Agenda - Council - 07/12/2022 - Laserfiche WebLink

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TABLE OF CONTENTS Page Page SUMMARY INFORMATION ...........................ii Factors Associated with Education......................................................... INTRODUCTORY STATEMENT..................................................................1 Line of Credit for Operating Capital......................................................29 General.....................................................................................................1 Tax-Exempt Status of the Company and the Charter School..................30 ..........................2 IRS Compliance Program.......................................................Loan of Series 2022 BondProceeds............................... ................30 Mortgage...................................................................................................2 Tax-Exempt Status of the Series 2022A Bonds......................................30 Leases.......................................................................................................2 Changes in Law;Annual Appropriation;Inadequate State Payments.....31 Pledge Agreement and Account Control Agreement................................3 Value of Mortgaged Property.................................................................31 ReserveFund............................................................................................3 Construction Risks.................................................................................31 Special Covenants of the Company and the Charter School.....................3 Environmental Regulations....................................................................32 Miscellaneous ........................4 Maintenance of the School Facilities...................................... Bondholders'Risks...................................................................................4 No Appraisal of the School Facilities.....................................................32 THEISSUER...................................................................................................4 Damage or Destruction...........................................................................33 THE COMPANY.............................................................................................5 Effect of Federal Bankruptcy Laws on Security for the Series 2022 THECHARTER SCHOOL.............................................................................5 Bonds..............................................................................................33 THE SERIES 2022 PROJECT.........................................................................6 Enforcement of Remedies......................................................................33 Planof Refunding.....................................................................................6 Secondary Market..................................................................................33 RefundingFund........................................................................................6 Maintenance of Credit Rating................................................................33 Upper School Campus Land Acquisition..................................................6 No Credit Enhancement Facility............................................................34 Upper School Campus Construction.........................................................7 Failure to Provide Ongoing Disclosure..................................................34 Elementary School Campus Renovations.................................................7 Private School Vouchers........................................................................34 The Owner's Representative and Development Consultant......................7 MDE Rulemaking..................................................................................34 SOURCES AND USES OF FUNDS...............................................................8 Education Reform and Desegregation Litigation....................................34 ESTIMATED DEBT SERVICE SCHEDULE.................................................9 Redemption Prior to Maturity................................................................36 THE SERIES 2022 BONDS..........................................................................10 Forward-Looking Statements.................................................................36 Interest;Maturity;Payment....................................................................10 Additional Indebtedness.........................................................................37 Redemption of Series 2022 Bonds..........................................................10 Cybersecurity Risks...............................................................................37 Noticeof Redemption;Payment.............................................................13 Summary................................................................................................37 SECURITY FOR THE SERIES 2022 BONDS.............................................14 CHARTER SCHOOL FUNDING IN MINNESOTA...................................37 Special,Limited Obligations...................................................................14 State Payments.......................................................................................37 Payments under the Loan Agreement;Assignment of Loan Agreement AUDITED FINANCIAL STATEMENTS OF THE CHARTER SCHOOL .........................................................................................................14 ...............................................................................................................40 Reserve Fund..........................................................................................14 UNAUDITED FINANCIAL STATEMENTS OF THE CHARTER Mortgage.................................................................................................15 SCHOOL...............................................................................................41 Subordination,Non-Disturbance,and Attornment Agreement................15 THE BUDGET PROJECTION.....................................................................41 Leases.....................................................................................................15 TAX MATTERS[[TO BE UPDATED BY BOND COUNSEL]].................41 g ......................15 Tax Exemption of the Series 2022A Bonds............................Pledge A Agreement............................................................. ................41 Additional Bonds....................................................................................17 Other Federal Tax Considerations..........................................................42 Additional Indebtedness..........................................................................18 Bond Premium.......................................................................................42 Various Operating Covenants of the Charter School...............................20 Original Issue Discount..........................................................................43 Defeasance..............................................................................................22 The Series 2022B Bonds........................................................................44 BONDHOLDERS'RISKS... ......................23 Legislative Proposals............................................................... Nature of Special,Limited Obligations...................................................23 BOND RATING...........................................................................................44 Impact of COVID-19 Pandemic..............................................................23 UNDERWRITING........................................................................................44 Dependence on Company's Ability to Pay Loan Repayments;Ability CONTINUING DISCLOSURE....................................................................45 of Charter School to Pay Lease Payments........................................24 ENFORCEABILITY OF OBLIGATIONS...................................................45 Historical State Budget Issues.................................................................25 LEGAL MATTERS......................................................................................46 No Taxing Authority;Dependence on State Payments...........................25 RELATIONSHIPS AMONG THE PARTIES...............................................46 Budget Projection...................................................................................26 ABSENCE OF LITIGATION.......................................................................47 Non-Renewal or Termination of Charter Contract by Authorizer...........26 Issuer......................................................................................................47 Possible Future Unionization of Charter School Workforce...................27 Company and Charter School.................................................................47 Department of Education Approval of Authorizer..................................27 THE TRUSTEE............................................................................................47 Financial Statements...............................................................................27 MISCELLANEOUS......................................................................................47 Property Tax Exemption.........................................................................27 Registration of Series 2022 Bonds.........................................................48 Competition for Students........................................................................28 Interest of Certain Persons Named in this Official Statement.................48 Effect of Student Enrollment upon Receipt of State Payments...............28 Official Statement Certification of the Company and the Charter KeyPersonnel.........................................................................................28 School.............................................................................................48 Self-Management by the Charter School................................................29 APPENDIX A— THE COMPANY,THE CHARTER SCHOOL,AND THE SERIES 2022 PROJECT..................................................A-1 APPENDIX B— MINNESOTA LAWS RELATING TO CHARTER SCHOOLS....................................................................................B-1 APPENDIX C— BUDGET PROJECTION......................................................................................................... .....C-1 APPENDIX D— AUDITED FINANCIAL STATEMENTS OF THE CHARTER SCHOOL FOR THE FISCAL YEAR ENDEDJUNE 3012021..................................................................................................................................................D-1 APPENDIX E— UNAUDITED INTERIM FINANCIAL STATEMENTS OF THE CHARTER SCHOOL FOR THE ELEVEN-MONTH PERIOD ENDED MAY 3112022............................................................................ ..............E-1 .......................................... APPENDIX F— DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF DOCUMENTS.........................................................F-1 APPENDIX G— FORM OF BOND COUNSEL OPINION.......................................................................................................................G-1 APPENDIX H— FORM OF CONTINUING DISCLOSURE AGREEMENT...........................................................................................H-1 APPENDIX I— BOOK-ENTRY ONLY SYSTEM................................. ...................I-1 ................................................................................