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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION — AUGUST 11, 2025 13 Finance Director Yang said there is no City liability with conduit debt financing. The City won't be liable for paying back the debt. The bonds are paid back by the private entity and the City's General Fund or credit rating are not at risk. There is no taxpayer burden because the private entity is solely responsible for repayment. The City's ability to issue its own bonds for City projects are not impacted. There is a public benefit. The City issues these bonds only for projects that serve a public purpose, such as a hospital expansion, an affordable housing projects or a non- profit university new building. Finance Director Yang said the process involves the City Council formally approving the bond issuance. This approval confirms that the project aligns with the City's public purpose. The City is willing to act as the conduit issuer. The City's role is primarily administrative and involves ensuring all legal requirements are met. We would work with our bond counsel andmunicipal advisor. There is no cost to the City. If we work with third parties, those costs would be covered by the private entity. Finance Director Yang said Staff is seeking Council discussion and direction on this topic to determine how to move forward. Mayor Grant said the City issues part of our bank -qualified financing, which is $10 million a year. We aren't going to use it the rest of the year. In doing so, it makes the offering tax-exempt rather than taxable for the person holding the bond. That lowers the interest rate. St. Odilia would get the benefit of the lower interest rate. The City takes 1/8th of 1%. Any expenses we incur beyond that are paid by the applicant. Councilmember Rousseau wasn't aware we can do this outside of the City jurisdiction. This is different than Presbyterian Homes in 2015. She wonders if this is a missed opportunity. She asked if we can promote this to other entities in the area. She tried to reach out to Propel. It has been ten years since anyone has utilized this. Should we be initiating conversations with non -profits in Shoreview or other surrounding communities? Mayor Grant said it is required by law that Shoreview has to pass an ordinance that says they're not interested. Then we would have the opportunity, if someone approaches us to do it. The legal unit of government has the first right. Councilmember Rousseau isn't talking about stealing. She wonders if we are missing communicating this and making sure more people are aware of it. Councilmember Holden said Presbyterian Homes wasn't for Arden Hills. They're headquarters is here and they got it. The buildings they used it for was not in Arden Hills. She believes it's in the white paper for resources. We have to be careful with TCAAP coming up. We have to make sure we don't go over the $10 million. Mayor Grant said it is an opportunity to help out an entity and the City will collect a little money. There's no risk. Councilmember Weber said he heard that it won't impact future bonding, but now it sounds like it could. Finance Director Yang said this is a one-time thing for this year.