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Attachment 1 RACHEL G. TIERNEY Attorney at Law Direct Dial: (612) 337-9234 Email: rtierney@kennedy-graven.com To: Pat Trudgeon From: Rachel G. Tierney, Attorney at Law KENNEDY & GRAVEN, CHARTERED D ate: Re: City obligations for receipt of state general obligation bond funds The Kids in Need Foundation (KINF) has asked the City Council to support their request for $5,000,000 in state generalobligation bond funds to establish a 60,000 square foot distribution center for teachers and students in Roseville (the “Facility”). The Facility will include: 1) an expended teacher resource center where teachers shop for supplies at no cost; 2) a teacher training site for workshops, continuing education, and professional development; 3) an expanded volunteer center where community members can pack school supply kids for students and teachers; and 4) increased warehouse space to support the Rural and Indigenous School Equity program. The Facility will be designed to operate a supply distribution and educator resource center in the city of Roseville to support underserved students and teachers throughout Minnesota (the “Program”). Tr the State of Minnesota (the “State”)to issue general obligation bonds (the “State he authority fo GO Bonds”) derives from the Minnesota Constitution article XI, section 5, clause (a), which allows the State to issue public debt to appropriate or loan to any public subdivision of the State for acquisition or betterment of public land and buildings. Minnesota Statute § 16A.695 (the “Act”) and Fourth Order Amending Order of the Commissioner of Finance Relating to Use and Sale of State Bond Financed Property executed by the Commissioner of Minnesota Management and Budget and dated July 30, 2012, as amended (the “Commissioner’s Order”) lays out the State’s requirements related to properties financed by State GO Bonds. Proceeds of State GO Bonds may only be used by KINF for costs relating to the Facility that are of a capital nature that are used to operate a governmental program, and for predesign and design activities. Grant proceeds may not be used for general operating expenses, staffing, or general master planning. Assuming that the City decides to support the Facility, it will need to do the following: ENTER INTO A STATE GRANT GREEMENT. All grants financed with the proceeds of State GO Bondsmust be evidenced by a grant agreement. The State has created a model agreement that can be found here: https://mn.gov/mmb/debt- management/capital-projects/grant-agreements/grant-agreements-go-bonds.jsp. The grant agreement is a state form, and the City will likely not be allowed to make any changes except for the inclusion of project specific information. As required by the Act and the Commissioner’s Order, the grant agreement will require the City to have an “ownership interest” in the real property and the Facility constructed thereon. That ownership interest can be fee simple ownership, or a 1 RS160\\1\\946530.v3 Qbhf!333!pg!494