipated fiscal impact for the City of Oshkosh from approval of the resolution and the proposed amendments. Submitted, Approved: ynn Lorenson Mark Rohloff City Attorney City Manager City Hall,215 Church Avenue P 0 Box 1 130 Oshkosh,WI 54903-1130 920 236 5000 http//www ci oshkosh WI us memo TO: The City of Oshkosh FROM: Attorney William B.Everson DA 1'E: October 28,2019 RE: Grace Lutheran Church and School Bond This memo serves to provide a better understanding of what will be put in front of the Oshkosh Common Council in order for Grace Evangelical Lutheran Congregation of Oshkosh,Wisconsin("Grace Lutheran") to receive a$4,200,000 Revenue Bond(the"Bonds")to finance the renovation and remodel of its current facility located at 913 Nebraska Street(the"Project")in Oshkosh,Wisconsin(the"City")issued by the Public Finance Authority(the"Authority"). The Bonds are expected to be issued pursuant to Section 66.0304 of the Wisconsin Statutes,as amended,by the Authority,a commission organized under and pursuant to the provisions of Sections 66.0301,66.0303 and 66 0304 of the Wisconsin Statutes,as amended(Rider A). The Bonds will be special limited obligations of the Authority payable solely from the loan repayments to be made by Grace Lutheran to the Authonty,and certain funds and accounts established by the bond agreement for the Bonds(Rider B). The Grace Lutheran School facility is currently 13,000 sq.ft. The new construction will be 14,000 sq.ft.and will connect the facilities together. The total cost of this project is$5.2 million dollars. One million dollars has already been privately fundraised,these funds will be used for any religious activities that cannot be financed by a tax-exempt bond issuance. The improvements to Grace Lutheran will enrich the education in the Oshkosh area by increasing classroom space and providing a comfortable workspace for everyone by providing better heating and cooling. Additional facility needs will consist of new and remodeled bathrooms,better public safety and compliance with the Americans with Disabilities Act. The new design environment will allow for more natural light and additional creative learning spaces for the student and facility. The new and improved preschool will be able to hold up to 50 students and the school will be able to accommodate 200+students. National Exchange Bank and Trust has approved up to a$4,200,000 financing commitment to Grace Lutheran Church and School to assist with the completion of the Project. National Exchange Bank and Trust is proposing to utilize tax-exempt bond funding for the Project and will need to partner with the Authority to assist Grace Lutheran Church and School in obtaining this type of lower cost funding. The National Exchange Bank and Trust will be purchasing the Bonds. Based on the age of the existing facilities;and enrollment demand,as well as the necessary safety upgrades and community impact,we believe it is a perfect project to receive this kind of consideration. The construction has already begun and should be complete by early next year. The attached documentation will further describe the plans of Grace Lutheran Church and School. MEMO RIDERS Rider A Section 66.0304(11)(a) of the Wisconsin Statutes requires provides that the Authority may not issue bonds to finance a project within the State of Wisconsin unless all political subdivisions within whose boundaries the project is to be located have approved of the financing of the project through the Authority. Given that the Project is located within the boundaries of the City, the City must approve the Project in order for Grace Lutheran to move forward with the financing. Rider B The City will have no liability on the Bonds whatsoever, and the financing structure will not change the tax status of the Project on the City's tax rolls. Furthermore, the approval of the Project by the City will not constitute an endorsement of the Project, and no representation will be made or implied by the City as to the validity, enforceability or tax status of the Bonds. The City will not make a representation that its approval is sufficient to satisfy the requirements of the Wisconsin Statutes described above.