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<br /> <br />Councilmember Woestehoff asked for confirmation that this is an arrangement that costs the City <br />and tax payers nothing and the City is privy to a half percent fee to cover all administrative costs <br />so the City generates a small amount of revenue directly. <br /> <br />Finance Director Lund replied that is correct. The conduit debt is a pass through that the City is <br />not liable for any of the payments and they will pay a half percent fee. In addition, if the City <br />desires to issue debt anytime in the future for this year until December 31, 2022 if $10 million or <br />under is issued, they will stay bank qualified. PACT will be required to pay the difference in being <br />considered nonbank qualified. She stated that has been written into the agreements. <br /> <br />Councilmember Musgrove asked how long the duration of the payment difference that would be <br />required to be made, it is just within this year for any loans that are done this year or subsequent <br />years. <br /> <br />Finance Director Lund replied it has to be respective to this year. She explained if the City where <br />to issue debt of $10 million or under in 2022 they would be required to pay the difference of the <br />lifespan of the bond. She gave the example of a 20-year bond was taken out, whatever the interest <br />is that charges the City to get a higher amount based off the 20-year issuance, PACT would have <br />to front the difference of the cost. <br /> <br />Councilmember Musgrove stated any debt the City takes on this year for the term of that debt. <br /> <br />Finance Director Lund replied yes as long as it is under $10 million to be considered bank qualified <br />and not incur a higher interest rate. <br /> <br />Citizen Input <br /> <br />There was none. <br /> <br />Motion by Councilmember Specht, seconded by Councilmember Heineman, to close the public <br />hearing. <br /> <br />Motion carried. Voting Yes: Mayor Kuzma, Councilmembers Specht, Heineman, Howell, <br />Musgrove, Riley, and Woestehoff. Voting No: None. <br /> <br />The public hearing was closed at 7:13 p.m. <br /> <br />Council Business <br /> <br />Motion by Councilmember Heineman, seconded by Councilmember Specht, to adopt Resolution <br />#22-141 Authorizing Preliminary Approval of the Issuance and Sale of Charter School Lease <br />School Revenue Refunding Bonds Conduit Debt, PACT Charter School project. <br /> <br />Motion carried. Voting Yes: Mayor Kuzma, Councilmembers Heineman, Specht, Howell, <br />Musgrove, Riley, and Woestehoff. Voting No: None. <br />City Council /June 14, 2022 <br />Page 5 of 17 <br /> <br />