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ARDEN HILLS CITY COUNCIL — June 27, 2011 18 7.D. Presbyterian Homes Conduit Debt Waiver Letter (continued) Presbyterian Homes is asking the City Council to waive the reading of Section 7.1(d) — the City of Arden Hills issue 100% of the bonds — with the condition that Presbyterian Homes will pay the full fee as if the City of Arden Hills issued all the bonds. This waiver will allow Presbyterian Homes to issue bank - qualified debt for the entire bond issue by using multiple jurisdictions. By approving this waiver, the City will still receive the entire amount of the fee for conduit debt that it would have received if the City had issued all the bonds. The waiver is only for this one section of the development agreement. If the City were to need to issue debt, the contract already protects the City, as Presbyterian Homes would have to pay the difference between the interest rate of the bank - qualified bonds and the bonds that are not bank qualified. Councilmember Holden stated that Presbyterian Homes would be paying other municipalities for conduit financing and when Arden Hills had requested Presbyterian Homes to pay for a greater portion of the project they did not have the funds. Director of Finance and Administrative Services Iverson stated due to the changes in the amount the City is able to provide for Presbyterian Homes they have no other choice but to pay fees to other municipalities to obtain the needed funds. MOTION: Councilmember Holden moved and Mayor Grant seconded a motion to Approve the Waiver Letter as Presented and to Direct the City Administrator to Send the Letter to Presbyterian Homes of Arden Hills, Inc. The motion carried unanimously (5 -0). E. Call for Public Hearing — Presbyterian Homes Conduit Debt Director of Finance and Administrative Services Iverson stated as part of the development agreement with Presbyterian Homes, funding for the project is to come from the issuance of conduit debt or tax - exempt obligations. In order for the bonds to be considered tax - exempt, they need to be issued as bank - qualified bonds. No issuer of tax - exempt bonds may designate more than $10,000,000 of tax - exempt as bank- qualified in a calendar year. To move forward with the issuance of the bonds, a public hearing needs to be set and notice of such hearing published. The public hearing is scheduled for July 25, 2011. Once the public hearing has been held, the Council will be asked to approve preliminary approval to the issuance of the bonds. At this point, Presbyterian Homes will enter into negotiations with one or more jurisdictions to issue bonds and the Council will be asked to approve the issuance of those bonds by other jurisdictions. Mayor Grant asked if the City would be able to choose the jurisdiction Presbyterian Homes talked to about additional conduit financing. Director of Finance and Administrative Services Iverson stated the City would not be able to choose the jurisdictions from which Presbyterian Homes obtains the funding. MOTION: Councilmember Holden moved and Mayor Grant seconded a motion to Adopt Resolution 2011 -034; a Resolution Calling for a Public Hearing on July 25, 2011, and Authorizing Publication of a Notice of Public Hearing with Respect