08-08-2011 CC - Laserfiche WebLink

Home Browse Search

Item No: 6.B. Meeting Date: August 8, 2011 Type of Business: Special Order of Business Administrator Review: ____ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: Conduit Debt Discussion Introduction: The City Council previously authorized in resolution 7672 issuance of conduit debt in the form of Temporary Multifamily Housing Revenue Bonds, Series 2010, for a 95 unit senior housing facility located at County Highway 10 and Groveland Road. Due to market conditions, this project has struggled to refund the temporary bonds that were sold and which are needed to get this project started. Presbyterian Homes of Arden Hills, Inc. has inquired thru the City Attorney to see if the City is interested in participating in a conduit debt offering for a project in Arden Hills. Discussion: The City has been contacted thru the City Attorney to participate with Arden Hills in a conduit debt financing of a senior housing project in Arden Hills. Attached is the letter of inquiry and description of the project. Ben Johnson of Kennedy and Graven is here to answer any Council questions regarding this financing proposal. Presbyterian Homes has contacted other cities as part of this proposal. They are trying to get the best deal possible and thus may be trying to play the cities against each other to lower the issuance fee required by a city for the use of its “bank qualified bond” borrowing capacity. It has been City policy to require a 1% issuance fee upfront for the use of our borrowing capacity and Presbyterian Homes would be looking for a reduction in that percentage. Recommendation: Staff recommends that the Council ask any questions that they may have to support their consideration of this request. Staff also recommends that the 1% fee be maintained. Respectfully submitted, ________________________ Mark Beer Finance Director