2017.05.01 CC Packet - Laserfiche WebLink

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G.7 14669 Fitzgerald Avenue North, Hugo, MN55038 • (651) 762-6300 • www.ci.hugo.mn.us TO: Honorable Mayor Tom Weidt and Members of the City Council FROM: Ron Otkin, Finance Director SUBJECT: Revenue Bonds (Conduit Bonds) Public Hearing DATE: For the City Council Meeting of May 1, 2017 REQUEST FOR CONDUIT BOND FINANCING The City of Hugo is being asked to consider issuing Tax -Exempt Revenue Bonds, in an amount of no more than $5.1 million, on behalf of the Autism Opportunities Foundation (the "Borrower"), a Minnesota nonprofit corporation doing business as the Minnesota Autism Center. The bond proceeds will be used to finance the acquisition, construction, and equipping of an intensive therapy center for children and adults ages 10 to 21 diagnosed with autism spectrum disorder ("ASD"). The Borrower also wants to amend certain terms of the bonds that were issued by the City of Hugo in 2015 which were used to finance the acquisition, construction, and equipping of an approximately 48,000 square foot two-story school building that serves primarily high school students with ASD. The project will be located at 2010 Silver Bell Road in Eagan, Minnesota. The Borrower has agreed to pay the City of Hugo an issuer's administrative fee of/4 of 1 % of the principal amount of the bonds in consideration for the City of Hugo acting as issuer. PUBLIC HEARING A public hearing on the proposal has been scheduled for June 5, 2017, after which the Council will be asked to adopt a resolution approving the issuance of bonds. Notice of the public hearing will be published in the Citizen. All persons who appear at the public hearing will be given an opportunity to express their views with respect to the proposal. RISKS TO THE CITY OF HUGO The City of Hugo is only serving as the bond issuer. The Minnesota Autism Opportunities Foundation is the actual borrower and is solely responsible for repaying investors. The bonds are not moral obligations on the part of the City, and the bonds will not constitute a debt of the City within the meaning of any constitutional or statutory limitation. The issuance of the bonds will not affect the City's credit rating on bonds it issues for municipal purposes. The City will not be required to provide any continuing disclosure or arbitrage calculations regarding the bonds or the project being financed. RECOMMENDATION Briggs and Morgan, the City's bond counsel, has reviewed this request and finds it to be a proper use of the City's bonding authority. Thus, the Finance Department recommends that the City Council approve the attached RESOLUTION CALLING FOR A PUBLIC HEARING ON THE ISSUANCE OF REVENUE BONDS AND AUTHORIZING THE PUBLICATION OF A NOTICE OF THE HEARING.