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Department Approval <br />K%k <br />Rls�&Spvl� <br />REQUEST FOR COUNCIL ACTION <br />Date: 06/09/05 <br />Item No. 7. e <br />City Manager Approval <br />Item Description: Consider Setting a Public Hearing to Acknowledge the Expenditure of Tax - <br />exempt Funds for Presbyterian Homes. <br />BACKGROUND <br />Under Federal and State Statutes, municipalities are authorized to pledge their bond issuance authority to <br />non - profit groups for the benefit of multi - family and assisted - living housing facilities, including corporate <br />offices of said groups. If a municipality expects to issue or receive tax - exempt bond proceeds, either <br />directly or indirectly through separate establishments, it is required by federal law to hold a public hearing. <br />The City of Vadnai s Heights is proceeding with the issuance of tax - exempt bonds for the benefit of <br />Presbyterian Homes' office building located at 2545 Hamline Avenue in Roseville. Presbyterian Homes is <br />proposing to finance a $4.9 million office building addition less a Presbyteri an Homes $1.0 million equity <br />contribution, and to redeem the $560,000 current office building acquisition mortgage. <br />The purpose of the public hearing is to allow for public comment on the proceeds to be expended. No <br />special action is required by Council at the hearing. The process entails opening a public hearing, allowing <br />for public comment (if any), and closing the public hearing. <br />POLICY OBJECTIVE <br />Generally speaking, the public policy reason for City participation in these financings is to promote greater <br />investment in the City's multi - family and assisted - living facilities than would otherwise occur by market <br />factors alone. Allowing the bonds to be issued tax - exempt makes the bonds more attractive to investors and <br />results in lower borrowing costs compared to traditional financing methods. This in turn, provides more <br />available dollars for the proposed project <br />FINANCIAL IMPACTS <br />Not applicable. <br />STAFF RECOMMENDATION <br />Staff recommends the Council set a public hearing to acknowledge the expenditure of tax - exempt funds by <br />Presbyterian Homes. <br />Page 1 of 5 <br />