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172607104v1 <br /> <br /> <br />Bryan Bear <br />April 30, 2025 <br />Page 3 <br /> <br /> <br /> <br />The City will receive an administrative fee to act as issuer. Historically, the City has <br />charged ¼ of 1% of the principal amount of the Note actually issued for the issuer’s administrative <br />fee. <br />Also, the Borrower will be responsible for paying all costs related to the issuance of the <br />Note, including our fee as bond counsel. The City will not be responsible for any costs of the <br />transaction. <br />As noted, the City has acted as the issuer for similar 501(c)(3) projects in the past, including <br />for Noble Academy and the Minnesota Autism Center. <br />Under federal and State law, in order for the Note to be a tax exempt obligation, they must <br />be issued by a political subdivision. This requires that the City hold a public hearing and approve <br />issuance of the Note and the execution of related documents. At the appropriate time, it will be <br />necessary for the Council to hold a public hearing and give final approval to the actual issuance of <br />the Note and approve all related documents. The City of Andover, as the host jurisdiction, will <br />also hold a public hearing and grant consent to the City to act as the issuer of the Note. <br />It is currently anticipated that the Note will be issued by July 1. We will work with all <br />parties to the transaction to develop a schedule to meet that anticipated closing. The Placement <br />Agent has requested proposals from potential bank purchasers and the Borrower would like to <br />identify an issuer soon as well. While we’re not yet at the point of setting a specific schedule, it <br />would help move the process along, if the Council is willing, for the Council to adopt a resolution <br />at its May 5th meeting that authorizes the City Administrator to set the public hearing date, when <br />we have a better idea of a good date for that hearing. A proposed form of that resolution is included <br />with this letter. <br />Please feel free to contact me if you have any further questions or comments. I know that <br />the Borrower appreciates the consideration of the City of Hugo in this matter. <br /> Very truly yours, <br />Catherine J. Courtney <br /> <br /> <br />CJC <br />Enclosure <br />