10-29-2018 Council Packet - Laserfiche WebLink

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STAFF REPORT TO: Mayor Keis and Members of City Council FROM: Chris Heineman, City Administrator DATE: October 29, 2018 RE: Call for Public Hearing on the Issuance of Conduit Debt for Presbyterian Homes ACTION REQUESTED: Approval of a Resolution calling for a Public Hearing on the issuance of Health Care Facilities Revenue Notes and ratifying and affirming the actions taken for the publication of a notice of hearing (Presbyterian Homes Care Centers, Inc. – Langton Place Project). SUMMARY REPORT: The City was approached by a representative of Presbyterian Homes asking if the City of Little Canada would provide conduit financing to finance the costs of the acquisition, construction, and equipping of an approximately 50,624 square foot, fifty-bed skilled nursing facility and the demolition of the existing skilled nursing facility known as Langton Place, located at 1910 County Road D in the City of Roseville, Minnesota. The Project will be owned and operated by the Borrower. The maximum estimated principal amount of the notes to be issued to finance the Project is $13,000,000. As the Council is aware, a municipality has a $10 million annual bank qualified limit for that can be utilized for this purpose. This same limit would apply to tax exempt financing the City may undertake. The City of Little Canada has not utilized any of its annual bank qualified limit for 2018. The City of Little Canada has adopted a policy to charge a 1% issuance fee for conduit debt. This is no longer feasible in today’s market, and the top end of the range for this type of project is more typically around .5%. Given that Little Canada does not usually issue debt and that we will have $10 million of Bank Qualified Debt still available, staff feels this is a good opportunity to generate some additional revenue with very minimal risk and recommends approval of the Resolution.