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21 <br />Conduit Debt Financing <br /> <br />Background <br /> <br />Under the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Sections 469.152 to <br />469.1651 (the “Industrial Development Act”), the City of Little Canada has authority to issue revenue <br />bonds or notes to attract or promote economically sound industry and commerce to the City. <br /> <br />Under Minnesota Statutes, Chapter 462C (the “Housing Act”) the City is authorized to issue housing <br />revenue bonds to finance multi-family residential housing projects for low- and moderate-income <br />persons and elderly persons. Projects must be embodied in a Housing Program as that term is defined <br />in the Housing Act. <br /> <br />This debt does not represent a liability to the City, but rather a conduit for aiding various <br />organizations in their development process. <br /> <br />Statement <br /> <br />1. The City will consider issuing qualified conduit debt financing as long as it does not interfere with <br />bank qualification needs of the City when issuing its own bonds. <br /> <br />2. Pursuant to the Industrial Development Act and the Housing Act, consideration of an application <br />for tax-exempt financing must be done at a public hearing held by the Council. Changes or <br />modifications to the project after the public hearing and preliminary Council approval must be <br />consistent with the scope of the project as proposed at the time of preliminary approval. <br /> <br />3. The City is to be reimbursed, and held harmless, for and from any out-of-pocket costs related to <br />the actual or proposed issuance of conduit revenue bonds. In addition, a nonrefundable processing <br />fee of $2,500 must be submitted with a written request. <br /> <br />4. Upon issuance of the bonds, the entity will be charged a financing fee of ½ of 1% for the issuance <br />of the tax-exempt initial financing and ¼ of 1% for tax-exempt refunding with a one-time fee <br />collected at closing. The City may also negotiate an alternative debt issuance fee on a case-by-case <br />basis. <br /> <br />5. The City Council reserves the right to deny any application for financing at any stage of the <br />proceedings prior to adopting the final resolution authorizing issuance of the conduit debt <br />financing. The City Council may waive any provision of this Conduit Debt Financing Policy if the <br />City Council determines that such waiver is in the best interest of the City. <br /> <br />6. The Finance Department shall, report all conduit debt issues in the Comprehensive Annual <br />Financial Report in accordance with Generally Accepted Accounting Principles. <br /> <br />