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Page 1 of 4 <br /> Bryan Adams <br /> From: "Joseph Steffel" <Joseph.Steffel @ci.buffalo.mn.us> <br /> To: "Sue Guenther" <sueg @mmua.org>; <mnitchals @wmu.willmar.mn.us>; <acrowser @rea- <br /> alp.com>; <dvoss@ci.anoka.mn.us>; <JerryM @austinutilities.com>; <theoldsalt29 @msn.com>; <br /> <donk@utplus.com>; <cpunt @lakesnet.net>; <dboyce@ci.east-grand-forks.mn.us>; <br /> <bryada @nsatel.net>; <rarndt @cityofluverne.org>; <stevej @marshallmn.com>; <br /> <ajs @mcgrannshea.com>; <bschwandt @mpsutility.com>; <billr @mrenergy.com>; <br /> <mrgsimon @mrenergy.com>; <tomh @mrenergy.com>; <nashwauk @uslink.net>; <br /> <fnagle @prestommn.org>; <Ikoshire @rpu.org>; <Iw.johnston @smmpa.org>; <br /> <ra.hayward @smmpa.org>; <arude @citytrf.net>; "Worthington-Don Habicht" <br /> <dhabicht @worthingtonpublicutilities.com>; "Andy Brewer" <abrewer @mmua.org>; "CMMPA Lori <br /> Frisk-Thompson (E-mail)"<lorift@utplus.com>; "Greg Oxley"<gtoxley @mmua.org>; "Jack Kegel" <br /> <jkegel @mmua.org>; "Marshall-Brad Roos" <bradr @marshallmn.com>; "NMPA-Darryl Tveitbakk" <br /> <nmpadt @mncable.net>; "Shakopee-LouVanHout(E-mail)"<Ivanhout@shakopeeutilities.com>; <br /> "Steve Downer"<sdowner @mmua.org>; 'Truman-Bob Grefe (E-mail" <br /> <trumanpu @myclearwave.net> <br /> Sent: Wednesday, November 26, 2003 11:24 AM <br /> Subject: RE: CONFERENCE CALL TOMORROW-Rochester comments Larry K <br /> Posted on Tue, Nov. 25, 2003 PIONEER PRES <br /> Cities considering complex lease deals <br /> BY PATRICK SWEENEY <br /> Pioneer Press <br /> Since early summer, about a dozen Minnesota cities, including St. Paul, have been <br /> considering a New York investment firm's pitch: Lease public sewer systems to private companies that <br /> will use the systems for tax deductions, and get significant payments up front. <br /> The proposal, which could yield about $30 million for St. Paul, is attractive to cash-strapped cities. <br /> Burnsville, Rochester, Eagan and Duluth are considering it as well, and other public-private infrastructure <br /> deals have surfaced elsewhere in the country. <br /> But a U.S. senator from Iowa recently assailed the lease arrangement as "good, old-fashioned tax fraud," <br /> and some Minnesota officials are raising questions about it as well. <br /> The complicated financing plan calls for cities to lease the systems to private companies, then <br /> immediately lease them back and continue operating them as the cities always have. <br /> It would not be out-sourcing, selling or privatizing sewer services. Instead, it would be purely a paper <br /> transaction constructed to allow tax deductions for depreciation to flow to the businesses leasing the <br /> sewers. <br /> "We're looking at it," St. Paul Mayor Randy Kelly said of the proposals. "It could be an opportunity for the <br /> city." <br /> At one point, Kelly and other supporters of building a new Minnesota Twins stadium in St. Paul <br /> considered the sewer lease as a possible component of the funding; he now says that is unlikely. <br /> Kelly stressed that city administrators have barely begun to investigate a lease of the sewers and that <br /> any final deal is far off. "Clearly, I want to look at the risk to the city and the taxpayers," Kelly said. <br /> St. Paul has some history, not all of it favorable, with similar arrangements. <br /> 11/26/03 <br />