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Councilmember Tossey asked if it would be common to purchase a failing business for no <br />reason. <br />Ms. Skepper stated that is a decision for the City Council. The Anoka County HRA Board <br />approves the City's resolution and funding. She stated in the past 12 years, Anoka County HRA <br />has only turned down one request because it was not eligible based on Statute. <br />City Administrator Ulrich asked if the City can reduce the levy to only cover the debt service of <br />Savannah Oaks. <br />Ms. Skepper explained by State law, Anoka County can only levy one rate because it is <br />throughout their area of operation and they have to assure that debt service on each individual <br />senior housing building is served. They cannot levy a different amount in each city. <br />City Administrator Ulrich stated Anoka County has been cooperative and followed City requests <br />as long as it met Statutes. He asked if the Anoka County HRA has the ability to utilize funds for <br />a use the City does not agree with. He also asked if the City has the ability to veto such a <br />project. <br />Ms. Skepper stated the HRA tax is a County tax. The County levies it for housing <br />redevelopment purposes and follows the practice that the local officials should direct the use in <br />their community. However, State law backs them that it is a County levy so they have the <br />ultimate say over the use of the funds. Ms. Skepper stated she had posed that question and had <br />been told there is no intent to change the current practice but there is no way to determine what a <br />future elected body would do. <br />Councilmember Backous asked how the City's balance of $900,000 is tied with the Savannah <br />Oaks project. He noted the City is levying to cover that project and as long as there is debt <br />service, there is a levy. He asked why Ramsey has to enter into a new five -year agreement to get <br />out dollars that were levied against the City's residents. <br />Ms. Skepper explained that at the beginning of any economic development, in order to sell the <br />bonds, there has to be a debt service pledge. Anoka County has pledged the County HRA levy <br />as the primary support to pay off those bonds. In the case of Savannah Oaks, it was successful <br />from the beginning so they do not have to draw from the levy but the pledge must remain in case <br />rents do not cover the operating costs of the building. <br />Councilmember Backous stated the money is already sitting there so his concern is having to <br />enter into a new five -year agreement and levy residents. <br />Ms. Skepper stated Anoka County is bound to collect the levy since there is debt on Savannah <br />Oaks. She explained the fund balance can be used on a housing project but the purchase of a <br />business is outside of Statute. <br />City Council Work Session / June 11, 2013 <br />Page 3 of 9 <br />