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Memo To: Mark Casey— Executive Director From: Stacie Kvilvang Date: June 26, 2012 Subject: Remarketing of 2004 Conduit Bonds — The Landings On September 14, 2004 the City approved the issuance of its Variable Rate Demand Multifamily Housing Revenue Bonds (Conduit Bonds) in the amount of $37,500,000 for the purpose of making a loan to Dominium. to construct The Landings at Silver Lake Village rental complex. Dominium is refinancing the project and will be paying off $31,100,000 of the Conduit Bonds with a HUD mortgage, leaving approximately $6,400,000 outstanding in Conduit Bonds. The remaining balance of the Conduit Bonds will be "remarketed" and paid by Dominium from surplus cash flow from The Landings and will be secured by a Letter of Credit and personal guarantee of Dominium Principals. Surplus cash flow is defined as cash flow, after expenses, not needed to pay debt service on the HUD mortgage. I have reviewed the development proforma for the project going forward and have determined that there should be more than adequate surplus cash flow to make payments on the remarketed Conduit Bonds. In order to allow the Conduit Bonds to be remarketed, the City is required to enter into and approve the following documents: 1. indenture of Trust with US Bank (existing Trustee on the Conduit Bonds). This document sets up the process and expectations for the letter of credit and payment on the Conduit Bonds. 2. Loan Agreement between the City and Dominium, This document relates to Dominium agreeing to assume the City's obligations on the Conduit Bonds in exchange for the City loaning the Conduit Bond proceeds to Dominium. 3. Remarketing Circular to be used in connection with the remarketing of the Bonds by Dougherty & Company LLC (the "Remarketing Agent"). Dorsey and Whitney, the City's Bond Counsel, has prepared these documents and they are attached in the City Council packet for your review and consideration. Please contact me at 651-697-8506 with any questions. EHLERS LEADERS IN PUBLIC FINANCE www.ehiers-inc.com Minnesota phone 651-697-8500 3060 Centre Pointe Drive Offices also in Wisconsin and Illinois fax 651-697-8555 Roseville, MN 55113-1122 toll free 800-552-1171