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01-21-86 CCM
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01-21-86 CCM
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LAKE ELMO CITY COUNCIL MINUTES JANUARY 21, 1986 PAGE 4 <br />into a joint powers agreement with the City to enable the HRA to <br />provide tax-exempt financing for the bank. Recently the State <br />Bank of Lake Elmo approached the HRA in regard to issuing <br />tax-exempt revenue bonds in the amount of 1.2 million dollars for <br />the purpose of constructing a new facility with approximately <br />15,000-20,000 sq.ft. within the City. <br />In the past year the HRA has been very active in the tax-exempt <br />bond market on behalf of cities within Washington County. <br />However, the HRA cannot issue tax-exempt bonds within a <br />municipality without receiving approval from the City to issue on <br />their behalf. <br />When issuing tax-exempt bonds through a joint powers agreement, <br />the HRA assumes all the liabilities and responsibilities <br />associated with the project. The HRA agrees not have to issue the <br />bonds until the City is satisfied that the developer has met all <br />the criteria necessary to carry out their project. It is <br />important to note that tax-exempt revenue bonds are bonds that are <br />privately financed and there is no obligation or debt incurred by <br />the City. <br />Mayor Morgan - The City is under no financial obligation <br />whatsoever. The spirit of the program 9.s to help finance the type <br />of development you would like in your Ciy. We have alrady done <br />the same type of action for Joe Rogers and Hardwood Lumber, <br />Brookfield, and Connco Shoes. <br />Counci.lmember Dunn - Assuming the worst, who ends up picking up <br />the tab. Balyeat stated if the bonds are issued and it is a bad <br />project, the liability would be ,With whoever buys the bonds. <br />Depending on the type of issue it would either be a private bank <br />or could go out to a public offering. Anything this small would <br />be placed with a lending institution. <br />City Attorney Knaak - I have reviewed the joint powers agreement <br />that was forwarded to me. To my knowledge it is a standard <br />agreement and does what Mr. Balyeat has stated and it expressly <br />states that the City is not liable. <br />Dunn - What are we going to incur in the line of administrative <br />and legal costs in this joint powers agreement? Balyeat stated <br />that it has been their policy in the past that all the cost be <br />borne by the HRA. Overby asked what about the cost if the City <br />decides to authorize issuance of the bonds later. Does it get <br />covered by HRA and by the developer. Balyeat answered that the <br />developer will pay for all costs associated with the application. <br />M/S/P Morgan/Armstrong - to approve Resolution 86-16 entering into <br />a joint powers agreement with. the Washington County Housing and <br />Redevelopment Authority. (Motion carried 4-0-1<Mazzara>) <br />M/S/P Christ/Morgan - to approve Resoluion 86-17 authorizing the <br />application for the tax exempt bonds. (Motion carried <br />
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