02 CC Feb 1998 MINUTES - Laserfiche WebLink

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CITY OF GEM LAKE MINUTES OF PUBLIC HEARING (PROPOSED) REVENUE BOND FINANCING WHITE BEAR MONTESSORI SCHOOL. 23 February 1998. A Public Hearing for the purpose of receiving comments on (Proposed) Ordinance No.68 and Revenue Bond Financing for White Bear Montessori School was convened at 7:10 pm on 23. February 1998 in the first floor meeting room of Tousley Ford. Present were Mayor Emeott Council Members Birkebak and Nielsen, Treasurer Nordstrom and Clerk Magnuson. Representatives of the White bear Montessori School and several residents of Gem Lake were present. Mayor Emeott explainedthat the purpose of the meeting was to receive public comment on (Proposed) revenue bond financing of the acquisition and redevelopment of the Majestic Pines Church site at 1201 East County Road E by White Bear Montessori School. The Clerk verified publication of the notice of the meeting in the February 4tedition of the White Bear Press, the City's legal publication. Emeott:presented thefonnal request from the White Bear Montessori..School as contained in the minutes of the January City Council minutes and as Resolution No. 98-04 adopted by the City Council in January, 1.9.98. Etneott then introduced the..interestedparties from the White Bear Montessori School who made a brief presentation of why this financing is necessary. Statements regarding the following were. received: 1) prevailing law provides for this type of financing by non-profit corporations;:2) a description of how the financing. works; 3.).the net effect ofthe financing.on the schools future; 4) limitations „of liability on the City.. Statements regarding the following were presented: 1) an independent bond counsel hasbeen appointed; 2) articles of incorporation as non-profit corporation and accreditation were verified; 3) limitations of long-term andshort-term liability were examined; 4) consideration of adverse effects on he City from participating in this type of financing. Sol]y Robins was recognized Mr. Robins stated he did not feel the City should support this project with financing due to: 1) administrative drain on the Clerk's office; 2) thepotential adverseeffects of a $1,000,000 .bond on a city with a $100,000 budget 3) establishment of a precedent for doing this type of financing; 4) potential limitations ..of.future needs of the city for this type of financing.. He expressed concern regarding the financialstability of the school, askinghow they can repay such a large bond from revenues.. [le expressed concern that bond insurance has not been considered. He expressed concern that bond counsel is primarily representingthe school and not the city. Mr. McPhillips was recognized. He provided a history ofthe site from early . development through establishment of the church on the site, stating restrictions ofsize :were key considerations: He expressed concern that use :of this financing insured the school must grow and that additional facilities would become necessary..He stated that if a scaled down version of the school could be presentedto the community that was acceptable, he could then support the bond toinsure their. future. Mr. Hilkewas recognized. He expressed concern thatthe financialstability of the school was inadequate to support repayment of the bond without major expansion which was objectionable due to traffic and improper use of the site asa residential zoned property. Mr. Hiikealso expressed concerns over potential lender covenants that could later effect the property. Mr. Segermark was recognized. He restated Mr. Hilke's concernsand asked if a: complete financial review of the school's operations had been undertaken. When advised of 3 year projections, he questioned the validity of only 3 year projections where a 2- to 30 year bond was involved. Mrs. Shearen was recognized. She expressed concern over theamount of the bond and the size of the school in a.residentiai neighborhood. Mr. May expressed concern, restating. Mr. Hilke's and Mr. Segermark's concerns. Dr. Birkebak expressed concern based upon the sizeof the school and the fact. that, once enacted, restriction of growth on the site .became extremely difficult, Page 1 of