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Attachment A <br />AGE - NV <br />-ADEN HILLS <br />MEMORANDUM <br />DATE: August 25, 2025 <br />TO: Honorable Mayor and City Councilmembers <br />Jessica Jagoe, City Administrator <br />FROM: Joua Yang, Finance Director <br />SUBJECT: Church of St. Odilia Request for Conduit Debt Financing <br />Budgeted Amount: Actual Amount: Funding Source: <br />N/A N/A N/A <br />Council Should Consider <br />Approval of Resolution 2025-055, Giving Preliminary Approval to the Issuance and Sale of <br />Revenue Bonds or Other Obligations, and Approving a Deed Application and Scheduling a Public <br />Hearing for the benefit of the Church of St. Odilia located in Shoreview, MN. <br />Background <br />A conduit bond is when a private entity wants to undertake a project and is seeking to finance it <br />with tax-exempt bonds. Given that private entities cannot issue tax-exempt bonds directly, they <br />typically will work with government entities to act as a conduit issuer or serve as a pass -through <br />of that debt. This would mean the City would issue the bonds on behalf of the private entity, and <br />the bond proceeds would be loaned to that entity. There is no financial obligation for the City and <br />offers several benefits: <br />• The private entity is solely responsible for repaying back the bonds, the issuance costs, <br />and any out-of-pocket expenses (i.e. legal fees, bond counsel fees, financial advisor fees), <br />not the City. <br />• There is no impact to the City's credit rating or general obligation bonding capacity. <br />• The City would receive an annual conduit fee equal to .125% of the outstanding principal <br />balance of the bonds. <br />• This is a way for the City to issue tax-exempt bonds that benefit a project that serves a <br />public purpose. <br />The City has issued conduit debt in the past, with the most recent conduit debt issued in 2015 for <br />Presbyterian Homes. <br />The Church of St. Odilia has submitted an application to the City and has submitted a non- <br />refundable application fee in the amount of $500 according to the City's procedures for Private <br />Activity Revenue Bond Financing. The fees collected on this conduit debt issuance is estimated to <br />be $12,000. <br />Page 1 of 2 <br />