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<br />• Qualified 501I(3) bonds, where the user of bond proceeds is a nonprofit 501(c)(3) entity. Typical <br />examples include nonprofits that own nursing homes, hospitals, senior and other affordable housing, <br />and schools (from K-12 to college). But any nonprofit with 501(c)(3) status is eligible for this type of <br />financing, so bonds have been issued for entities as diverse as the YMCA to Minnesota Public Radio. <br />• Housing revenue bonds (exempt facilities), where the user of bond proceeds is a private for-profit <br />entity that builds housing intended for occupancy by persons or families who meet specified low- <br />income guidelines. <br />• Small issue manufacturing bonds, where the user of the proceeds is a manufacturing business that <br />constructs manufacturing facilities that meet certain federal requirements. <br />There are other less common conduit bonds that cities may occasionally encounter, but the three listed <br />above represent the bulk of this bond type. <br />More Information can be had at the League of Minnesota Cities. HERE <br /> <br />ISSUE BEFORE COUNCIL: Should the city council direct staff to draft a conduit bonding <br />policy? <br /> <br />PROPOSAL DETAILS/ANALYSIS: <br />The city council can direct staff to come back with a policy with different allowable uses. This <br />would benefit the community by informing the what kind if any conduit bonding the city would <br />support. <br /> <br />FISCAL IMPACT: Conduit bonding is a money making venue for cities. Application fees are set <br />by the city to cover review and staff time. In addition, a fee of cities around, .25% to 1.00% of the <br />bond would be collected. A 10 million bond would yield the city $50,000 at .5% in administrative <br />fees, plus the $3,000 application fee. <br /> <br />RECOMMENDATION: <br /> <br />“Move to direct staff to develop a draft policy for conduit bonding for <br />the uses of:_________________” <br /> <br /> <br /> <br />ATTACHMENTS: <br />City of Oakdale policy, <br />City of Shakopee policy <br />City of Bloomington policy <br />