Agenda - Council - 05/10/2022 - Laserfiche WebLink

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CITY OF RAMSEY CONDUIT DEBT POLICY TERM & CONDITIONS FOR THE ISSUANCE OF CONDUIT DEBT (Tax Code Allows City's to issue Conduit debt, but not be held accountable for repayment of debt) Authority: Under Minnesota Municipal Industrial Development Act, Minnesota Statutes, Sections 469.152 to 469.165 (the "Industrial Development Act:), the City of Ramsey has authority to issue industrial, commercial, and health care revenue bonds or notes to attract or promote economically sound industry and commerce to the City. Under Minnesota Statutes, Chapter 462C (the "Housing Act") the City is authorized to issue housing revenue bonds to finance multi-family residential housing projects for low and moderate income persons and elderly persons. Projects must be consistent with a Housing Program as these terms are defined in the Housing Act. Purpose: Municipalities may be asked by not-for-profit and other entities to issue pass-through, conduit debt. These projects are not projects of the governmental unit but of a separate corporation. In order to expedite the assistance that the City of Ramsey can offer and to avoid a resource drain on the City of Ramsey requires the following: The corporation wishing assistance must first request that the Financial Director of the City review their proposal and provide the information and deposit the fee detailed below. After the Financial Director reviews the proposal the applicant may then request that the City Attorney review their proposal and grant permission to move forward to the public hearing stage. The applicant must provide to the Financial Director documentation about the entity requesting the assistance, the project, and the proposed financing method. The City also requires that the applicant assume all of the costs incurred by the City in examining the legal and fiscal aspects of the project as well as ongoing monitoring and reporting of outstanding bonds once issued. The City is to be reimbursed and held harmless for and from any out-of-pocket expenses related to the tax-exempt financing including, but not limited to, legal fees, financial analyst fees, bond counsel fees, the City's staff expenses in connection with the application, and any deposits or application fees required under state law in order to secure allocation of bonding authority. The applicant must execute a letter to the City undertaking to pay all such expenses. A copy of the required letter entitled"Indemnification Letter of Agreement" is attached as Exhibit A. Prior to closing and delivery of the bonds for the project, the applicant must pay, or commit to pay at closing an administrative fee in the amount of 1% of par of the bonds (or as negotiated based on the size of the issue). The administrative fees required by this paragraph will be adjusted at or paid prior to delivery of the bonds if necessary to ensure compliance with the Internal Revenue Code and regulations.