Agenda - Council - 02/24/2004 - Laserfiche WebLink

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issuance of l~se revenue bonds and authorizing the execution of various documents connection with the PACT School project. City Attorney Goodrich advised approval of the resolution would be contingent on his review. in Councilmember Kurak stated she agrees with this resolution, however, she was troubled that she could not find an escrow fund that is set up. She stressed the importance that this be very clear. City Attorney Goodrich advised page 117, paragraph 2A states the company would compensate the City for its inability to designate its bonds as bank qualified in 2004. Councilmember Kurak questioned when the funds will be put into escrow. Finance Officer Lund explained the funds will be held in escrow with the school's trust agency. In the loan agreement on Section 4.2B it states that the school will be responsible for payment to the City for any costs that are incurred from being non-bank qualified. Councilmember Kurak questioned if the escrow will be guaranteed in an account. City Attorney Goodrich explained the funds will come out of the bond sale and will be escrowed. A representative of PACT Charter School, explained the money will be held by the trustee of the bonds, which is Wells Fargo National Bank. Councilmembe/r Strommen clarified the school will be responsible for the fees if the City were to become non-bal~k qualified and that there is no other liability to the City for these bonds. City Attorney ~Goodrich explained page 119, paragraph 3G of the resolution states "...as provided in the iLoan Agreement and Indenture, the Bonds are not to be payable from nor charged upon any funds other than amounts payable pursuant to the Loan Agreement and money in the funds and accounts held by the Trustee which are pledged to the payment thereof; the City is not subject to any liability thereon..." City Attorney Goodrich advised the last sentence of this paragraph also ~tates the bonds shall not constitute or give rise to a charge against the general credit or taxing!powers of the City. it also states that the City will not be obligated to tax to pay on the bonds. Councilmembe~' Strommen clarified for the record these bonds are done under the authority of Minnesota Stat~ Statute Section 469.1522 to 469.1651. The purpose language of this statute talks about redevelopment in blighted areas. The City has been informed this does qualify under that statute. City Attorney Goodrich explained a representative from the charter school was present in December and limguage in the resolution was changed based on comments by the Council. City Council/February 10, 2004 Page 8 of 18