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CHARTERED Offices in Minneapolis Saint Paul St. Cloud 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis MN 55402-1458 (612)337-9300 telephone (612) 337-9310 fax www.kennedy-graven.com Affirmative Action, Equal Opportunity Employer GINA A. FIORINI Attomey at Law Direct Dial (612) 337-9210 Email: gfiorini@kennedy-graven.com April 18, 2018 Sarah Cotton, Finance Director City of Lino Lakes 600 Town Center Parkway Lino Lakes, MN 55014 Re: Resolution calling public hearing on granting host approval for a project to be financed with the proceeds a revenue obligation to be issued by the City of Columbia Heights Dear Sarah, Love To Grow On, a Minnesota nonprofit corporation (the "Borrower"), operates early childhood education centers in the City of Lexington and the City of Circle Pines and has proposed to consolidate both centers into a new facility consisting of approximately 13,000 square feet (the "Project") located at 6499 Lakota Trail in the City of Lino Lakes (the "City"). The Borrower would like to finance the new facility with tax-exempt conduit bonds in the amount of approximately $3,800,000. The City has indicated that it plans to issue general obligation bonds this year and would like them to be bank -qualified bonds (this designation allows banks to buy the bonds and claim the interest on the bonds as tax exempt). In order for the City's bonds to be bank -qualified, the City cannot issue more than $10,000,000 in general obligation bonds or conduit bonds for a nonprofit borrower. If the City agreed to issue the conduit bonds for the Borrower, the City would not be able to issue its own bonds as bank qualified. The Borrower has requested, instead, that the City of Columbia Heights issue a revenue note, in one or more series, as a taxable or tax- exempt obligation (the "Note"), in the maximum principal amount of $3,8000,000 in order to (i) finance the acquisition, construction, and equipping of the Project; (ii) finance capitalized interest during construction of the Project, if necessary; (iii) fund required reserves, if any; and (iv) pay costs of issuance of the Note. In order for the City of Columbia Heights to issue the Note, the City must grant "host approval" to the issuance of the Note, following a duly noticed public hearing, under Minnesota Statutes, Section 471.656, and the Internal Revenue Code of 1986, as amended (the "Code"). Enclosed is a resolution for consideration by the City Council on Monday, April 23, 2018, which calls for a public hearing to be conducted by the City Council on Tuesday, May 29, 2018 for purposes of granting host approval to the issuance of the Note by the City of Columbia Heights to finance the Project. If the City Council authorizes the City of Columbia Heights to issue the Note, the Note will be issued as conduit revenue obligation of the City of Columbia Heights secured solely by the revenues derived from the loan or other revenue agreements executed by the Borrower and from other security provided by the Borrower. The Note will not constitute a general or moral obligation of the City or the City of Columbia Heights, will not be secured by or payable from any property or assets of the City or the City of Columbia Heights, and will not be secured by any taxing power of the City or the City of Columbia Heights. The Note will not be subject to any debt limitation imposed on the City or the City of Columbia Heights and the 521370v1 GAF CL 162-55