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ARDEN HILLS CITY COUNCIL WORK SESSION — APRIL 8, 2024 4 asked if the Council was interested in being the primary bond holder for this project or should individual debt be issued by all parties involved in the project. Councilmember Holden commented on how the City would need to bond for TCAAP, the fire department and for trails. She questioned if the City could bond too much and if its bond rating could go down. City Administrator Perrault indicated he couldn't speak to when the City's bond rating could go down, but he understood the bonding capacity was 3% of the City's estimated taxable market value of the City, and approximated the bonding capacity to be $50 million. Councilmember Holden asked what options would be provided if Arden Hills were to bond for the project. City Administrator Perrault explained the City would have more control over the property if the department were to dissolve, given how the JPA was drafted. Councilmember Monson asked what bonding would be required for TCAAP. Councilmember Holden stated the City would have to bond for water and several items on TCAAP. She commented she was unsure how other items would be paid for on TCAAP, such as a new Public Works building and if a Civic Area was constructed. Councilmember Monson asked if Councilmember Holden was concerned about bonding for the full fire department project given the fact the City may want to bond for other things in the future. Councilmember Holden stated this was a concern for her, along with the fact the City may have to pay higher interest rates. Councilmember Rousseau asked if there were risks that other parties may not make their payments. City Administrator Perrault explained this risk was low. He noted the other parties would be under a legal agreement and could be sued. He indicated the City could require the other parties to pass GO notes to pledge obligations for their portion of the project. Councilmember Rousseau questioned what Shoreview's appetite was for the full bonding. City Administrator Perrault believed Shoreview was not interested in bonding the full project. Councilmember Fabel asked why the fire department could not issue for the bonds. City Administrator Perrault reported the fire department was a private non-profit and the City funds their activities. He explained the cities would receive a lower interest rate and would have to fund the project. He stated a JPA was in place for the future operation of the new station. He stated the City's bond attorney has explained the JPA likely will not be allowed to issue debt given the fact they have no debt history.