Minutes - Council - 02/10/2004 - Laserfiche WebLink

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17) Adopt Resolution #04-02-037 Receiving Report and Calling a Public Hearing on hnprovement Project #04-12 (Sealcoat and Crackfill Traprock Commons) 18) Adopt Resolution #04-02-038 Receiving Report and Calling a Public Heating on Improvement Project #04-13 (Bituminous Overlay Bowers Drive) 19) Adopt Resolution #04-02-039 Receiving Report and Calling a Public Heating on hnprovem ent Project #04-14 (Bituminous Overlay Rum River Hills) 20) Adopt Resolution #04-02-040 Proclaiming Northstar Commuter Rail Day Central Minnesota Throughout Motion carried. Voting Yes: Mayor Gamec, Councilmembers Kurak, Zimmerman, Cook, Elvig, Pearson, and Strommen. Voting No: None. COUNCIL BUSINESS Case #1: Report from Finance Committee Removed fi'om the agenda. Case #2: Consider Authorizing the Issuance of Approximately $11.8 Million in Lease Revenue Bonds for PACT Charter School and the Execution of Various Documents in Connection with the School Project Finance Officer Lund explained that at the December 16, 2003 meeting, Council adopted Resolution #03-12-334 giving preliminary approval to the issuance of revenue bonds for the PACT Charter School Project. State and Federal law allows cities to issue bonds and loan the proceeds to nonprofit corporations to finance capital expenditures. By issuing tax-exempt bonds through the City, the Charter school reduces their borrowing costs due to the tax-exempt status. She advised that the PACT Charter School is now asking for the authorization for the actual issuance of the revenue bonds associated with their school project. The amount to be issued will not exceed $11.8 million. Finance Office Lund reviewed the documents relating to the bond issuance that also need to be executed. She advised that the PACT Charter School agrees to pay all principal and interest on the bonds so the City is merely a conduit and the money and obligation are between PACT and the trustee for the bondholders. PACT Charter School will be held responsible for all fees that are incurred for the issuance of this bond. Also, PACT will be required to cover all fees associated with costs incurred by the City relating to their own bond issuance if PACT's bond issue causes the City to become non-bank qualified. To remain bank qualified, which offers lower interest rates, the City must not borrow more than $10 million in any one calendar year. Staff recommends the Council adopt the draft resolution authorizing the issuance of lease revenue bonds and authorizing the execution of various documents in connection with the PACT School project. City Attorney Goodrich advised approval of the resolution would be contingent on his review. 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 Council/February 10, 2004 Page 7 of 18