08-11-2014 CC - Laserfiche WebLink

Home Browse Search

Item No: 7.C. Meeting Date: August 11, 2014 Type of Business: Council Business Administrator Review: ____ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: Resolution 8288 Calling a Public Hearing on the Issuance of a Revenue Note and Providing Preliminary Approval to the Proposed Issuance of the Revenue Introduction: The City Council is asked to consider a proposal to use conduit debt financing to finance the acquisition, construction, and equipping of a transitional care unit consisting of the addition of 24 skilled nursing beds to the existing 150-bed skilled nursing facility located at 900 2nd Street NE in the City of Minneapolis. The City is part of the service area for this facility thus we are able to use our lending authority. The preliminary revenue note amount is $4,000,000 and the City will receive a 1% issuance fee ($40,000) for the use of the City’s lending authority. Catholic Eldercare the borrower has proposed to apply the proceeds of the City Note, along with the proceeds of a revenue note proposed to be issued by the City of Lauderdale, Minnesota in an aggregate principal amount not to exceed $10,000,000 and a revenue note proposed to be issued by the City of Minneapolis in an aggregate principal amount not to exceed $5,000,000 for this project. The note will not constitute a general or moral obligation of the City and will not be secured by or payable from any property or assets of the City and will not be secured by any taxing power of the City. The City Council has indicated its’ support for moving forward with use of conduit debt financing for this project. Discussion: There are a number of steps that will need to happen before the Subordinate Health Care Facility Revenue Note can be issued. The first steps are for the City Council is to grant preliminary approval, set a public hearing, and receive approval from the Minnesota Department of Employment and Economic Development (DEED). Final approval would occur at the September 8th Council Meeting at a Public Hearing. The City Council is not obligated to issue the note by this resolution this is just one of the steps necessary to move toward that objective. If at any time during the review process, the City Council determines that this is not in the City’s best interest we can withdraw support for the note issuance. The City is represented by Jenny Boulton as bond council from Kennedy & Graven. Recommendation: Staff recommends that Council review the information, ask questions and if comfortable approve Resolution 8288. Respectfully submitted, ________________________ Mark Beer Finance Director