Laserfiche WebLink
Department Approval <br />�� ,�: �� <br />Item Description <br />l�'�, <br />Jy <br />REQUEST FOR COUNCIL ACTION <br />Date: 06/29/09 <br />Item No.: 13.a <br />City Manager Approval <br />� / <br />Discussion on Policy and Procedures related to the Issuance of Conduit Debt <br />BACKGROUND <br />State Statute provides for the issuance of t�-exempt bonds by municipalities for the benefit of housing or <br />long-term care facilities. The bonds are considered conduit debt and do not constitute a financial obligation <br />in any part by the City. The City has actively participated in bond issues of this type for several decades <br />and has historically accommodated those requests whenever possible. <br />Recently, members of the City Council expressed an interest in having a more formal policy and procedure <br />process in place to guide the Council in determining whether to participate in these types of financings. It <br />was recognized that a more comprehensive review process could ensure a greater understanding of the <br />proposed project being financed and how it might benefit the City. <br />Sased on input from other municipalities, City Staff has developed a draft policy and procedure manual (in <br />the form of an application for financial assistance). The manual is included as an attachment to this memo <br />and is consistent with the policy reasons used in the past. There are however more up-front disclosure <br />requirements on the part of the applicant. <br />Staff will be available at the meeting to present an overview of the draft and to answer any Council <br />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 housing or long-term care facilities than would otherwise occur by market factors <br />alone. Allowing the bonds to be issued t�-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 />FINANCIAL IMPACTS <br />Not applicable. <br />STAFF RECOMMENDATION <br />Not applicable. <br />Page 1 of 2 <br />