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Regular City Council Meeting Monday,April 22, 2024 Page 10 supplies to teachers at a teacher training location, so facilities for training teachers. The Legislation requires that if for some reason the organization goes away, the City then takes over that program. Mayor Roe thought from what City Attorney Tierney was saying,the City does not actually have ownership of the building. The City has ownership of the program. City Attorney Tierney explained she is not the best person to talk to about the tax law as it pertains to tax exempt on properties.The Federal law requires that the City own it,but they consider the City having a lease that will last for 125 percent of the life of the project to rise to the level of what they would consider an ownership interest. She does not know what the life of the project would be, but she heard thirty years so the City would have to give a forty-five-year lease. Councilmember Schroeder asked if taking on these bonds affects the City's ability to take on bonds to do the City's projects. She also asked if this would go against the City's rating. Mr. Trudgeon indicated it would not because the City would be receiving a grant. The City is not actually borrowing. He did think there was a liability there as the City Attorney outlined that the City would have to take over the program if the non- profit no longer existed. Councilmember Strahan asked if the program were no longer in operation and it came back to the City,would the City would have to conduct the program or decide as an organization to change what the scope of the program was? Mayor Roe thought it would be that or give the money back. City Attorney Tierney explained because these are tax exempt bonds,there are bond holders who have their ability to continue to hold bonds that are exempt from Federal taxes and relies on the continuation of this program. So, the City would need to take over the program. She did not know whether or not it could be modified but she did not think it could. It is tied to the original legislation that created the program. If the City failed to operate the program, this did not mean that city employees would need to run the program,the City could contact another non-profit to run the program, but the City is responsible to make sure the program keeps operating. If the City fails to take that responsibility, it could happen that the State could come to the City to pay the money back. Councilmember Schroeder asked if the City had any input before the bill was introduced. Mr. Trudgeon explained the City did not have any input, but he did see a draft of this.