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Mounds View City Council December 13, 2010 Regular Meeting Page 5 H. Resolution 7717, Relating to Issuance of the City’s MultifamilyHousing1 Revenue Bonds (Select Senior Living of Mounds View Project), Series20102 as Temporary Bonds and Authorizing the Issuance of MultifamilyHousing3 Revenue Refunding Bonds (Select Senior Living of Mounds View Project), 4 Series 2011 and the Execution of Various Related Documents. 5 6 Finance Director Beer explained the Council began the bonding process with SelectSenior7 Living in July by passing Resolution 7672 which authorized the issuance of housingrevenue8 bonds. At this time, Select Senior Living was requesting temporary bonds which wouldallow9 the market place to clear the over abundance of revenue bonds. Staff recommended approvalof10 the resolution as submitted. 11 12 Scott McLendan, Oppenheimer, explained Select Senior Living was facing several concernswith13 the timing of this bond issuance. The market was flooded with housing revenue bonds atthis14 time due to the Build America Program. These excess bonds have created a glut in themarket15 which needed to clear before a favorable bond rate could be guaranteed. The temporaryissuance16 of the $14 million in bonds was a positive option for the developer to continue with the project. 17 He indicated the bonds would then be refunded at a more favorable rate in the near future. Mr. 18 McLendan further reviewed bond market specifications with the Council. 19 20 Council Member Mueller questioned if the stock market had any bearing on the bond rating. Mr. 21 McLendan stated the stock market had no effect on the bond rating but when there wasmore22 confidence on the stock market, funds moved from bonds to stocks. 23 24 Council Member Mueller asked what impact an extension of the Build America bondswould25 have on the proposed housing revenue bonds. Mr. McLendan indicated he did not anticipatean26 extension of the program. However, there was always a chance and if extended moreissuers27 would be moving to the bond market during third and fourth quarter of 2011. 28 29 Council Member Mueller questioned if the City was at any additional risk by issuingtemporary30 bonds that would then need to be refunded in the future. Mr. McLendan stated there wasno31 more risk than the original request to issue bonds as Mounds View was acting as the conduitand32 was not fiduciarily responsible for these bonds. Jenny Bolton, Kennedy & Graven, agreedthere33 was no difference in this bond issuance as the borrower was responsible for the paymentson34 these bonds. 35 36 Council Member Hull asked why the request was before the Council and if the project wasstill37 on schedule. Joe Larson, Select Senior Living developer, explained the bond allocation wasdue38 tomorrow at noon and if not completed the project would be done. 39 40 Mayor Flaherty questioned if Oppenheimer was underwriting the temporary bonds. Mr. 41 McLendan stated a private purchaser was funding the entire $14 million in temporary bonds. 42 43 Mayor Flaherty commended Mr. Larson for working so diligently on this project. He feltthe44 project would greatly benefit the City of Mounds View. 45