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FALCON HEIGHTS CITY COUNCIL MINUTES • June 8, 2005 -4- Public hearin on a housin ro ram and the issuance of multifamil housin revenue bonds to finance a housing program under Minnesota Statutes Chapter 462C (continued) Council member Talbot asked if the amount that Falcon Heights co-writes is subtracted from Falcon Height's limit. Attorney Hallas said yes. If the City were going to do anything else this year and another non-profit 501(c) 3 group asked you to do the same thing, you would have to watch it so the City stays within the $10 million limit. Mayor Gehrz said the City could go as high as $4.5 more this year. Council member Talbot asked what happens if the City does and all the sewers collapse at once. The City won't be able to issue its own bonds in the amount of $10 million. Attorney Hallas said the City would be able to issue them but would not be able to be bank qualified, which would give the City a lower interest rate. The City would not be stopped from issuing bonds, it would be the rate difference. Council member Lamb asked about the timeline. Attorney Halla said that Hutchinson has already approved this and wants to close as soon as possible. They had to hold a public hearing also because the building is located there. The building is slated to be completed around the fifteenth. The Public Hearing was opened to the audience for commentary. Mr. Thomas Lageson, 1740 Pascal, said he attended the workshop in February when the Council talked about this. The lawyer who was in attendance at that time talked about a typical 1 % fee. Little Canada received a 1% fee for a project they did for Saint Paul. A search of the web showed that Wyoming received half a percent upfront, half a percent at the conclusion, and a tenth of a percent yearly fee. Another one that he saw also had a fee built in so that if a non- profit organization came in and would exceed the $10 million threshold, the host City would pay the fee. Why is the City only getting $25,000? You're talking about less than half a percent. Who represented the City in getting the fee? It seems awfully low. He doesn't want to sound greedy, but this isn't something the City does every day and it seems like some money is being left on the table. He thinks that for what the City is doing here, the City should be eligible to receive the full 1 %. If you think about it, the name on the bonds is the City of Falcon Heights and if those bonds should default, which probably is not very likely in this case, Grandma and Grandpa are going to say, even though Ecumen failed on the bonds, that the City of Falcon Heights failed. There is some risk there. Why are we accepting such a low fee? Who negotiated the fee for the City? Mayor Gehrz said this is the City's first time doing this and she expects the City will be doing more of this in the future. The City Administrator represented the City in these negotiations, as • she does as a part of her job. She asked about the basis for the half percent fee. 4