09-03-2019 Council Packet - Laserfiche WebLink

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WS – Item 4 WORK SESSION STAFF REPORT Work Session Item No. 4 Date: September 3, 2019 To: City Council From: Sarah Cotton, Finance Director Re: Tax Exempt Financing Guidelines Background In August of 2005, the City Council adopted Private Activity Tax-Exempt Financing Guidelines. The YMCA had approached the City of Lino Lakes with a request to utilize private activity revenue bonds to finance a portion of their Lino Lakes facility. At the time, it came to light that the City did not have any guidelines in place for this type of financing. Staff worked with Springsted, Inc. and Kennedy and Graven, to write a set of guidelines to establish criteria under which the City would allow this type of financing and set forth fees for such activity. In 2018, the City granted host approval on the issuance of a note by the City of Columbia Heights to finance the construction of the Love to Grow on facility in Lino Lakes and the issuance of a note by the City of Falcon Heights to finance, in part, a senior living campus in Lino Lakes. The City of Lino Lakes was not the issuer of these two notes; however, was required to grant host approval to the issuance of the notes as the properties were physically located within the boundaries of Lino Lakes. During the discussion regarding granting host approval on these two projects, the City Council expressed a desire to update the city’s policy, so that the city was a in a position to consider tax exempt financing as a tool to facilitate economic development within the community. Julie Eddington, Kennedy and Graven, has reviewed the city’s policy and has prepared suggested revisions as outlined in the attached document. At this time, staff is not recommending a change to the administrative fee of 1% of the principal amount of the bond issue. This fee is consistent with the administrative fees included in the policies of surrounding communities. In addition, Part II, Item 9 of the guidelines provides the City Council with sole discretion to reduce the administrative fee in cases where “the borrower’s request is related to a partnership with the City and/or provides a public service benefit to the community as a whole.” Attachments Draft Revised Tax-Exempt Financing Guidelines Requested Council Direction Staff is requesting City Council consideration of the proposed changes.