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HomeMy WebLinkAbout01. 17-409 AUGUST 22, 2017 17-409 RESOLUTION (CARRIED 7-0 LOST LAID OVER WITHDRAWN ) PURPOSE: APPROVE FINAL RESOLUTION REGARDING REVENUE BOND FINANCING FOR PAINE ART CENTER & GARDENS, INC. PROJECT INITIATED BY: PAINE ART CENTER& GARDENS, INC. BE IT RESOLVED by the City Council of the City of Oshkosh,Wisconsin (the "Issuer"), as follows: Section 1 Recitals. 1.01 Under Wisconsin Statutes, Section 66.1103, as amended (the "Act"), the Issuer is authorized and empowered to issue revenue bonds to finance eligible costs of qualified "pro)ects" (as defined in the Act), and to enter into "revenue agreements" (as defined in the Act) with "eligible participants" (as defined in the Act). 1.02 Pursuant to an Initial Resolution duly adopted on October 25, 2016, the Issuer expressed its intention to issue revenue bonds of the Issuer in an amount not to exceed $2,500,000 (the "Bonds") to finance a pro)ect on behalf of Paine Art Center & Gardens, Inc., a Wisconsin nonstock, nonprofit corporation (the "Borrower"), consisting of construction, creation, and remodeling of certain indoor and outdoor spaces at the Borrower's historic estate located at 1410 Algoma Boulevard and 1313 Elmwood Avenue in the City of Oshkosh, Wisconsin (the "Facilities") including but not limited to the(i) construction and/or rehabilitation of surface parking and driveways and accessibility improvements, (ii) creation of formal gardens and repair of garden walls, (iii) technology upgrades, (iv) signage updates, (v) historic preservation and general maintenance of the Facilities and (vi) payment of professional fees and costs (collectively, the "Pro)ect"). Notice of adoption of the initial resolution adopted on October 25, 2016 was published as provided in the Act, and no petition requesting a referendum upon the question of issuance of the revenue bonds has been filed. 1.03 Pursuant to Wisconsin Statutes, Section 66.1103, as amended, the Issuer may finance a pro)ect which is located entirely within the geographic limits of the Issuer. 1.04 Drafts of the following documents have been submitted to this City Council and are ordered filed in the office of the City Clerk: (a) a Bond Agreement (the "Bond Agreement"),proposed to be entered into among the Issuer, the Borrower,Bank First National, as trustee (the "Trustee") and Bank First National, as original purchaser (the "Original Purchaser"); (b) a Promissory Note from the Borrower to the Issuer, and assigned to the Trustee; and (c) a Tax Compliance Agreement. Section 2 Findings and Determinations. It is hereby found and determined that: (a) based on representations of the Borrower, the Project constitutes a "project" authorized by the Act; (b) a public hearing has been duly held on August 22, 2017 in accordance with the provisions of Section 147(0 of the Internal Revenue Code of 1986, as amended (the "Code"), at which residents of the City of Oshkosh,Wisconsin were given an opportunity to be heard in regard to the proposed issuance of the Bonds and the nature and location of the proposed Project; (c) the purpose of the Issuer's financing costs of the Project is and the effect thereof will be to promote the public purposes set forth in the Act; (d) it is desirable that a series of revenue bonds in the aggregate principal amount not to exceed $1,650,000 be issued by the Issuer upon the terms set forth in the Bond Agreement, under the provisions of which the Issuer's interest in the Bond Agreement (except for certain rights as provided therein) and the loan repayments will be assigned to the Trustee as security for the payment of principal of and interest on and premium, if any, on all the Bonds outstanding under the Bond Agreement; (e) the loan payments provided for in the Bond Agreement, and the formulas set out for revising those payments under the Bond Agreement as required under the Act, are sufficient to produce income and revenue to provide for prompt payment of principal of and interest on and premium,if any, on Bonds issued under the Bond Agreement when due; the amount necessary in each year to pay the principal of and interest on the Bonds is the sum of the principal and interest on the Bonds due in such year, whether on a stated payment date, a redemption date,or otherwise; the Bond Agreement provides that the Borrower shall provide for the maintenance of the Project in good repair, keeping it properly insured; and T under the provisions of the Act, the Bonds shall be limited obligations of the Issuer and the Bonds do not constitute an indebtedness of the Issuer,within the meaning of any state constitutional or statutory provision, and do not constitute nor give rise to a charge against the Issuer's general credit or taxing powers or a pecuniary liability of the Issuer. Section 3 Approvals and Authorizations. 3.01 This resolution shall constitute the approval of the Bonds within the meaning of Section 1470 of the Code, and the Bonds are hereby approved. There is hereby approved the issuance by the Issuer of its tax-exempt revenue bonds (specifically, the Bonds) in an aggregate principal amount not to exceed $1,650,000, for the purpose of financing the Project. 3.02 The Issuer shall proceed to issue its Revenue Bonds, Series 2017 (Paine Art Center& Gardens, Inc. Project), in the aggregate principal amount not to exceed $1,650,000, in the form and upon the terms set forth in the Bond Agreement,which terms,including without limitation,interest rates, redemption provisions and maturity, are for this purpose incorporated in this resolution and made a part hereof. The terms are hereby approved without further action by the Issuer, and the City Manager and City Clerk are authorized and directed to execute and deliver the documents listed in Section 1.04 herein which are hereby approved, together with such subsequent changes as may be requested and approved by bond counsel and the Issuer's attorney, and such other documents, agreements, instruments or certificates as are deemed necessary or desirable by the Issuer's attorney and bond counsel,including an Internal Revenue Service Form 8038. The City Manager and the City Clerk are authorized and directed to execute and seal the Bonds as prescribed in the Bond Agreement and to deliver them to the Trustee (together with a certified copy of this resolution and any other documents required by the Bond Agreement) for authentication and delivery to the Original Purchaser. 3.03 The publication in the official newspaper of the Issuer of the notice for the public hearing referred to in Section 2(b) of this resolution,and such notice of public hearing as so published, are hereby ratified. 3.04 The City Manager and the City Clerk and other officers of the Issuer are authorized to prepare and furnish to the Trustee and bond counsel certified copies of all proceedings and records of the Issuer relating to the Bonds,and such other affidavits and certificates as may be required by the Trustee and bond counsel to show the facts relating to the legality and marketability of the Bonds as such facts appear from the books and records in the officers' custody and control or as otherwise known to them. 3.05 The approval hereby given to the various documents referred to in this resolution includes the approval of such additional details therein as may be necessary and appropriate for their completion and such modifications thereto, deletions therefrom and additions thereto as may be approved by the Issuer's attorney and bond counsel. The execution of any document by the appropriate officer or officers of the Issuer herein authorized shall be conclusive evidence of the approval by the Issuer of such document in accordance with the terms hereof. 3.06 Notice of sale of the Bonds, in the form attached hereto as Exhibit A, shall be published in the official newspaper of the Issuer as a class 1 notice under Chapter 985 of the Wisconsin Statutes. 3.07 The Bonds shall be limited obligations of the Issuer payable by it solely from revenues and income derived by or for the account of the Issuer from or for the account of the Borrower pursuant to the Bond Agreement. As security for the payment of the principal of, premium,if any, and interest on the Bonds, the Issuer shall pledge and assign to the Trustee all of its right, title and interest in and to the trust estate described in the Bond Agreement. 3.08 All out-of-pocket costs of the Issuer,including attorneys' fees,in connection with the issuance and sale of the Bonds shall be paid from the proceeds of the Bonds or by the Borrower. Adopted: August 22, 2017 CITY OF OSHKOSH,WISCONSIN By: Steve Cummings,Mayor Attest: Pamela R. Ubrig, City Clerk EXHIBIT A NOTICE TO THE ELECTORS On August 22, 2017, a resolution was offered,read, approved and adopted whereby the City of Oshkosh,Wisconsin authorized the issuance and sale of its Revenue Bonds, Series 2017 (Paine Art Center & Gardens,Inc. Pro)ect) in an amount not to exceed $1,650,000 (the `Bonds"). The closing of this bond sale was held on , 2017. A copy of all proceedings had to date with respect to the authorization and sale of said Bonds is on file and may be examined in the office of the City Clerk, 215 Church Avenue, Oshkosh,Wisconsin. This notice is given pursuant to Section 893.77, Wisconsin Statutes, which provides that an action or proceeding to contest the validity of such financing, for other than constitutional reasons, must be commenced within 30 days after the date of publication of this notice. Pamela R. Ubrig, City Clerk City of Oshkosh,Wisconsin TO: Mayor and Members of the Common Council FROM: Lynn A. Lorenson, City Attorney DATE: August 17, 2017 RE: Approve Final Resolution regarding Revenue Bond Financing for Paine Art Center & Gardens, Inc. Project. Background The City Council adopted an Initial Resolution on October 25, 2016 for the issuance of industrial revenue bonds ("IRB's") for Paine Art Center & Gardens, Inc. to finance a project including the construction, creation and remodeling of indoor and outdoor spaces, rehabilitation of surface parking and driveways, creation of formal gardens and improvements to garden walls, technology upgrades, signage updates, general maintenance and payment of professional fees and costs. The Paine is now asking the Council to approve a Final Resolution to allow the Bonds to be issued. Analysis A municipality may issue IRB's for the benefit of a private entity for authorized projects. The use of IRB's provides a tax benefit to the holder of the bonds since the holders may exclude the interest of the bonds from gross income for federal tax purposes and allows financing at a lower interest rate for the borrower. In most cases the bonds are purchased by a lender who looks solely to the borrower for repayment. If the borrower is not able to meet the obligations of the bonds, the lender must enforce its rights solely against the borrower. Industrial revenue bonds are not general obligations of the City. The City will not be liable for the payment of the principal or interest on the bonds and will not be responsible for administering the bonds. The bonds will not count against the city's borrowing capacity. City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, Wl 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us Fiscal Impact There is no anticipated fiscal impact to this resolution. All costs of issuance and administration of the bonds are included in the bond issuance costs or paid by the requestor directly. The City does have the City's bond counsel review requests for IRB's, however those expenses are charged back to the requestor. Respe eully Submitted, rLYrT—A orenso City Attorney Approved: 7kA. "�-XV 4W Rohlofff City Manager City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5000 http://www.ci.oshkosh.wi.us