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Bonds are first subject to optional redemption on February 1, 2016. Since the Bonds are <br />taxable obligations under the federal tax code, the City has more flexibility in the area of <br />advance refunding possibilities than it would if the Bonds were tax exempt. Another <br />alternative to an interfund loan or tax levy would be that some or all of the Bonds could <br />be advance refunded and restructured to accommodate the current and prospective <br />revenue cash flow, subject to the provisions of Minnesota statutes with regard to advance <br />refundings. This could include capitalizing interest for an additional period of time to <br />avoid any net pay out of funds for debt service in the near term. This may be a rather <br />expensive proposition over the long term as compared to the original structure of the <br />Bonds. Interest rates may be higher today that they were in 2005, and there would surely <br />be some negative arbitrage working against the City relative to the refunding escrow <br />account. But it may be worth it to the City to pay more later for welcome relief in the <br />short term. Further discussion of these options or combinations of the options can be <br />pursued this evening. <br />Minnwest continues to hold the temporary financing on Lakewoods Apartments. <br />Minnesota Housing Finance Agency (MHFA) will close with Minnwest before the end of <br />this year with the permanent financing for the work force housing. The LaSalle Group <br />will continue as property managers. <br />The first floor commercial space in Lakewood Apartments is essentially a separate parcel <br />from the housing. Minnwest will continue to own the commercial parcel. <br />Requested Council Direction <br />None. <br />Attachment(s) <br />None <br />2 <br />