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�i <br /> EOty lk Request for Action <br /> River <br /> To Item Number <br /> Mayor and City Council 9.4 <br /> Agenda Section Meeting Date Prepared by <br /> Worksession June 15, 2015 Tim Simon, Finance Director <br /> Item Description Reviewed by <br /> Conduit Bonding Update Cal Portner, City Administrator <br /> Reviewed by <br /> Action Requested <br /> No action requested, just background information provided on conduit financing. <br /> Background/Discussion <br /> A municipal issuance of conduit bonds is a common financing mechanism that allows the use of the tax- <br /> exempt financing. By using the municipality's ability to issue conduit bonds, the applicant can sell tax <br /> exempt bonds rather than taxable bonds to save interest costs. <br /> On an annual basis, the city is granted a bank-qualified exemption to issue tax-exempt bonds in the <br /> amount of no greater than $10 million. Any amount over$10 million would be taxable. <br /> While the city does not guarantee or is liable for conduit bonds, they do count against the city's $10 <br /> million annual tax-exemption. So when we get these applications the city and ERMU determines whether <br /> it will affect our ability to issue tax-exempt bonds in the same calendar year. <br /> We anticipate an application coming shortly and just wanted to provide Council some background on <br /> conduit financing. <br /> Financial Impact <br /> No financial impact since all conduit bonds would not be secured by a general obligation pledge and the <br /> City/HRA/EDA would not be responsible or liable for debt service payments. All costs and fees are <br /> paid for by the applicant in the cost of issuance. <br /> Attachments <br /> ■ Conduit Bonding Policy <br /> P0WInII a <br /> Template Updated 4/14 [NATUREJ <br />