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B R I G G 5 ANp M O R G A N Mz-. Patrick Trudgeon Augus� 1, 2008 Page 2 including bonds on which the principaI and interest are payable exclusively from the income and revenues of the project financed with the proceeds of the bonds, or exclusively from the income and revenues of certain designated projects, whether or ilot they are financed in whole or in part with the proceeds of the bonds. The bonds may be additionally secured by (I} a pledge of any grant or contributions from the federal government or other source; (2) a pledge of any income or revenues of the HRA from the project for which the proce�ds ar the bonds are to be used; or {3) a martgage of any project or other property of the HRA. The revenue bonds can be issued �y the HRA without �zo]ding a puhlic hearina. Because these bonds are revenue bonds, and not payable frozn the full faith and credit of the eity, it may be difficult to market these bonds, Some HRAs have agreed to secure the revenue bonds with a pledge of all or a part of the special tax fhat an HRA is authorized to levy pursuant to Miiinesota Statutes 469.033, Subd. 6. The an�ount af the special tax levy is an anlount appraved by the governing body of the city, but shall not exceed .0144% of t�able market value for the current �evy year. The special tax is outside levy limit laws because it is approved by the city and levied by the HRA. Minnesota Statutes, Section 469.034, Subd. 2 authorizes a HRA to issue a bond pledging the general obligation of tl�e city in which the HRA is located, pro�ided that the HRA must find that the pledged revenues will equal or exceed 110% of the principal and �nterest du� on the bonds for each year. The inaximum amount of general obligations that may be issued and outstanding under this statutory authority, equals the greater af (1) ane�half of 1% of the taxable market value of the city or (2) $3,000,000. This type of bond can only be issued to finance a qualified housing development project, whzch is a hausing developmei�i project providing housing either for the elderly or for individuaIs and families with incomes not greater than 80% of the rnedian family incame as estimated by the United States Department of Housing and Urban Development for the metropolitan area in which the project is located. The principal annount of the bonds must be approved by the governing body of the city and the governiilg body of the HRA. Public hearings must be h�Id an issuance of the bonds by both the HRA and the city. The hearings must be held at least 15 days, but not more than 120 days before the sale of tne bonus. if you have additional c�uestions, do not hesitate to contact me. V ery truly yours, �' r / , ,j r; �✓ �` � Mary L: Ippel MLI/ms z2ia�so�1