Agenda - Council - 02/10/2009 - Laserfiche WebLink

Home

removing the priority list and allow the County to refinance the bonds. A copy ofthe January 8, 2008 minutes are attached. With the City's agreement of the refinancing, the Joint Powers Agreement with the County HRA and the City needed to be amended. As part of the amendment, the County asked for a five-year operating deficit agreement, which is similar to what the County has with other HRA-financed senior housing projects. Under this agreement, if project revenues (rent fees) plus the HRA levy are insufficient to pay the operating expenses of the facility (not debt service), the City would be required to fund such a deficit for a period of five years only. .The City has approximately $320,000 from prior year HRA levy collections, currently being held at the County, to cover these deficits. The Amendment to the Joint Powers Agreement was adopted under consent at the April 22, 2008 regular City Council meeting. After the initial council presentation in January, the County BRA and the County's finance group (Ehlers) contacted the City about using the City's $320,000 as an equity contribution to pay down the debt. The County BRA stated that their primary objective was to ensure long-term financial stability of Savannah Oaks and recommended that some of the City's levy balance be used to achieve this. The use of this balance would result in the reduction in the amount of the HRA County levy needed in future years. A copy of the March 25, 2008, minutes are attached in which City Council authorizes the $320,000 equity contribution. Representatives from both the County and their financing agency: Ehlers and Associates will be present at the February 10,2009 City Council meeting to discuss the current refinancing. Funding Source: The debt attributed to the project has been financed by the rental revenue of Savannah Oaks and the Annual HRA County Levy. It was previously adopted that the City contribute $320,000 of its accumulated BRA levy proceeds held at the County towards the refinancing of the debt. Staff Recommendation: Based on previous council adoption of the refinancing and amendment to the Joint Powers Agreement with the operating deficit clause, it is recommended that the City agree to the refinancing to take advantage of the favorable interest rates. Council Action: Motion to recommend Council authorize resolution #09-02-XXX related to the issuance of refundirig bonds by the Anoka County HRA for the Savannah Oaks Senior Housing Project and authorizing an amendment to the Joint Powers Agreement and Operating Deficit Agreement. -194-