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FALCON HEIGHTS CITY COUNCIL MINUTES • May 25, 2005 -3- Presentation of the City's Comprehensive Audited Financial Report for 2004 and presentation of the 2003 GFOA Award for Excellence (continued) Mr. Mayer said there are three major cycles: Cash receipts, cash disbursements and payroll. It is difficult to adequately get that segregation. Based upon their experience, there is not much more the City can do. Mayor Gehrz said that mayors from communities that are considerably larger have told her they get that same reportable condition in their annual audits. Council member Lamb said the CAFR is the most important thing that the City does to manage and account for taxpayers' money. This is the report card for the number one responsibility. It is very good and reassuring to get a good report. Mayor Gehrz said that later on the agenda, the City Council will be talking about conduit bonding and conduit bonding authority. Where will that fit into the City's financial statements? Mr. Mayer said the debt won't be presented on the City's financial statements. The administrative fees will go into the general fund to help with operations. Mayor Gehrz presented Finance Director Olson with the GFOA's Certificate of Achievement for Excellence in Financial Reporting for the City's Comprehensive Annual Financial Report for the • fiscal year ended December 31, 2003. Lindstrom moved acceptance of the City's Comprehensive Annual Financial Report for 2004. The motion was unanimously approved. Notice of intent to hold a public hearin re ardin~ the issuance of multifamily housing revenue bonds to finance a housing_program under Minnesota Statutes Chapter 462C Administrator Worthington said the City Council, at their February workshop, discussed the issue of conduit bonding as an alternate revenue source for Falcon Heights. The City has the authority to conduit issue up to $10 million in bank-qualified, tax-exempt 501(c)3 bonds each year. The City lends its authority to a qualified non-profit, tax-exempt entity, and can take an administrative fee in return for lending this authority. Maplewood Senior Housing has agreed to a fee of $25,000, or slightly less than .5% of the total issue of $5,500,000. There is no financial risk to the City, and this conduit bonding does not affect the City's bond rating. The City of Hutchinson, Minnesota, is asking Falcon Heights to utilize its conduit bonding authority in order to help with the issuance of housing bonds for Maplewood Senior Housing, Inc., a Minnesota non-profit corporation and tax-exempt 501(c)3 organization. These bonds will be utilized to construct a 50-unit independent senior housing facility in Hutchinson. The City of Hutchinson has agreed to lend host approval to this transaction, due to their inability to act as a conduit for these bonds because they are near their bank-qualified limit for 2005. • 3