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