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City of <br /> Elk - Request for Action <br /> River O. <br /> To Item Number <br /> Mayor and Council 9.1 <br /> Agenda Section Meeting Date Prepared by <br /> Work Session March 17, 2014 Tim Simon, Finance Director <br /> Item Description Reviewed by <br /> Host Approval Request—Spectrum School Project Cal Portner, City Administrator <br /> Reviewed by <br /> Action Requested <br /> Consider Spectrum School's request for host approval for issuance of charter school lease revenue bonds. <br /> Background/Discussion <br /> Spectrum School currently owns a building at 17796 Industrial Circle NW. In 2012, the city hosted a <br /> public hearing for the issuance of charter school lease revenue bonds issued by Anoka County. The <br /> school proposes to purchase some of the units at 11044 Industrial Cir. NW and asked the city to again <br /> host a public hearing. Anoka County has preliminarily indicated they would again issue the bonds. <br /> Per state and federal law, the governmental entity with jurisdiction over the project site must hold a <br /> public hearing and give approval for the issuance of the bonds even if the bonds are issued by another <br /> issuer (Anoka County). The city, county,and state meet the host jurisdiction requirement. Holding a <br /> public hearing as a host assumes no risk to the city with regard to the bonds or the bonding process. <br /> Since Elk River Municipal Utilities recently refunded bonds tax exempt and we plan to issue bonds for <br /> our wastewater plant expansion we are not able to issue the amount of conduit bonds needed without <br /> exceeding our$10 million bank-qualified limit. Therefore,they are working with Anoka County to issue <br /> the bonds tax exempt as they did in 2012. <br /> School officials will be in attendance to answer any questions. <br /> Financial Impact <br /> In 2012,when the Council agreed to provide host approval, Spectrum agreed to a Payment In Lieu of Fee <br /> (PILOF). The PILOF was based on four years of city taxes since the building they were issuing the <br /> bonds for would become tax exempt upon purchase. <br /> Spectrum has indicated interest in another PILOF agreement as in 2012. Staff worked with the county <br /> assessor to determine appropriate city taxes on the units they plan to acquire. Based on the current value, <br /> taxes would be $8,603.61 per year or$34,414.44 over four years. The county assessor also provided an <br /> estimate based on a low-grade office on typical flex buildings,which would be $14,010.80 per year or <br /> $56,043.20 for four years. <br /> Attachments <br /> ■ None <br /> P a w E A E U a r <br /> NaA f RE] <br />