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ARDEN HILLS CITY COUNCIL—MAY 12, 2014 10 Director of Finance and Administrative Services Iverson estimated that the City would receive present value $85,000 over the life of the bond. Councilmember McClung stated that his first impression of this request was to support the matter. However, after reviewing Exhibit C in his agenda packet, he has concerns with the how the request has been made, in that the University of Northwestern is playing one entity against another to receive a better bond rate. Mayor Grant commented that the City does not know the amount of savings the University of Northwestern will receive by the proposed refinancing. Councilmember Holmes asked if the administrative rate charged by the City was reasonable. Director of Finance and Administrative Services Iverson reported that the percentage charged by the City of Arden Hills was the same as the rate charged by the City of Minneapolis. Councilmember Holden explained that the University of Northwestern was trying to reduce their financial burden and she believed that the City would take the same action. She recommended that the City support the college and their request. Councilmember Werner discussed the improvements the college will make to its campus. Mayor Grant questioned if the University of Northwestern could pay off their bonds early. Mr. Utley reported that this would be allowed. Further discussion ensued regarding the bond refinancing and interest rates. Mayor Grant inquired why the University of Northwestern was seeking bonds from another entity. Director of Finance and Administrative Services Iverson indicated that the City was only able to issue $10 million a year in Bank Qualified Tax Exempt Bonds. This led the University of Northwestern to pursue an alternative source in order to receive the total of$28 million in bonds. Mr. Utley reviewed new regulations that would require banks to have higher reserves for letters of credit. This would require that these bonds be refinanced, if not now, then in the near future. Mayor Grant did not believe that the University of Northwestern was saving that much through the proposed refinancing, while the City would be losing $85,000. Councilmember Holmes stated that the University of Northwestern was looking to save money while also meeting the new bank regulations. It was her opinion that it was in the City's best interest to support the refinancing as it would benefit the University of Northwestern in the long- run.