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2 Centennial Hill RefinancingCITY OF C HASgE 7~00 Market Bouievar(l PO Box 147 Char kassea l,~,II~ 55317 Administration Phone 9522271100 Fax 9522271110 Building Inspections Phone: 952 227 !]80 Fax 952 227 ~,190 Engineering ?!;t',na 95? 22/1160 Fa×:: 952 227 1i70 Finance Phor/e 952227 1140 Fax 952 2,?i; 11 lO Park & Recreation P'~o[ ,,,: 952227 !120 Fax 952 2271110 2S!0 (}e ~ ter B(}~ evard Pho~ e: 952 227 1400 Fax 95?227 S40,I Planning & Natural Resources Fax 952 227 1~10 Public Works 1591 Parx Road Phone 952 227 1300 Fax 952 227 1310 Senior Cenler Phcle 952 227 1125 F~ 952227 1110 Web Site MEMORANDUM TO: FROM: DATE: Mayor & City Council Bruce DeJong, Finance Directo~ ~.~,, . July 30, 2004 SUB J: Public Hearing Regarding Refinancing Centennial Hills Apartment General Obligation/Revenue Bonds Staff has been working with Julie Frick, Carver County Housing & Redevelopment Authority (HRA) Executive Director on refinancing the General Obligation/Revenue Bonds for Centennial Hill Apartments. In August of 1995, the City and Carver County HRA entered into a joint powers agreement for the development of this 65~unit low and moderate income rental housing facility. Through this agreement, the city agreed to give its full faith and credit and tax power for the issuance of $705,000 in Housing Revenue Bonds and $4,131,000 in General Obligation Bonds for construction and equipping the apartments. The city also agreed to create a debt service reserve fund in the amount of $372,310 and to levy $32,000 each year for the city's share of the service charge attributable to the project. Carver County HRA also contributed $31,000 each year for their share of the service charge. Benefits of Refunding the Bonds By refunding the bonds, Carver County HRA would issue a new General Obligation Bond in the amount not to exceed $5,000,000. The outstanding balance for each of these issues is as follows: Originallssue Outstanding Amount Balance Amount Retired G.O. Bonds $4,130,000 $3,595,000 $535,000 Revenue bonds $705,000 $630,000 $75,000 By refunding these bonds, the city would receive its $372,310 debt service reserve funds back and would also be released from its annual cash flow pledge of $32,000. However, the city would still have to give its General Obligation authorization for the new bonds in the amount of $5,000,000. The City of Chanhassen A grc,,vn~g comu',Jl~¥ with mean lakes qualily schools, a c~xarl ~m!] ,:lownk)wn thri;,i[ g bm;n esses ,,,'~indi[ ,:~ trails and beaLJ~liul parks & grea~ p!a,',;~ to live CITY OF CHANHASSEN 7700 Ma ,~t BsJl~.var,J PO B,~x 147 Char hassen Mr.i 5531/ Administration Rhc?e 952227 1100 Fax 952 2271110 Building inspections Pn :,h} 952 ,,~ 1 ,~0 Fax: 952227 1190 Engineering P ,,~ 952 227 116Q Finance Phone 952' 227 1140 Fax: 952 227 1 10 Park & Recrealien Phue 952227 !120 Fix: 952 2271110 2310 C'ult r Bsulevard Prn~s 952 2271400 Fax 952227 1404 Planning & Natural Resources Ph)ne 952 227 1!30 Fax 952 2271110 Public Works !591 Park Phor< 992 2?7 !300 Fax 952 227 1310 Senior Center P~.cue 9522271125 F~, ~z~ 1! 10 Web Site ( iiai/~la%~l i IT'lr'l LJS The resolution before the City Council is to authorize the Carver County HRA issue the refunding bonds and release the EDA from its annual $32,000 tax levy commitment. It also anticipates us amending the joint powers agreement, but those terms have yet to be negotiated. The EDA will also have to meet on August 23 to approve a resolution amending the joint powers agreement. Recommendation Staff recommends that the City Council hold the public hearing regarding issuance of the refinancing bonds. After the public hearing, staff recommends that the City Council approve the attached resolution. This requires a simple majority vote of those present. F:\bruce\Council~2004\Centennia} Hills Public l learing.doc The Cil¥ of Chanhassen · & ]roy,, ng corem ~J y with ciean lakes guality schc}6l!~ ~ cmrr un0 dc:.wnt,)'~s.n thrivinq busiru sses .,*,..inding tm;Is and l)eauTJlL! [}arks A .a pa, e t(, iUe .:,'ork and CITY OF CHANHASSEN, MINNESOTA Resolution No. Approving the issuance by The Carver County Housing And Redevelopment Authority of its Housing Development Refunding Bonds (City of Chanhassen, Minnesota Unlimited Tax General Obligation - Chanhassen Apartments Project), Series 2004 in an aggregate principal amount not to exceed $5,000,000 and the pledge of the full faith and credit of the City of Chanhassen thereto, and authorizing the execution and delivery of related documents. WHEREAS, pursuant to Minnesota Statutes, Sections 469.001 through 469.047 (the "Act"), The Carver County Housing and Redevelopment Authority (the "Authority") is authorized to undertake housing development projects and to issue bonds to finance such projects; and WHEREAS, the Authority has previously issued its Housing and Development Gross Revenue and Limited Tax Bonds (Chanhassen Apartments Project) Series 1995A and its Housing and Development Revenue Bonds (City of Chanhassen, Minnesota Unlimited Tax General Obligation - Chanhassen Apartments Project) Series 1995B (together, the "Prior Bonds") the proceeds of which were used to construct a senior housing facility in the City which is owned by the Authority (the "Project") and which constitutes a "qualified housing development project" under the Act; and WHEREAS, in order to refund the Prior Bonds, the Authority proposes issue its Housing Development Refunding Bonds (City of Chanhassen, Minnesota Unlimited Tax General Obligation - Chanhassen Apartments Project), Series 2004 (the "Refunding Bonds"), in an aggregate principal amount not exceeding $5,000,000, and to pledge the full faith and credit of the City of Chanhassen (the "City") thereto; and WHEREAS, pursuant to Minnesota Statutes, Section 469.034, Subd. 2, the Authority is authorized to pledge the full faith and credit of the City to bonds issued to finance qualified housing development projects following (a) a determination by the Authority that pledged revenues will equal or exceed 110% of the principal and interest due on such bonds for each year, and (b) approval by the City of the principal amount of the Bonds following a public hearing; and WHEREAS, the maximum aggregate principal amount of the Refunding Bonds is within the statutory limitation in Section 469.034, Subd. 2(c) on the amount of such bonds to which the full faith and credit of the City may be pledged; and WHEREAS, on the date hereof, the City has conducted a public hearing following publication of notice pursuant to Minnesota Statutes, Section 469.034, subd. 2; and 2509061vl WHEREAS, in connection with the issuance of the Prior Bonds, the Authority, the City and the Housing and Redevelopment Authority of the City of Chanhassen have entered into that certain Joint Powers Agreement for a Multifamily Housing Revenue Bond Program, dated as of August 1, 1995 (the "Joint Powers Agreement"); and WHEREAS, in connection with the issuance of the Refunding Bonds, the Authority, the City and the City HRA propose to enter into an agreement amending the Joint Powers Agreement; NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Chanhassen, Minnesota, as follows: That the City hereby approves the issuance by the Authority of the Refunding Bonds in an aggregate principal amount of up to $5,000,000, and the pledge by the Authority of the full faith and credit of the City thereto, subject to a final determination by the Authority that the projected revenues pledged to the payment of the Bonds will equal or exceed 110% of the principal and interest due on the Bonds for each year of their term. That the Mayor and City Manager are authorized to execute and deliver on behalf of the City an Amendment to Joint Powers Agreement for a Multifamily Housing Revenue Bond Program in substantially the form on file with the City on the date hereof, with such modifications as may be approved by the Mayor and City Manager, and any related documents as may be necessary or convenient in connection with the issuance of the Refunding Bonds. Execution and delivery of such Amendment shall constitute conclusive evidence that any modifications have been approved by the Mayor and City Manager. Adopted on this 9th day of August, 2004. 2509061vl 2