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Elk REQUEST FOR ACTION <br />River <br />To Item Number <br />Ma or & Ci Council 3.3. <br />Agenda Section Meeting Date Prepared by <br />Consent Apri119, 2010 Catherine Mehelich, Director of <br /> Economic Develo ment <br />Item Description Reviewed by <br />Amendment to City's Conduit Bonding Policy Lori ohnson, Ci Administrator <br /> Reviewed by <br />Action Requested <br />Approve amendment to the administrative fee charged in the City's Conduit Bonding Policy. <br />Background/Discussion <br />In August 2001, the City Council adopted a Conduit Bonding Policy that allows a developer or business <br />to borrow larger sums of money at a lower interest rate. The City's role in issuing conduit bonds is <br />minimal. The majority of the work is done by the bond underwriters, who ensure that the project and the <br />use of funds comply with IRS tax code. Developers are responsible for all costs incurred to utilize this <br />financing tool in addition to an administrative fee. <br />Now after having issued a number of conduit bonds in the past several years, staff is recommending an <br />amendment to increase the administrative fee charged from'/z of 1% of the bond request, to a rate of 1% <br />of the bond request. The amendment makes the policy consistent with past practice in more recent years <br />and future intent of the program. <br />Financial Impact <br />The amendment increases the administrative fee paid by developers/businesses to the City to utilize this <br />financing tool. The rate is consistent with other cities. <br />Attachments <br />• City of Elk River Conduit Bonding Policy, Amended Apri12010 <br />Action Motion by Second by Vote <br />Follow Up <br />S:\Communiry Development\Economic Development\Conduit Bonding\Action Requested 4.19.10.doc <br />