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HomeMy WebLinkAboutCity Council - 05/15/2007 - HRA APPROVED MINUTES HOUSING AND REDEVELOPMENT AUTHORITY TUESDAY, MAY 15, 2007 7:00 PM, CITY CENTER Council Chamber 8080 Mitchell Road HOUSING AND REDEVELOPMENT AUTHORITY MEMBERS: Chair Phil Young, Council Members Brad Aho, Sherry Butcher, Jon Duckstad and Kathy Nelson CITY STAFF: City Manager Scott Neal, Public Works Director Eugene Dietz, City Planner Michael Franzen, Community Development Director Janet Jeremiah, City Attorney Ric Rosow, Finance Director Sue Kotchevar and Recorder Jan Curielli I. ROLL CALL/CALL THE MEETING TO ORDER Young called the meeting to order at 7:05 p.m. in shared session with the Council meeting. II. APPROVE MINUTES OF HRA MEETING HELD ON APRIL 17, 2007 MOTION: Duckstad moved, seconded by Nelson, to approve the minutes of the HRA meeting held on April 17, 2007 as published. Motion carried 5-0. III. RESOLUTION HRA 2007-02 RELATING TO $1,660,000 PUBLIC FACILITY LEASE REVENUE BONDS, SERIES 2007a; AUTHORIZING ISSUANCE, AWARDING SALE AND PRESCRIBING THE FORM THEREOF AND AUTHORIZING EXECUTION OF A TRUST INDENTURE AND A LEASE- PURCHASE AGREEMENT Neal said this is a resolution authorizing the issuance of$1,660,000 in public facility lease revenue bonds Series 2007a, the proceeds of which will be used to finance part of the Community Center, specifically the ice arena bonds. He said the bonds will be supported by ice arena revenues. Paul Donna, of Northland Securities, distributed a tabulation of the bids received for the bond issue and reviewed the rating process for the bonds. He noted they were disappointed to receive only two bids; however, the results were very close to the estimates for the financing, and there was a lot of competition this week including the Hennepin County sales tax bonds for the stadium. He said the D.A. Davidson bid was 4.37% fixed rate and included a premium bid by them that was used to reduce the total borrowing to $1,630,000. The City received an AA1 credit rating for these bonds because of the nature of financing and an assessment of the overall essential nature of the asset being financed. He said this compares favorably with the AAA rating for the City's General Obligation bonds, and the difference between the two ratings is negligible in terms of interest rates. Duckstad asked Mr. Donna to explain the term"nature of the financing." Donna said, when a rating agency evaluates the credit worthiness of a community, they look at the overall economics and demographics of the community, the overall financial situation and the overall management. A lease purchase financing contains an additional element of risk since it certifies on an annual basis the lease payment to make the debt service payment CITY COUNCIL MINUTES May 1, 2007 Page 2 rather than having a certified debt levy over a period of 20 years. Duckstad asked why there were only two bids. Donna said they checked to see why there were no more bids. One of the companies they called said they did not bid because it was a relatively small issue,because of all the competition on the bond market this week, and because of competition from one particular bidder. Another firm said they did not have time to work up a bid. Rosow pointed out that the lease agreement attached to the Resolution on Exhibit B describes the project as 100 feet by 200 feet, and it should be described as 100 feet by 300 feet. He said that change will be made on this document and on the documents to be approved by the Council. MOTION: Duckstad moved, seconded by Butcher, to adopt Resolution HRA 2007-02 Authorizing the Issuance of$1,660,000 Public Facility Lease Revenue Bonds; Authorizing the Issuance, Awarding the Sale, and Prescribing the Form Thereof and Authorizing the Execution of a Trust Indenture and a Lease-Purchase Agreement. AMENDMENT TO THE MOTION: Duckstad moved, seconded by Butcher, to amend the motion to $1,630,000. Motion carried 5-0. VOTE ON THE MOTION AS AMENDED: Motion carried 5-0. IV. ADJOURNMENT MOTION: Duckstad moved, seconded by Aho, to adjourn the meeting. Motion carried 5-0. Chair Young adjourned the meeting at 7:15 p.m.