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Department Approval: C REQUEST FOR COUNCIL ACTION Manager Approved: Date: 9/23/2002 Item No: VL A. Agenda Section: Public Hearing Item Description: Consideration of Issuing Tax-Exempt Bonds for Presbyterian Homes Background State Statute provides for the issuance of tax-exempt bonds by municipalities for the benefit of housing or long-term care facilities that are deemed to be in the best interest of the City, and results in no negative fiscal impact. The bonds are considered conduit debt, and do not constitute a financial obligation in any part by the City. However, the City must still meet all legal requirements prior to issuing any tax-exempt bonds, including holding a public hearing. Presbyterian Homes of Arden Hills, Inc., has requested that the City provide tax-exempt financing for the purposes of refinancing e�sting debt for their Roseville facilities. The total amount of financing is $8,950,000. The City has participated in similar financing arrangements in 1997 and 1998. The 143 bed facility provides housing, nursing, food service, and sponsored activities to older adults. At the August 19, 2002 Council Meeting, the City Council established a public hearing for September 23, 2002 to consider this matter. Discussion Items The City Council is required to approve any issuance of tax-exempt financing by the City. The City's Bond Counsel of Briggs & Morgan, has reviewed the legal and financing agreements, and will provide an unqualified opinion as the legality of the bonds and their tax-exempt status. There is no fiscal impact on the part of the City. All costs of debt issuance will be paid by the applicant. In addition, the City does not intend to issue any direct debt in 2002. As a result, this issuance will not jeopardize the "bank-qualification" Status of any new City debt issues. Attachment Enclosed is a Resolution approving the issuance of tax-exempt bonds, as prepared by Bond Counsel. Staff Recommendation Staff has reviewed the application and believes all necessary legal and fmancing provisions will be met. Staff recommends the Council approve the issuance of tax-exempt bonds for Presbyterian Homes of Arden Hills, Inc.