2015 05-19 CC PACKET - Laserfiche WebLink

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11le Gent fake Note will not constitute.a.; encral or moral ob.ligtttion of Gem bake and will not be sec.iired: by or Payable f.roni .any property Or assets of* Ciem bake (other tltarz tire.. interests of Gem Lake in. the Loan Agreentertt) and twill not be secured. by any .y taxing power of Gem Lake. The G.ern Like Note will not be subject to any delis limitation imposed -on .Gear Lake and the issuance of the Gem Lake Note will not leave aiiy adverse impact on the credit rating of Dent Laker even in the event That the Borrower encounters financial difficullies with respeetto.the facilities to be refinaliccd. with the proceedof the Gent Lake Note: l'fte (.fern Lake Note, is ptrpa§ed to *lie issued pursuant to MinrtesOta Statutes, .Cliaptet• 442.C._ as trnteIl cl.. (tile "Act"). The. Giant .l..Ake Note is proposed .to be issued as a tax-exempt.obligation; rite. interest on Which is excluded from gross income for federal income tax purposes. Banks and: :other financial 'institutions gciiel-ally (10 not.get tile. benefiil ofthe ttrx-e.xcrrtption of municipal bonds,.bui Section 265(b.)(3) cif'tlie Internal Revenue ocle: of 1986, as amended (the "Code"), permits each issuer .of tux -exempt obligations to designate up to S.I0,000;0U0 of tax-exempt Uunds as. "qualified tax-exempt obligations" (sometimes referred to as "baak- qualified bonds") that. are eligible for purchase by brinks and other financial .institutions. In order fo issue bank-clttalified bonds, the issuer must not expect to issue more. than10,¢ l0.0.000 of bonds (other than private. activity bonds that are not qualified 104(c:)(3) bonds) in a calendar year. The Borrower has requested. that. bent Lalw designate the Gem Lake ':Vote as .a qualified tax-exempt obligation for purposes of Suction 265(h)(3) of the Code, If -Gent Lake Itas no lilans to issue bonds for its oven purposes its 2015, the Gem Lake Now could be issued lit the antoutit Of' $10.000,000. if Gem Lake, neecls to retain the �abiIity to Jssue bands Liar its Own purposes in 20 I5, the Gent Lake Note.cottid be; issue({ in a smaller princilxtl amount and still meet the Borrower's needs. Own Lake is currently considering reserving approximately .$1.500,000 .of the 2015 SI0,0f}U,t){)0 bank qualification limit for its oven purposes. Isstriitg the Gem Lake Note in 2.075 +will leave no impact on Gem ability to issue bank -qualified bonds in future years. 11'C em Lakes determines to proceed with issuing the Genf Lake I me for the. St. Andrew's project. it will need to hold a public hearing, adopt a. resolution authorizing the issuance of the Getn Dike Noteand. execute varteiuS related documents, including. the Gem Lake Note Lind the Loan Agreement, fit case the City Co wieil decides to move fiirtvord with. this financing, we have provided a t'orrn of resolution calling a 11 hearing which.could lv. adopted at the May ly. 2015 meeting to .schedule a public hearing and final approval lbr the .tune 1 G, 2015 meeting,. Under the terms of file. Loan Agreement, the Borrower will payall of.Gem Lake' fees and expenses and pay Gem I. -al e's administrative fec fbr issuing the Gent Lake Note, Please contact me with any questions you Have prior to fhe C.ottncil meeting. Sincerely, le:nny-BdUItoh 4609200 !s!f -MA.355-7