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Department Approval <br />�� ,�: �� <br />Item Description: <br />BACKGROUND <br />l�'�, <br />Jy <br />REQUEST FOR COUNCIL ACTION <br />Date: 06/15/09 <br />Item No.: l l.b <br />City Manager Approval <br />� / <br />Public Hearing to Consider Issuing Conduit Refunding Bonds for Eagle Crest <br />Inc. / Presbyterian Homes <br />State Statute provides for the issuance of tax-exempt bonds by municipalities for the benefit of housing <br />or long-term care facilities that are deemed to be in the best interest of the City, and to provide care at an <br />affordable cost. The bonds are considered conduit debt and do not constitute a financial obligation in <br />any part by the City. However, the City must still meet all legal requirements prior to issuing any tax- <br />exempt bonds or refunding bonds, including holding a public hearing. <br />Eagle Crest Inc. / Presbyterian Homes has requested that the City provide conduit refunding bonds for <br />the purposes of refinancing existing debt and new capital improvements for their facility located at 2925- <br />45 Lincoln Drive in Roseville as well as their Arden Hills facilities. The total amount of refinancing is <br />estimated to be $23,390,000. The City has participated in similar financing arrangements for <br />Presbyterian Homes in 1993, 1998, and 2007. <br />The City's Bond Counsel of Briggs & Morgan, has reviewed the legal and financing agreements, and <br />will be in attendance to answer any Council inquiries. <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 long-term care facilities than would otherwise occur by market factors alone. <br />Allowing the bonds to be issued tax-exempt (where applicable) makes the bonds more attractive to <br />investors and results in lower borrowing costs compared to traditional financing methods. This in turn, <br />provides more available dollars for the proposed project. <br />FnvaNCiaL IlviracTs <br />There is no fiscal impact on the part of the City. All costs of debt issuance will be paid by the applicant. <br />STAFF RECOMMENDATION <br />Staff recommends the Council approve the issuance of conduit refunding bonds for Eagle Crest Inc. / <br />Presbyterian Homes. <br />Page 1 of 11 <br />