7F, Request from Presbyterian Homes for Conduit Fina

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� ��N HYLLS MEMORANDUM DATE; July 24, 2008 TO: Honorable Mayor and City Council Ron Moorse, City Adrr�inistraior FROM: Sue Iverson, Finance Directar�'"`� SUBJECT: Request from Presbyterian Homes for Conduit Financing Background: MHC has been engaged by PHM&S Offce Building LLC (single m�mber LLC of Fresbyterian Hoznes Management az�d Service, Inc.) to arrange a tax-exempE financing of its scheduIed office expansion main office building and a refinancing af its outstanding mortgage. At the �uly 14, 2008 work session, Steve Fenlon, MHC, presented the proposal to the Ci#y Council, The Council directed staff to negotiate the terms for the fee paid to the City of Arden Hills for the use of its bank qualification. Discussioa: Staff inet with Steve Fenlon of MHC to negotiate this fee. At this tirne, Presbyterian Ho�nes agrees to pay the City of Arden Hills an issuer's fee equal '/� of 1.00% of the par amount of t1�e Series 2008 note provid�d, the City Council of Arden Hills agrees to act as Issuer in additional tax-exernpt bond offering{s} for a project(s) r�hich are at leasi in part, located in Arden Hills during the r�ext 3 years for an Issuer's fee computed at a rate of %2 of 1.00% of the par amaunt af the bonds, but not greater than $75,000 on any one tax-exempt bond issue. Staff Recommendation; Staff recommends Council to accept %z of 1.00% of the par amount of the Series 2008 note, but does not recommend the provision to a�ee to act as an Issuer in additional tax-exennpt bond of%ring(s) for a fee of %z of 1.00% with a$75,000 limit on any one tax-exempt bond issue for the next ihree years. Staff feels that a policy needs to be developed and research done on what other communities are charging. In light of the TCAAP development ar other needs, the City may not be able to act as an issuer for conduit financit�g if the need would arise to issue bonds ourselves. I� additional conduit itnancing is needed by Presbyterian Homes, staff feels that these terrns could be d�alt with as the need arises withaut tying the hands of future Councils.