Agenda - Council - 07/12/2022 - Laserfiche WebLink

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Pact Charter School will be held responsible for all fees that are incurred for the issuance of this bond and per the signed Indemnification Letter of Agreement,holds the City and its officers, employees and agents harmless in connection with this issuance. Per the city's conduit debt policy, Pact Charter School would have been required to pay the City 1% of the par of the bonds (or as negotiated based on the size of the issue). A 1/2% fee has been negotiated to cover administrative costs over the life of the bond. Pact Charter School is also required to pay the city for any additional interest costs that the city may incur if the City determines that they need to bond a portion of the water treatment plant(placeholder of up to $10 million as the total costs of project have not been determined at this time). If the City did need to issue debt,the city would incur an additional interest expense due to the city's debt issuance now being considered non-bank qualified instead of bank qualified. To remain bank qualified,which offers lower interest rates,the City must not borrow more than ten million dollars in any one calendar year. The issuance of conduit debt is factored in when determining the city's debt issuance for a calendar year. Thus,Pact's $43M will exceed the ten million dollar cap and if the city does indeed issue debt in 2022, the city will pay an extra estimated 1/4% in interest rates on its issuance. Pact would hold these additional costs in escrow,until it is determined if the city will be issuing their own debt. Notification: The Public Hearing notice was published in the Anoka County UnionHerald on May 27, 2022 and the Public Hearing was held on June 14, 2022. Representatives From Pact and their bond underwriter from Robert W. Baird will be present. Time Frame/Observations/Alternatives: Alternative#1: Adopt Resolution#22-157 Authorizing the Issuance of Charter School Lease Revenue Refunding Bonds (PACT Charter School). Alternative#2: Deny issuance of Charter School Lease Revenue Refunding Bonds (PACT Charter School). Pact would have to find another government agency to issue on their behalf to take advantage of lower interest rates via conduit borrowing. Funding Source: Incurred expenses will be paid by Pact Charter School. Recommendation: If the Preliminary Plat, Final Plat and Site Plan for PACT Charter School is approved, staff recommends adopting Resolution#22-157 Authorizing the Issuance of Charter School Lease Revenue Bonds in a not to exceed amount of $43 million. Outcome/Action: Adopt Resolution#22-157 Authorizing the Issuance of Charter School Lease Revenue Refunding Bonds to Finance and Refinance a Public (Charter) School Project Pursuant to Minnesota Law, and Authorizing the Execution of Various Documents in Connection Therewith(Pact Charter School Project). Attachments Resolution#22-157 Authorize Issuance Lease Revenue Bonds -Pact Loan Agreement-Pact Indenture of Trust-Pact Mortgage, Security Agreement&Assignment of Rents-Pact Bond Purchase Agreement