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ARDEN HILLS CITY COUNCIL—September 14, 2009 12 7C. Conduit Debt Policies(continued) applications and they are very similar to what other municipalities in the Twin Cities metropolitan area are using. This procedure will provide a process whereby the applicant provides the City all the data needed about the offering and the fees that are to be paid. Another issue is Post-Issuance Compliance. The Financial Planning and Analysis Committee have developed a "Post-Issuance Compliance Policy" to comply with the Internal Revenue Code regulations. A set of procedures has also been developed to implement the compliance policy. Bond Council has also reviewed this policy and procedures. Councilmember McClung stated that in the past the Council has used a percentage of the amount being asked for to calculate a fee. He asked why this was not being used in the procedures. Finance Director Iverson stated that in the past the rate had been negotiated on a case-by-case project. Other cities are using an annual fee based on the outstanding amount rather than c one-time charge. It is estimated that the 1/8 of 1% annual rate will bring more revenue to the City. This revenue is an asset for the City. Councilmember Holden asked how the figure of 1/8 of 1% was arrived at. Finance Director Iverson stated that Staff had evaluated what other cities were doing and the rate of 1/8 of 1% was a common rate that was charged. Mayor Harpstead stated that one-time fees at the beginning or an annual annuity of the outstanding amount were the choices that the City had and the annual annuity of the outstanding amount brings in more funds for the City. Mayor Harpstead stated that the Post-Issuance Debt Compliance Policy was initiated because other cities were caught and audited by the IRS because they had not managed the conduit financing that they had on their books. It becomes and issue when individuals use conduit financing and during the time when the project is not built earning market rate on the money which ultimately became a mechanism of profit which no longer fit under the tax free purpose. Councilmember Grant stated that there had been conversation in the past about cities marketing their conduit financing. Part 1 under General states that the City has the authority to "attract or promote economically sound industry and commerce to the City". He asked if this limited the City to just Arden Hills or if the City would be able to take on other conduit financing.