HomeMy WebLinkAbout4.F.8. Set Public Hearing for St. Francis Medical Cntr Hlth Facilities Rev. Refunding Bonds, Series 2014Consent Business 4. F. 8.
SHiWOPEE
TO: Mayor and City Council
Mark McNeill, City Administrator
FROM: Julie Linnihan, Finance Director /City Clerk
DATE: 04/15/2014
SUBJECT: Set Public Hearing Date of May 20, 2014 for St. Francis Regional Medical Center
Health Care Facilities Revenue Refunding Bonds, Series 2014
Action Sought
Council should set a Public Hearing date for May 20th, 2014, for the issuance of refunding bonds.
Background
On October 6, 2004, the City of Shakopee (the "City ") issued its Health Care Facilities Revenue
Bonds (St. Francis Regional Medical Center), Series 2004 (the "Prior Bonds "), in the original
aggregate principal amount of $51,520,000. Proceeds of the Prior Bonds were loaned to St.
Francis Regional Medical Center, a Minnesota nonprofit corporation (the "St. Francis ") in order
to (i) finance a portion of the capital costs of all or a portion of
• the construction and equipping of a new inpatient bed tower, the expansion and
improvement of its emergency department facilities,
• the expansion and improvement of its surgery department facilities,
• the expansion and improvement of its Cancer Center,
• the improvement and equipping of the diagnostic and cardiopulmonary services,
• the expansion and improvement of its lab and pharmacy areas,
• the expansion and improvement of support areas, including plant services and administrative
areas,
and other improvements to its acute care hospital facilities located at 1455 St. Francis Avenue in
the City. The action had also (ii) redeemed and prepaid the Adjustable Demand Revenue Notes,
Series 1998 (St. Francis Regional Medical Center), issued by the City on September 1, 1998, in
the original principal amount of $12,036,000, the proceeds of which were used to make capital
improvements to the acute care hospital facilities (collectively, the "Project "). Proceeds of the
Prior Bonds were also used to fund a reserve fund to secure the Prior Bonds, pay interest on the
Prior Bonds through the construction period of the Project, and pay a portion of the costs of
issuance of the Prior Bonds.
St. Francis has requested that the City issue its Health Care Facilities Revenue Refunding Bonds
(St. Francis Regional Medical Center), Series 2014 (the "Bonds "), in a principal amount not to
exceed $55,000,000 in order to redeem and prepay the outstanding principal amount of the Prior
Bonds and thereby refinance the Project. Prior to the approval of the issuance of the Bonds, St.
Francis has asked that the City Council conduct a public hearing in accordance with Section
147(f) of the Internal Revenue Code of 1986, as amended.
The attached resolution calls for a public hearing to be held on May 20, 2014 regarding the
issuance of the Bonds for the benefit of St. Francis Regional Medical Center.
Julie Eddington, from Kennedy and Graven will be available on Tuesday evening to review the
request and respond to any questions.
Recommendation
The Council should establish a Public Hearing date of May 20th, 2014, for the Health Care
Facilities Revenue Refunding Bonds (St. Francis Regional Medical Center) Series 2014.
Budget Impact
No budget impact.
Relationship to Vision
This supports Goal D. Maintain improve and create strong partnerships with other public and
private sector entities.
Requested Action
The Council should adopt the following resolution:
RESOLUTION CALLING FOR A PUBLIC HEARING REGARDING THE ISSUANCE OF
HEALTHCARE FACILITIES REVENUE REFUNDING BONDS FOR THE BENEFIT OF ST.
FRANCIS REGIONAL MEDICAL CENTER
Attachments: Resolution No. 7441
follows:
CITY OF SHAKOPEE, MINNESOTA
RESOLUTION NO. 7441
RESOLUTION CALLING FOR A PUBLIC HEARING REGARDING THE
ISSUANCE OF HEALTH CARE FACILITIES REVENUE REFUNDING BONDS
FOR THE BENEFIT OF ST. FRANCIS REGIONAL MEDICAL CENTER
BE IT RESOLVED by the City Council of the City of Shakopee, Minnesota (the "City "), as
Section 1. Recitals.
1.01. Minnesota Statutes, Sections 469.152 through 469.1655, as amended (the "Act "),
authorizes the City to issue revenue bonds for the following purposes: (i) to finance, in whole or in part,
the cost of the acquisition, construction, reconstruction, improvement, betterment or extension of a
project, defined in the Act as any properties, real or personal, used or useful in connection with a revenue
producing enterprise, whether or not operated for profit, engaged in providing health care services,
including, without limitation, hospitals and related medical facilities; and (ii) to refund, in whole or in
part, bonds previously issued by the City under the authority of the Act and interest on such bonds,
1.02. St. Francis Regional Medical Center, a Minnesota nonprofit corporation (the
"Corporation "), has proposed that the City issue its Health Care Facilities Revenue Refunding Bonds (St.
Francis Regional Medical Center), Series 2014 (the "Series 2014 Bonds "), in one or more series, in a
principal amount not to exceed $55,000,000. The proceeds of the Series 2014 Bonds are to be applied to
redeem and prepay the outstanding principal amount of the Health Care Facilities Revenue Bonds (St.
Francis Regional Medical Center), Series 2004 (the "Prior Bonds "), issued by the City on
October 6, 2004, in the original aggregate principal amount of $51,520,000. Proceeds of the Series 2014
Bonds may also be used to fund one or more reserve funds for the Series 2014 Bonds and to pay the costs
of issuing the Series 2014 Bonds.
1.03. Proceeds of the Prior Bonds were loaned to the Corporation and applied by the
Corporation to (i) finance a portion of the capital costs of all or a portion of the construction and
equipping of a new inpatient bed tower, the expansion and improvement of its emergency department
facilities, the expansion and improvement of its surgery department facilities, the expansion and
improvement of its Cancer Center, the improvement and equipping of the diagnostic and cardiopulmonary
services, the expansion and improvement of its lab and pharmacy areas, and the expansion and
improvement of support areas, including plant services and administrative areas, and other improvements
to its acute care hospital facilities located at 1455 St. Francis Avenue in the City; and (ii) redeem and
prepay the Adjustable Demand Revenue Notes, Series 1998 (St. Francis Regional Medical Center), issued
by the City on September 23, 1998, in the original principal amount of $12,036,000, the proceeds of
which were used to make capital improvements to the acute care hospital facilities (collectively, the
"Project "). Proceeds of the Prior Bonds were also used to fund a reserve fund to secure the Prior Bonds,
pay interest on the Prior Bonds through the construction period of the Project, and pay a portion of the
costs of issuance of the Prior Bonds. The Project is owned and operated by the Corporation.
1.04. Under certain circumstances, Section 147(f) of the Internal Revenue Code of 1986, as
amended, and regulations promulgated thereunder, requires that prior to the issuance of refunding bonds,
the issuer of such bonds must conduct a public hearing.
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Section 2. Required Actions.
2.01. The City Council will meet at 7:00 p.m. on Tuesday, May 20, 2014, to conduct a public
hearing on the Project and the proposed issuance of the Series 2014 Bonds.
2.02. The City Clerk is hereby authorized and directed to publish a notice of public hearing in
the form required by Section 147(f) of the Code, in substantially the form attached hereto as EXHIBIT A,
in the Shakopee Valley News, the official newspaper of the City and a newspaper of general circulation in
the City. The notice shall be published once at least fourteen (14) days prior to the date of the public
hearing.
2.03. The Corporation shall pay to the City any and all costs paid or incurred by the City in
connection with the Series 2014 Bonds or the refinancing of the Project, whether or not the refinancing is
carried to completion and whether or not the Series 2014 Bonds are issued.
Section 3. Effective Date. This resolution shall be in full force and effect from and after its
passage.
Approved by the City Council of the City of Shakopee, Minnesota, this 15th day of April, 2014.
Mayor
ATTEST:
City Clerk
442331v2 JAE SH155 -337 2
EXHIBIT A
NOTICE OF PUBLIC HEARING
CITY OF SHAKOPEE, MINNESOTA
NOTICE OF PUBLIC HEARING ON THE ISSUANCE OF HEALTH CARE
FACILITIES REVENUE REFUNDING BONDS UNDER MINNESOTA
STATUTES, SECTIONS 469.152 THROUGH 469.1655, AS AMENDED
NOTICE IS HEREBY GIVEN that the City Council of the City of Shakopee, Minnesota (the
"City "), will hold a public hearing on Tuesday, May 20, 2014, at or after 7:00 p.m. at City Hall, 129
Holmes Street South in the City, on a proposal that the City Council authorize the issuance by the City of
health care facilities revenue refunding bonds, in one or more series, under Minnesota Statutes, Sections
469.152 through 469.1655, as amended (the "Act "), for the benefit of St. Francis Regional Medical
Center, a Minnesota nonprofit corporation (the "Corporation "). The revenue bonds proposed to be issued
by the City for the benefit of the Corporation (the "Bonds ") will be applied by the Corporation to redeem
and prepay the outstanding principal amount of the Health Care Facilities Revenue Bonds (St. Francis
Regional Medical Center), Series 2004 (the "Prior Bonds "), issued by the City on October 6, 2004, in the
original aggregate principal amount of $51,520,000. The Corporation applied the proceeds of the Prior
Bonds to (i) finance a portion of the capital costs of all or a portion of the construction and equipping of a
new inpatient bed tower, the expansion and improvement of its emergency department facilities, the
expansion and improvement of its surgery department facilities, the expansion and improvement of its
Cancer Center, the improvement and equipping of the diagnostic and cardiopulmonary services, the
expansion and improvement of its lab and pharmacy areas, and the expansion and improvement of
support areas, including plant services and administrative areas, and other improvements to its acute care
hospital facilities located at 1455 St. Francis Avenue in the City; and (ii) redeem and prepay the
Adjustable Demand Revenue Notes, Series 1998 (St. Francis Regional Medical Center), issued by the
City on September 23, 1998, in the original principal amount of $12,036,000, the proceeds of which were
used to make capital improvements to the acute care hospital facilities (collectively, the "Project ").
Proceeds of the Prior Bonds were also used to fund a reserve fund to secure the Prior Bonds, pay interest
on the Prior Bonds through the construction period of the Project, and pay a portion of the costs of
issuance of the Prior Bonds. The Project is owned and operated by the Corporation. Proceeds of the
Bonds may also be used to fund one or more reserve funds for the Bonds and to pay the costs of issuing
the Bonds.
Following the public hearing, the City Council will consider adoption of a resolution approving
the issuance of the Bonds. The aggregate face amount of the Bonds proposed to be issued to refund the
Prior Bonds and refinance the Project is presently estimated not to exceed $55,000,000. The Bonds will
be issued by the City and will constitute limited obligations of the City payable solely from the revenues
expressly pledged to the payment thereof, and will not constitute a general or moral obligation of the City
and will not be secured by the taxing power of the City or any assets or property of the City except
interests in the Project that may be granted to the City in conjunction with this financing.
All interested persons may appear and be heard at the time and place set forth above.
Dated: [Date of Publication]
CITY OF SHAKOPEE, MINNESOTA
442331v2 JAE SH155 -337 A -1