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ARDEN HILLS CITY COUNCIL — July 25, 2011 7 6.A. Presbyterian Homes Conduit Debt — Public Hearing and Preliminary Approval to Issue Bonds (continued) than $10,000,000 of tax - exempt bonds as bank - qualified bonds in a calendar year. In 2009 and 2010, the Federal government raised this limit to $30,000,000, but effective January 1, 2011, the limit was reset to $10,000,000. Presbyterian Homes has agreed to pay the City of Arden Hills the full amount of the conduit debt fees regardless of who issues the bonds. To move forward with the issuance of the bonds, a public hearing needs to be held and preliminary approval to issue revenue obligations needs to be granted. 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. The City of Arden Hills will receive the conduit debt fee as if the City issued the entire amount of the bonds, regardless of what other jurisdictions may charge Presbyterian Homes. Mayor Grant clarified the City would be under no obligation to repay these bonds. Arden Hills is issuing only a portion of the $34 million that the project is requiring. Councilmember Werner asked why the City was only issuing $10 million of the required $34 million in bonds. John Uthey, City's bond counsel, Kennedy & Graven, Chartered, explained the reason for the decrease in the maximum amount allowed by the Federal Government. He also explained there are two reasons borrowers ask for bank qualified bonds. These include a more favorable interest rate and a bank qualified bond can be purchased by another bank. He clarified the City is a conduit to provide tax - exempt status and this is not considered debt of the City and it is not considered for rating purposes. Councilmember Holmes stated the City has received a letter from the Metropolitan Council supporting this project. Mayor Grant opened the public hearing at 8:17 p.m. Mayor Grant closed the public hearing at 8:18 p.m. MOTION: Councilmember Holmes moved and Mayor Grant seconded a motion to Adopt Resolution 2011 -039; A Resolution Approving a Housing Program Relating to a Senior Rental Housing Development to be Located in the City of Arden Hills; Granting Preliminary Approval to the Issuance of Revenue Obligations by the City to Finance the Senior Rental Housing Development; and Approving and Authorizing Certain Related Actions. The motion carried unanimously (4 -0). 7. NEW BUSINESS A. Public Works Facility — Floor Drain and Heat Installation