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ARDEN HILLS CITY COUNCIL MAY 12, 201410 <br /> <br />Director of Finance and Administrative Services Iverson <br /> estimated that the City would receive <br />present value $85,000 over the life of the bond. <br /> <br />Councilmember McClung <br /> stated that his first impression of this request was to support the <br />matter. However, after reviewing Exhibit C in his agenda packet, he has concerns with the how <br />the request has been made, in that the University of Northwestern is playing one entity against <br />another to receive a better bond rate. <br /> <br />Mayor Grant <br /> commented that the City does not know the amount of savings the University of <br />Northwestern will receive by the proposed refinancing. <br /> <br />Councilmember Holmes <br /> asked if the administrative rate charged by the City was reasonable. <br /> <br />Director of Finance and Administrative Services Iverson <br /> reported that the percentage charged <br />by the City of Arden Hills was the same as the rate charged by the City of Minneapolis. <br /> <br />Councilmember Holden <br /> explained that the University of Northwestern was trying to reduce their <br />financial burden and she believed that the City would take the same action. She recommended <br />that the City support the college and their request. <br /> <br />Councilmember Werner <br />discussed the improvements the college will make to its campus. <br /> <br />Mayor Grant <br /> questioned if the University of Northwestern could pay off their bonds early. <br /> <br />Mr. Utley <br /> reported that this would be allowed. <br /> <br />Further discussion ensued regarding the bond refinancing and interest rates. <br /> <br />Mayor Grant <br />inquired why the University of Northwestern was seeking bonds from another <br />entity. <br /> <br />Director of Finance and Administrative Services Iverson <br /> indicated that the City was only able <br />to issue $10 million a year in Bank Qualified Tax Exempt Bonds. This led the University of <br />Northwestern to pursue an alternative source in order to receive the total of $28 million in bonds. <br /> <br />Mr. Utley <br /> reviewed new regulations that would require banks to have higher reserves for letters <br />of credit. This would require that these bonds be refinanced, if not now, then in the near future. <br /> <br />Mayor Grant <br /> did not believe that the University of Northwestern was saving that much through <br />the proposed refinancing, while the City would be losing $85,000. <br /> <br />Councilmember Holmes <br /> stated that the University of Northwestern was looking to save money <br />while also meeting the new bank regulations. It was her opinion that it <br />interest to support the refinancing as it would benefit the University of Northwestern in the long- <br />run. <br /> <br />