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City of Lino Lakes <br />YMCA Financing Options <br />June 22, 2005, page 5 <br />would be bank qualified (offering certain tax advantages to the banks that would purchase the <br />bonds). Should the Tax Exempt Private Debt option not be possible with the City's right of first <br />refusal, we would recommend that the City then consider Lease Revenue Bonds. <br />Recommendation <br />We recommend that the City issue $1.5 million of abatement bonds to finance the City's <br />commitment and $2.5 million of Tax Exempt Private Debt (conduit debt) in order to provide tax <br />exempt financing to the YMCA, without issuing direct debt while protecting the $1.5 million of <br />abatement bonds through a right of first refusal provision. <br />Attached please find schedules showing the debt service for a $1,500,000 GO Abatement Bond <br />over a 15 year and 20 year collection period. While the 15 year timeframe allows a quicker <br />payoff, it also increases the annual debt service by about $25,000 each of the fifteen years with <br />savings resulting in years 16 though 20. The abatement properties identified are sufficient to <br />offset the additional levy at 15 years and so we are recommending the 15 year bonds. <br />We have not estimated any impact for the YMCA's bond options because it is assumed that <br />there will not be any levy for those bonds. <br />We are available to further discuss these options further at your convenience. <br />Sincerely, <br />Terri Heaton <br />Senior Vice President <br />Attachments <br />Cc: Mr. Alan Rolek, Finance Director <br />Mr. Michael Grochala, Community Development Director <br />Ms. Mary Divine, Economic Development Specialist <br />Mr. Steve Bubul, Kennedy & Graven <br />