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• FALCON HEIGHTS CITY COUNCIL MINUTES <br />June 8, 2005 <br />-5- <br />Public hearing on a housing program and the issuance of multifamily housing revenue bonds <br />to finance a housing_pro~ram under Minnesota Statutes Chapter 462C (continued) <br />Administrator Worthington said that is what was offered and since this was the City's first time <br />doing this, she thought it was better to have a bird in the hand than two in the bush. It was better <br />to have $25,000 than nothing at all. The City agreed to a half percent fee, which significantly <br />undercuts other cities and ultimately gives Falcon Heights business. There is a niche market for <br />a city like Falcon Heights to come into this particular area of alternate revenue sources, and if <br />Falcon Heights asks for a lower fee than other conduit bonding agencies in the area the City can <br />pick up business that they might not be otherwise interested in. <br />Attorney Hallas said she mentioned there are cities that charge large fees. There are also many <br />other cities that charge no fees. This same entity, Ecumen, is going to construct a facility in <br />North Branch and that City has no fee. <br />Mr. Lageson asked if there is any kind of a yearly fee associated with this. Where will this show <br />up on the financial statements? Mayor Gehrz said it will show up as a note on the financial <br />statements. It doesn't affect the City's bond rating. It doesn't show up as a liability. There is no <br />annual fee. Administrator Worthington said an annual fee would represent additional <br />administrative work on the part of City staff, so Falcon Heights decided to take a lump fee <br />upfront rather than take some kind of ongoing administrative fee. There are entities out there <br />that have a lot more staff and they can go ahead and process fees on a yearly basis over the <br />length of a loan or a bond. Since Falcon Heights has such a small staff it made sense to take <br />everything upfront rather than on an ongoing basis. <br />Mr. Lageson said the $10 million is a yearly amount, so January 1 another one could come <br />in that might happen to be a Falcon Heights development. This isn't hitting us for the next thirty <br />years? Mayor Gehrz said the City has this opportunity every year beginning January 1. The City <br />will be looking for these opportunities actively. <br /> <br />Attorney Hallas said that around October, November and sometimes December there may be <br />people looking for issuers for bank qualified bonds. If the City doesn't issue anything else this <br />year and still has $4.5 million left, people may come knocking on your door again. <br />Council member Lamb said the City would like to get out of the passive waiting for people to <br />knock on the door and get more into the active promotion of this because it is a revenue stream <br />that carries no liabilities. For Falcon Heights, $50,000 to $100,000 is potentially a heck of a lot <br />of money. He asked Attorney Hallas how the City might more actively pursue these <br />opportunities. Attorney Hallas said that obviously the first would be if someone is coming into <br />your city. The other is to work through your bond counsel and City financial advisors. Put the <br />word out that you would be interested in doing this again. <br />V <br />k <br />