Laserfiche WebLink
Department Approval <br />e,4 7"e. A",Y4 <br />Rskspac+Ey <br />REQUEST FOR COUNCIL ACTION <br />Date: 05/18/09 <br />Item No.: 7.c <br />City Manager Approval <br />Item Description: Consider Setting a Public Hearing for the Purposes of Issuing Conduit Refunding <br />Bonds for Eagle Crest Inc. /Presbyterian Homes <br />1 BACKGROUND <br />2 State Statute provides for the issuance of tax - exempt bonds by municipalities for the benefit of housing <br />3 or long -term care facilities that are deemed to be in the best interest of the City, and to provide care at an <br />4 affordable cost. The bonds are considered conduit debt and do not constitute a financial obligation in <br />5 any part by the City. However, the City must still meet all legal requirements prior to issuing any tax - <br />6 exempt bonds or refunding bonds, including holding a public hearing. <br />7 <br />s Eagle Crest Inc. /Presbyterian Homes has requested that the City provide conduit refunding bonds for the <br />9 purposes of refinancing existing debt for their facility located at 2925 -45 Lincoln Drive in Roseville as <br />lo well as their Arden Hills facilities. The total amount of refinancing is estimated to be $23,500,000. The <br />11 City has participated in similar financing arrangements for Presbyterian Homes in 1993, 1998, and 2007. <br />12 <br />13 The City's Bond Counsel of Briggs & Morgan, has reviewed the legal and financing agreements, and <br />14 will provide an unqualified opinion as the legality of the bonds. <br />15 POLICY OBJECTIVE <br />16 Generally speaking, the public policy reason for City participation in these financings is to promote greater <br />17 investment in the City's long -term care facilities than would otherwise occur by market factors alone. <br />18 Allowing the bonds to be issued tax - exempt (where applicable) makes the bonds more attractive to <br />19 investors and results in lower borrowing costs compared to traditional financing methods. This in turn, <br />20 provides more available dollars for the proposed project. <br />21 FINANCIAL IMPACTS <br />22 There is no fiscal impact on the part of the City. All costs of debt issuance will be paid by the applicant. <br />23 STAFF RECOMMENDATION <br />24 Staff recommends the Council schedule a public hearing to consider the issuance of conduit refunding <br />25 bonds for Eagle Crest Inc. /Presbyterian Homes. <br />Page 1 of 7 <br />