Agenda - Council - 03/10/2009 - Laserfiche WebLink

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COUNCIL BUSINESS Case #1: Refinancing of Anoka County HRA Bonds Relating to the Savannah Oaks Senior Housing Project Finance Officer Lund stated that Karen Skepper from the County and representatives from Ehlers and Associates are here to discuss this case. She noted that the Council adopted refinancing for the Savannah Oaks housing in 2007, and the bond sale never transpired. Ms. Skepper, Community Development Manager for Anoka County, noted that refinancing again makes sense for this project. She stated that all of their other projects have been refinanced except this one. She reviewed the background on what refinancing would mean and noted that this would result in a slight change in the JPA. She stated that this refinancing would remove this debt from the City's general obligation. She stated that the other change would be in the 6 year, they would switch to an Anoka County preference first rather than the Ramsey citizen preference. Stacy Quilvang, Ehlers and Associates, stated that this would be refinancing the principal payments on the bonds for years 2010 through 2028. She stated that the pricing calls today showed rates between 1% and 4.35 %. She reiterated that doing this would relieve the City's general obligation. Councilmember Dehen asked what this would mean to our residents. Ms. Quilvang stated that this would mean that since the general obligation wouldn't lie with the City, any future borrowing could be at better rates. She stated that also with the County taking this on, there is no longer an obligation for the City so you wouldn't have to tax residents for the shortfall. She stated that she really doesn't see a downside for the City. Councilmember Look asked about the $320,000 equity contribution mentioned in the staff report. Ms. Skepper stated that Ramsey is part of the County HRA, so the funds that will be used will come from that pool of money. Councilmember Look stated that he sees the County having a definite interest in refinancing and realizes that the City could potentially have a better bond rating, but his concern is that the new Council may be getting broadsided with this because they are looking at a bond sale tomorrow. He stated that he sees the County having a lot to gain and the City not necessarily having a lot to gain. He stated that he would like to keep the $320,000 for other projects for the City. Ms. Skepper stated that they are a reactive HRA and noted that the City does benefit from this refinancing because it reduces interest rates and eliminates small debt occurring on the City's general obligation. Councilmember Elvig asked how big the overall pool is. City Council / February 10, 2009 Page 5 of 8