2017.06.05 CC Packet - Laserfiche WebLink

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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 June 5, 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 "Borrower"). 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 project will be located at 2010 Silver Bell Road in Eagan, Minnesota. 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. These amendments will be brought to the City Council for approval at the June 19, 2017 Council meeting. 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 has been 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. The City's Bond Counsel, Mary Ippel of Briggs and Morgan, and Denise Raunig, the Chief Financial Officer of the Minnesota Autism Center, will be in attendance to answer questions concerning specifics of the project and the financing thereof. RISKS TO THE CITY OF HUGO The City of Hugo is only serving as the bond issuer. The 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.