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Regular City Council Meeting Monday, March 17, 2008 Page 13 Councilmember Ihlan addressed lines 18 and 22 of the staff report dated March 17, 2008, noting that allowing the bonds to be issued tax-exempt made them more attractive to investors and resulted in a direct benefit to Concordia, providing more available funds for the proposed project. Based on that benefit, Council- member Ihlan opined that the City would be providing public benefit to a private religious sectarian group. Councilmember Ihlan further noted that, while she had previously requested that staff provide a legal analysis on issuing bonds on behalf of a sectarian organization, that information had not been included in the staff re- port. Councilmember Ihlan expressed concern that further discussion was needed before the City considered providing public benefit to a private religious sectarian group. Councilmember Ihlan further noted that, since the City was the entity in- volved, and given the City's good credit rating, there would be no bond insurance required, which was a huge benefit in today's bond market. Mayor Klausing noted that the City's bond counsel was present to address Coun- cilmember questions, comments and concerns. Mary Ippel, Briggs & Morgan Ms. Ippel addressed Councilmember Ihlan's comments; clarifying that the City was issuing the bonds for the purpose of providing tax-exempt interest rates for Concordia, with the direct benefit being those reduced interest rates, and that the bonds were payable solely from credit and bonds of Concordia, and that there was therefore no liability on the City of Roseville. Ms. Ippel further noted that this was not a rated bond, and that under federal and state law, the interest was tax- exempt and this was abank-qualified bond, allowing the bank to charge a lower interest rate that would benefit the borrower due to the lower interest cost. Ms. Ippel, in addressing the specific project, noted that the facility was a Lutheran School, and that it was the opinion of the City's Bond Counsel, Briggs & Morgan, in reviewing financing educational facilities for schools and the entire realm of such projects, that this project was for non-sectarian purposes. Ms. Ippel advised that their financial review and determination was based on a more conservative approach by Briggs & Morgan, taking into consideration the use of the financing; review of whether there was any faith requirement for Concordia students and/or faith components in teacher contract language; pervasive religious components to daily education; type of school and grades represented (High School in this case); whether there was a chapel in classrooms; whether there was substantive inclu- sion of religious activities in everyday classrooms; and other considerations. Ms. Ippel advised that it was the legal opinion of Briggs & Morgan that the pro- posed financing was for non-sectarian portions of Concordia, and thus their rec- ommendation and opinion. • Councilmember Ihlan provided a bench handout and read information she had printed from Concordia Academy's website regarding their mission and values.