04-08-2020 Council Packet - Laserfiche WebLink

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STAFF REPORT TO: Mayor Keis and Members of City Council FROM: Brenda Malinowski, Finance Director Chris Heineman, City Administrator DATE: April 8, 2020 RE: Call Public Hearing on the Issuance of Conduit Debt for Presbyterian Homes ACTION REQUESTED: Approve the resolution to call for the Public Hearing for the issuance and sale of Senior Housing and Health Care Facilities Revenue Bonds (Langton Shores Project), Series 2020. BACKGROUND: The City was approached by a representative of Presbyterian Homes to inquire if the City of Little of Canada would provide conduit financing to construct Langton Place, Phase 2 located in Roseville. This phase of the Langton Place project will include the construction of a town center and adjacent 80-unit senior housing facility. Our bond attorney, from Taft Stettinius & Hollister LLP (formerly Briggs & Morgan) has included a memo outlining the project. The City acted a conduit issuer for Presbyterian Homes most recently in 2014 and 2018. The 2018 bonds will be refinanced with this 2020 issue. Therefore, there has been a request by Presbyterian Homes to reduce the issuer fee that the City will receive by the 2018 issuer fee ($29,000). In the recent past, the City has collected .25% issuer fee, based on the par amount of the bonds. If the bonds are issued for $47,000,000, the City would collect $88,500 (117,500-29,000). In the past, these issuer fees have been placed in the EDA Fund. Minnesota cities have a $10 million annual bank qualified limit that can be utilized for issuing bonds. The same limit would apply to any tax-exempt financing that the City may undertake, including this issue. The City has not utilized any of its annual bank qualified limit in 2020. Given that Little Canada does not usually issue debt and that we have $10 million of Bank Qualified Debt still available, staff feels that is a good opportunity to generate some additional revenue with minimal risk and recommends approval of this resolution. Staff has contacted the City of Roseville to verify that their City is not interested in acting as the conduit of this debt. They are not interested in acting at the conduit of this debt. Given the country’s current public health crisis, the attached resolution has been drafted with flexibility for setting the public hearing date and to allow for it to be other means, such as by mail or email.