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4H, Resolution 2010-061 Giving Final Approval to the Proposed Issuance of Revenue Notes for Northwestern
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4H, Resolution 2010-061 Giving Final Approval to the Proposed Issuance of Revenue Notes for Northwestern
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11/22/2010 12:35:01 PM
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Proposed Issuance of Revenue Notes for N
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Proposed Issuance of Revenue Notes for N
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Proposed Issuance of Revenue Notes for N
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11/15/2010
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DATE: March 29, 2010 <br />�I�EN HILLS <br />MEMORANDUM <br />TO: Honorable Mayor and City Council Members <br />Patrick Klaers, City Administrator <br />FROM: Sue Iverson, Finance Director/Treasurer <br />SUBJECT: Final Approval for Northwestern College Conduit Debt <br />Background <br />The City Council held a public hearing and provided preliminary approval for the <br />issuance of tax exempt obligations for the benefit of Northwestern College on November <br />30 2009. On March 29, 2010, the City Council provided final approval for the issuance <br />of these notes pursuant to a loan agreement. At that time, the tax exempt notes were to <br />be placed with friends and alumni of the Borrower. <br />Northwestern College requested this financing for a new facility Community Life Commons <br />(student union) for its campus. The maximum amount of financing requested is $9,000,000. The <br />zoning of this project is under the terms and conditions of the PUD agreement between the <br />College and the City approved in October, 2007. The City will be reimbursed and held harmless <br />for all out -of- pocket expenses related to the financing according to the City's application process <br />and the application filed. According to the City's policy, the City will receive 1/8 of 1% (.125 <br />of the outstanding principal balance of the bonds annually, the first year this would amount to <br />$11,250 and the bonds are from 5 to 25 years. <br />Current Discussion <br />The Borrower has determined that it is not in their best interest to continue with the type <br />of a financing structure approved by the City Council on March 29, 2010, so they have <br />negotiated with M &I Bank to purchase tax exempt bonds with a different financing <br />structure. <br />The City's fee will be 118 of one percent per year on the outstanding principal balance <br />(estimated that $8,000,000 of bonds will be issued). This will be paid semi annually on <br />November 1 and May 1 each year. The proposed estimated prorated fee paid at closing <br />on November 18 is $4,777.78. <br />City Council Meeting <br />Metro- inet.us \ardenhills\Admin \Council\Agendas Packet Information\20 1 0\ 11 -15 -10 Special <br />Mtg \Northwestern_College_Conduit Debt.doc <br />Page 1 of 2 <br />
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