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HomeMy WebLinkAbout20. 16-183APRIL 12, 2016 16-183 RESOLUTION (CARRIED__6-0___ LOST ________ LAID OVER ________ WITHDRAWN _________) PURPOSE: INITIAL RESOLUTION REGARDING REVENUE BOND FINANCING FOR OSHKOSH COMMUNITY YOUNG MEN’S CHRISTIAN ASSOCIATION, INC. ($15,000,000.00) INITIATED BY: OSHKOSH COMMUNITY YOUNG MEN’S CHRISTIAN ASSOCIATION, INC. WHEREAS, Section 66.1103 of the Wisconsin Statutes (the “Act”) authorizes the City of Oshkosh, Wisconsin (the “Issuer”), to authorize the issuance and sale of bonds by the Issuer to construct, equip, re-equip, acquire by gift, lease or purchase, install, reconstruct, rebuild, rehabilitate, improve, supplement, replace, maintain, repair, enlarge, extend or remodel industrial projects; and WHEREAS, the Oshkosh Community Young Men’s Christian Association, Inc., a Wisconsin nonstock, nonprofit corporation, and/or a related entity, and/or a limited liability entity to be formed (the “Borrower”), desires to complete a project to be owned by the Borrower consisting of financing the (1) construction of an approximately 78,000 square foot facility located at 324 Washington Ave., Oshkosh, Wisconsin 54901 (“Washington Ave. Facility”) and the acquisition and installation of furniture, fixtures and equipment at the Washington Ave. Facility, (2) resurfacing of an existing parking lot at the Borrower’s thth facility located at 3303 W. 20 Ave., Oshkosh, Wisconsin, 54902 (the “20 Ave. Facility”), th construction of an additional parking lot at the 20 Avenue Facility and the development th and construction of athletic fields at the 20 Avenue Facility, (3) construction of racquetball courts at the Borrower’s facility located at 640 E. County Trunk Y, Oshkosh, Wisconsin, 54901 (the “Tennis Center”) and remodeling of locker rooms at the Tennis Center and (4) the payment of professional fees and costs (collectively, the “Project”), all of which are used as recreational facilities in pursuit of the Borrower’s exempt purpose and would contribute to the well-being of the City of Oshkosh, Wisconsin; and WHEREAS, the cost of the Project is presently estimated not to exceed $15,000,000 and the amount proposed to be financed with one or more issues or series of tax-exempt and/or taxable revenue bonds (the “Bonds”) issued under the Act does not exceed $15,000,000; and WHEREAS, it is the public interest of the Issuer to promote, attract, stimulate, rehabilitate and revitalize commerce, industry and manufacturing, to promote the betterment of the economy of the Issuer; and APRIL 12, 2016 16-183 RESOLUTION CONT’D WHEREAS, the Borrower has requested that the Issuer now approve an initial resolution (the “Initial Resolution”) providing for the financing of the Project in an amount not to exceed $15,000,000; and WHEREAS, the Issuer is a municipality organized and existing under and pursuant to the laws of the State of Wisconsin, and is authorized to enter into revenue agreements with eligible participants to issue revenue bonds with respect to the Project whereby eligible participants agree to cause said Project to be constructed and to pay the Issuer an amount of funds sufficient to provide for the prompt payment when due of the principal and interest on said revenue bonds; and WHEREAS, the Issuer and Borrower will enter into a Memorandum of Agreement under the terms of which the Issuer agrees, subject to the provisions of the Memorandum of Agreement, to issue its revenue bonds to provide financing of all or a portion of the costs of the Project. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Oshkosh, Wisconsin, as follows: 1. The form, terms and provisions of the attached Memorandum of Agreement are hereby approved. The City Manager of the Issuer is hereby authorized to execute, and the City Clerk of the Issuer is hereby authorized to attest and to affix the official seal of the Issuer to, and to deliver a Memorandum of Agreement with the Borrower in substantially the same form as the attached Memorandum of Agreement, any changes in the execution copy being approved by their signatures, which Memorandum of Agreement is hereby made a part of this Initial Resolution. 2. Based upon representations of the Borrower, it is the finding and determination of the City Council that the Project is a qualified “project” within the meaning of Section 66.1103(2)(k) the Act and that the Borrower is an “eligible participant” within the meaning of the Act. The Issuer intends to: (a) Finance the Project in an amount not to exceed $15,000,000; and (b) Issue revenue bonds in one or more series of tax-exempt and/or taxable revenue bonds (the “Bond(s)”), in an amount not to exceed $15,000,000 in order to finance costs of the Project, upon the terms and conditions set forth in the Memorandum of Agreement. 3. The aforesaid plan of financing contemplates, and is conditioned upon, the following: (a) The Bonds shall never constitute an indebtedness of the Issuer within the meaning of any state constitutional provision or statutory limitation; APRIL 12, 2016 16-183 RESOLUTION CONT’D (b) The Bonds shall not constitute or give rise to a pecuniary liability of the Issuer or a charge against its general credit or taxing powers, including but not limited to: 1. Liability for failure to investigate or negligence in the investigation of the financial position or prospects of the Borrower, a user of the Project or any other person or for failure to consider, or negligence concerning, the adequacy of terms of, or collateral security for, the Bonds or any related agreement to protect interests of holders of the Bonds; and 2. Any liability in connection with the issuance or sale of the Bonds, for representations made, or for the performance of the obligation of any person who is a party to a related transaction or agreement except as specifically provided in the Act or by an express provision of the Bonds or a related written agreement to which the Issuer is a party; (c) The Project shall be subject to property taxation as contemplated by the Act in the same amount and to the same extent as though the Project were not financed with revenue bonds; (d) The Borrower shall find a purchaser for all of the Bonds; (e) The City’s out-of-pocket costs, including but not limited to legal fees and Trustee’s fees, in connection with the issuance and sale of the Bonds shall be paid by the Borrower; and (f) A notice of public hearing required by federal law for purposes of Section 147(f) of the Internal Revenue Code, as amended, shall be published in a newspaper of general circulation in the City of Oshkosh and a public hearing shall be held to provide interested individuals or parties the opportunity to testify as to the Project and the issuance of the Bonds. 4. The aforesaid plan of financing shall not be legally binding upon the Issuer nor be finally implemented unless and until: (a) The terms and provisions of the same are authorized and approved by a further resolution of the City Council which shall be solely within the discretion of the City Council; (b) The City Clerk shall cause notice of adoption of this Initial Resolution, in the form attached hereto as Exhibit A, to be published once in a newspaper of general circulation in the City of Oshkosh, and the electors of the City of Oshkosh shall have been APRIL 12, 2016 16-183 RESOLUTION CONT’D given the opportunity to petition for a referendum on the matter of the aforesaid Bond issue, all as required by law; (c) Either no such petition shall be timely filed or such petition shall have been filed and said referendum shall have approved the Bond issue; (d) The City Clerk shall have received an employment impact estimate issued under Section 238.11 of the Wisconsin Statutes; (e) All documents required to consummate the financing have been duly authorized and delivered; (f) The Issuer and the Borrower have resolved all land use and special use issues with respect to the affected property and the Project; and (g) All provisions of the Act shall have been satisfied. 5. Pursuant to the Act, all requirements that the Project be subject to the contracting requirements contained in Section 66.1103 are waived, the Borrower having represented that it is able to negotiate satisfactory arrangements for completing the Project and that the Issuer's interests are not prejudiced thereby. 6. The Issuer hereby finds, based on information provided by the Borrower, that the Project will significantly increase the number of persons traveling to the City of Oshkosh for business or recreation. 7. The City Clerk is directed, following adoption of this Initial Resolution (i) to publish notice of such adoption not less than one time in the official newspaper of the City of Oshkosh, Wisconsin, such notice to be in substantially the form attached hereto as Exhibit A and (ii) to file a copy of this Initial Resolution, together with a statement indicating the date the Notice to Electors was published, with the Wisconsin Economic Development Corporation within twenty (20) days following the date of publication of such notice. 8. This Initial Resolution is an “initial resolution” within the meaning of the Act and official action toward issuance of the Bonds for purposes of Sections 103 and 144 of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder. Furthermore, it is the reasonable expectation of the Issuer, based on information provided by the Borrower, that proceeds of the Bonds may be used to reimburse expenditures made on the Project prior to the issuance of the Bonds. The maximum principal amount of debt expected to be issued for the Project on the date hereof is $15,000,000. This statement of official intent is made pursuant to Treasury Regulations §1.150-2. APRIL 12, 2016 16-183 RESOLUTION CONT’D Passed and adopted at a regular meeting of the City Council of the City of Oshkosh, Wisconsin this 12th day of April, 2016. APPROVED: Steve Cummings, Mayor ATTEST: Pamela R. Ubrig, City Clerk EXHIBIT A NOTICE TO ELECTORS OF THE CITY OF OSHKOSH, WISCONSIN TAKE NOTICE that the City Council of the City of Oshkosh, Wisconsin (the “Issuer”), at a regular meeting held at City Hall, 215 Church Avenue, Oshkosh, Wisconsin, on April 12, 2016, adopted an Initial Resolution pursuant to Section 66.1103 of the Wisconsin Statutes, as amended, expressing the intention to issue not to exceed $15,000,000 of revenue bonds of the Issuer (the “Bonds”) on behalf of the Oshkosh Community Young Men’s Christian Association, Inc., a Wisconsin nonstock, nonprofit corporation, and/or a related entity, and/or a limited liability entity to be formed (the “Borrower”). The Borrower desires to complete a project consisting of financing the (1) construction of an approximately 78,000 square foot facility located at 324 Washington Ave., Oshkosh, Wisconsin 54901 (“Washington Ave. Facility”) and the acquisition and installation of furniture, fixtures and equipment at the Washington Ave. Facility, (2) th resurfacing of existing parking lot at the Borrower’s facility located at 3303 W. 20 Ave., th Oshkosh, Wisconsin, 54902 (the “20 Ave. Facility”), construction of an additional parking th lot at the 20 Avenue Facility and the development and construction of athletic fields at th the 20 Avenue Facility, (3) construction of racquetball courts at the Borrower’s facility located at 640 E. County Trunk Y, Oshkosh, Wisconsin, 54901 (the “Tennis Center”) and remodeling of locker rooms at the Tennis Center and (4) the payment of professional fees and costs (collectively, the “Project”), all of which are used as recreational facilities in pursuit of the Borrower’s exempt purpose. The Borrower has represented that the net number of full-time equivalent jobs which the Project is expected to create on the Project site within three years is 12. Based on information provided by the Borrower, the Project will significantly increase the number of persons traveling to the City of Oshkosh for business or recreation. Pursuant to the terms of Section 66.1103 of the Wisconsin Statutes, all requirements that the Project be subject to the contracting requirements contained in Section 66.1103 are waived, the Borrower having represented that it is able to negotiate satisfactory arrangements for completing the Project and that the Issuer's interests are not prejudiced thereby. THE BONDS SHALL NEVER CONSTITUTE AN INDEBTEDNESS OF THE ISSUER, NOR SHALL THE BONDS GIVE RISE TO ANY PECUNIARY LIABILITY OF THE ISSUER, NOR SHALL THE BONDS BE A CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWERS OF THE ISSUER. RATHER, THE BONDS SHALL BE PAYABLE SOLELY FROM THE REVENUES AND OTHER AMOUNTS TO BE DERIVED PURSUANT TO THE REVENUE AGREEMENT RELATING TO SAID PROJECT TO BE ENTERED INTO BETWEEN THE ISSUER AND THE BORROWER. The Initial Resolution may be inspected in the office of the City Clerk at 215 Church Avenue, Oshkosh, Wisconsin, during business hours. TAKE FURTHER NOTICE THAT THE ELECTORS OF THE CITY OF OSHKOSH MAY PETITION FOR A REFERENDUM ON THE QUESTION OF THE BOND ISSUE. Unless within thirty (30) days from the date of the publication of this Notice a petition signed by not less than five percent (5%) of the registered electors of the City of Oshkosh is filed with the City Clerk requesting a referendum on the question of the issuance of the Bonds, the Issuer will issue the Bonds without submitting the proposition for the electors' approval. If such petition is filed as aforesaid, then the Bonds shall not be issued until approved by a majority of the electors of the City of Oshkosh voting thereon at a general or special election. Pamela R. Ubrig, City Clerk City of Oshkosh, Wisconsin MA EMORANDUM OF GREEMENT TMA (the “Agreement”) is between theC HIS EMORANDUM OF GREEMENT ITY OF O,W (the “Issuer”) and OCYM’C SHKOSH ISCONSINSHKOSH OMMUNITY OUNG ENS HRISTIAN A,I. a Wisconsin nonstock, nonprofit corporation(the “Borrower”). SSOCIATION NC 1. Preliminary Statement. Among the matters of mutual inducement which have resulted in this Agreement are the following: (a) The Borrower wishes to finance all or a portion of the costs of the project more completely described in the Issuer’s Resolution No. 2016- ___ (the “Resolution”), to be located in the City of Oshkosh, Wisconsin and to be owned and operated by the Borrower or its affiliate or its designee (the “Project”). The Borrower requests that the Issuer issue its revenue bonds in an aggregate principal amount not to exceed $15,000,000 (the “Bonds”), to finance all or a portion of the costs of the Project pursuant to the provisions of the laws of the State of Wisconsin and the Internal Revenue Code of 1986, as amended (the “Code”). (b) The Bonds shall be special, limited obligations of the Issuer payable solely and only out of the revenues and receipts and other amounts received by or on behalf of the Issuer, pursuant to a loan agreement, lease agreement or other financing agreement between the Issuer and the Borrower or its affiliate or designee. The Bonds and the interest thereon shall not constitute an indebtedness or a loan of credit of the Issuer, the State of Wisconsin or any political subdivision thereof, within the meaning of any constitutional or statutory provisions, and no owner or holder of any such revenue bonds shall have the right to compel any exercise of the taxing power of the Issuer, the State of Wisconsin or any political subdivision thereof to pay the principal of, premium, if any, or interest on the Bonds. (c) Subject to due compliance with all requirements of law and the provisions set forth in the Initial Resolution, the Issuer, by virtue of such authority as may now or hereafter be conferred, subject to the holding a public hearing on the financing of the Project through the issuance of the Bonds and matters disclosed at said public hearing, and subject to receipt of adequate assurance from the Borrower or its affiliate or designee that there are one or more purchasers for the Bonds, will issue and sell the Bonds in an aggregate principal amount not to exceed a total of $15,000,000, to pay all or a portion of the costs of the Project. 2. Undertakings on the Part of the Issuer. Subject to the conditions above stated, the Issuer hereby agrees as follows: (a) Upon final determination of the details of the financing and provided that, on or before December 31, 2016, the Issuer and the Borrower shall have agreed to mutually acceptable terms for the Bonds and the contracts, agreement and proceedings related thereto, including but not limited to an agreement for the sale of the Bonds, the Issuer will use all reasonable efforts to take the further steps necessary to authorize the issuance and 16-183 Initial Resolution YMCA Bonds - Attachment 2241611 sale of the Bonds in an amount not to exceed an aggregate principal amount of $15,000,000, pursuant to the laws of the State of Wisconsin as then in effect. (b) It will enter into a loan agreement, lease agreement or other financing agreement with the Borrower or its affiliate or designee, whereby the Borrower or its affiliate or designee will pay to, or on behalf of, the Issuer such sums as shall be sufficient to pay when due the principal of and interest and redemption premium, if any, on the Bonds as and when the same shall become due and payable. (c) It will take such further action and adopt such further proceedings as may be required to implement the aforesaid undertakings or as it may deem appropriate in pursuance thereof. 3. Undertakings on the Part of the Borrower. Subject to the conditions above stated, the Borrower hereby agrees as follows: (a) It will use all reasonable efforts to find one or more purchasers for the total amount of Bonds prior to requesting any further approval by the Issuer for such issue. (b) Contemporaneously with the delivery of the Bonds it or its affiliate or designee will enter into a loan agreement, lease agreement or other financing agreement or such other instrument, with the Issuer, under the terms of which the Borrower or its affiliate or designee will obligate itself to pay to or on behalf of the Issuer sums sufficient in the aggregate to pay the principal of and interest and redemption premium, if any, on the Bonds as and when the same shall become due and payable. (c) It, or its affiliate or designee, will pay all fees, costs and expenses related to the issuance of the Bonds and will pay directly to the Issuer the Issuer’s fees and expenses (including, without limitation the fees and expenses of its counsel) in connection with the issuance of the Bonds. (d) It will take such further action and adopt such further proceedings as may be required to implement the aforesaid undertakings or as it may deem appropriate in pursuance thereof. 4. General Provisions. (a) All commitments of the Issuer under paragraph 2 hereof and of the Borrower under paragraph 3 hereof are subject to the conditions that on or before December 31, 2016 (or such other date as shall be mutually satisfactory to the Issuer and the Borrower), the Issuer and the Borrower shall have agreed to mutually acceptable terms and conditions of the loan agreement, lease agreement or other financing agreement or other instrument referred to in paragraphs 2 and 3 above and of the Bonds and other instruments or proceedings relating to the Bonds. (b) If the events set forth in (a) of this paragraph do not take place within the time set forth or any extension thereof and the Bonds in an amount of approximately the amount stated above are not sold within such time, the Borrower agrees that it will reimburse the Issuer for all -2- reasonable and necessary direct out-of-pocket expenses which the Issuer and its special counsel may incur at the request of the Borrower arising from the execution of this Agreement and the performance by the Issuer of its obligations hereunder, and this Agreement shall thereupon terminate. IWW, the parties hereto have entered into this agreement by their N ITNESS HEREOF officers thereunto duly authorized as of the 12th day of April, 2016. CO,W ITY OF SHKOSH ISCONSIN By _______________________________ Mark A. Rohloff City Manager [S] EAL A: TTEST ______________________________ Pamela R. Ubrig City Clerk OCYM’ SHKOSH OMMUNITY OUNG ENS CA,I. HRISTIAN SSOCIATION NC By _______________________________ President/CEO A: PPROVED AS TO FORM ______________________________ Lynn A. Lorenson City Attorney -3- CITY HALL 215 Church Avenue P. 0. Box 1130 Oshkos 5 902-�1130 City of Oshkosh � � OJHKO.fH TO: Honorable Mayor and Members of the Common Council FROM: Lynn A. Lorenson, City Attorney DATE: April 7, 2012 RE: Initial Resolution Regarding Revenue Bond Financing for Oshkosh Community Young Men's Christian Association, Inc. BACKGROUND The Oshkosh Community Young Men's Christian Association, Inc. has requested the Council consider the adoption of an Initial Resolution with respect to revenue bond financing to assist with the construction of an approximately 78,000 square foot facility located at 324 Washington Ave., ("Washington Ave. Facility") and the acquisition and installation of furniture, fixtures and equipment at the Washington Ave. Facility, resurfacing of an existing parking lot at the YMCA facility located at 3303 W. 20th Ave., (the "20th Ave. Facility"), construction of an additional parking lot at the 20t" Avenue Facility and the development and construction of athletic fields at the 20th Avenue Facility, construction of racquetball courts at the YMCA facility located at 640 E. County Trunk Y, (the "Tennis Center") and remodeling of locker rooms at the Tennis Center and the payment of professional fees and costs related to the bond financing. The total estimated costs of these various projects is presently estimated not to exceed $15,000,000.00. ANALYSIS Federal and state laws allow municipalities to issue municipal bonds as a conduit issuer for certain purposes in compliance with all of the law's requirements. The issuance of these bonds provides a benefit to the underlying organization by providing the organization funding at a significantly reduced interest rate compared to other types of financing. The statutes require that the authorization for issuance for revenue bonds by the municipality be done in two stages, by consideration of an initial and final resolution related to the project. The initial resolution is the first step in this process and does not commit the City to issue the bonds at this time. It is a statement of the intent to issue bonds pending the satisfactory negotiation of final terms. In this case, the Oshkosh Community Young Men's Christian Association, Inc. has requested the Council pass an initial resolution indicating an intent to issue up to $15,000,000 in revenue bonds for the purpose of constructing a new facility at their Washington Avenue location, acquiring the necessary furniture, fixtures and equipment for that facility, resurfacing the parking facilities at the Washington Avenue and construction of additional parking facilities at the 20th Avenue location, development and construction of athletic fields at the 2ptn Avenue location and racquet ball courts at the Tennis Center, remodeling of locker rooms at the Tennis Center and to pay professional and financing fees related to the project. The Oshkosh Community Young Men's Christian Association, Inc. will enter into an agreement with the City of Oshkosh to pay for all costs that the City may incur related to the approval and issuance of the bonds, including the City's costs for review by counsel. A copy of the proposed agreement is attached to the Resolution. FISCAL IMPACT The bonds are municipal bonds but are not general obligations of the City and do not count against the City's borrowing capacity. There is no anticipated fiscal impact to the City from the proposed borrowing. The Initial Resolution would provide the property owner with the opportunity to secure lower interest rate, tax-exempt bonds in support of the proposed project. The City of Oshkosh would not be liable for payment of principal or interest on the bonds and would not have any ongoing responsibilities for monitoring or reporting with regard to the bonds or the proposed projects. Res ectfully Sub 'tted, ��I,,i;," ���� �. nn A. Lorenson City Attorney Approved: .��a`��• � Mark A. Rohloff City Manager