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Citizen Input! <br /> <br />Eric Zaetsch, 6521 154th Lane NW, Ramsey, stated that he was uncertain about the bonds. He <br />questioned if be City was issuing the bonds and would the City be liable for the bonds. He also <br />questioned iftiaere was a statute that applies to such bonds and defines the process. <br /> <br />John Carins, B, riggs and Morgan, stated that he was the bond counsel for the City of Ramsey and <br />was also rePr~enting the PACT Charter School. He explained that the City has no liability for <br />the bonds eve/¢ if there is a default. The bonds are paid for entirely out of the funds the school <br />receives andl tl~e school has agreed to reimburse the City for all the costs they incur with issuing <br />the bonds. Mr.,;. Cairns noted there is a statute that allows for such bonds to be issued. <br /> <br />Mr. Zaetsch r~,plied that he did not understand what the City's role was. He questioned if the <br />City was going to issue the bonds. <br /> <br />Mr. Cairns explained that under State Statutes 469.152 and 469.1651 the bonds are issued by a <br />governmental ~ntity issue so in this instance they would be issued by the City of Ramsey, but the <br />City would have no obligation. <br /> <br />City Attorney iGoodrich noted that these types of bonds are called conduit bonds, which means <br />the Charter School would be using the City to receive bonds. <br /> <br />Mr. Cairns rep!ied that that was correct. <br /> <br />City Attorney iGoodrich explained that the City has done this several times for other projects in <br />the City. It is not an unusual or unique situation. <br /> <br />Councilmemb~r Elvig requested that Mr. Cairns allude to what the remedies are if there is a <br />default on the bonds. <br /> <br />Mr. Cairns exP, lained that there wilt be a mortgage Placed on the property that will be held by the <br />trustee on behalf of the bondholders. If there is a default the bondholders can take the property <br />and then they Fan decide what to do with the property' based on the mortgage and the use of the <br />property. If they can't find an acceptable tenant for the building the property could be s01d <br />subject to the land use of the site. They have never had that happen. <br /> <br />Mr. Zaetsch stated it was then his understanding that there is the PACT School as an entity and a <br />corporation th&t will be building the building. Are the beneficiaries of the bond the PACT school <br />itself or the firln that will be building the property and is that information public or is it private. <br /> <br />Mr. Cairns re~lied that all the information is public. He explained that the contractor, Amcon, <br />will be paid a developer fee. When the bonds close, Amcon will be the contractor but no longer <br />the developer, i A not for profit organization will own the property. <br /> <br />Mr. Zaetsch S~tated that it was his understanding that the Charter School is not a religious <br />affiliated orgatfization and that there is no ChurCh/State connection. <br /> <br />City Council/December 16, 2003 <br /> Page 5 of 32 <br /> <br />P75 <br /> <br /> <br />