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Motion carried. Voting Yes: Chairperson Riley, Members Elvig, Steffen, Kiefer, LeTourneau, and Strommen. Voting No: None. Absent: Gromberg. Case #1: Municipal Center Bonds Chairperson Riley noted included in the EDA's packet is a memo from Member Gromberg reiterating some of his points in opposition to these bonds. Finance Officer Lund explained the action before the EDA is the actual bond sale for the Municipal Center. The Council will consider the actual final adoption tonight. If the Council does not agree to this project the sale of the bonds will not go through. Paul Donna of Northland Securities explained with the adoption of the proposed resolution the EDA will be authorizing the execution and delivery of a ground lease agreement and a lease agreement between the EDA and the City of Ramsey, and an Indenture of Trust between the EDA and US Bank who will be acting as Trustee of all bond proceeds. The documents have been prepared and reviewed by Briggs and Morgan, the City's Bond Council. He reviewed the tbllowing information with the EDA: ground lease agreement, lease agreement, Indenture of Trust, debt service schedule, net debt service schedule, pricing summary, operation of project construction fund, and detail costs of issuance. Me~nber Elvig inquired about the effect of the bond rating being at A2 rather than Al. Mr. Donna replied the effect is minimal. The A ratings are at Al, A2, and A3, and typically there will be some Al's and A2's traded right on top of each other. Chairperson Riley asked if capital improvement bonds would be at an A1 rating. Mr. Donna responded in the affirmative. Member Elvig questioned if the added cost of G.O. bonds versus lease revenue bonds has been minimized due to the lower rate. Mr. Donna replied the G.O. bonds will always cost a little more, due to the fact that it is a more risky transaction for the investor. However, the City has done the best it can to mitigate the risk by having the bonds insured. Member Elvig stated the capitalized interest is an important factor. The Council and staff worked hard to project the tax rates the City will have. There was a tax spike in the first couple of years, which came down considerably in the future. To prevent the tax spike there were mechanisms put in place to draw extra funds and capitalized interest in to bring the tax capacity rate down to where it has been the last couple of years. By doing this the tax rate will not be increased. Chairperson Riley asked if there are additional bonds being discussed at the Council meeting tonight. Finance Officer Lund replied there will be G.O. bonds issued for the county's portion of the AUAR road costs. The county's debt service payments will pay back that bond as it comes due each year. Economic Development Authority/May 24, 2005 Page 3 of 8