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<br /> <br />Item 6.2. <br /> <br />MEMORANDUM <br /> <br />TO: Mayor and City Council <br /> <br />FROM: Lori Johnson, Director of Finance and Administrative Services <br /> <br />DATE: February 22, 2005 <br /> <br />SUBJECT: Public Hearing on a Proposal for Private School Facility for the <br />Church of St. Andrew for the St. Andrew's School <br /> <br />A public hearing has been scheduled for Tuesday to discuss the Church of St. Andrew's <br />request for the city to flllance up to $1.5 million in tax exempt bonds for the flllancing of the <br />non-religious portions of the renovation, equipping of, and construction of additions to the <br />St. Andrew's school. Since the time that the public hearing was scheduled, St. Andrew's has <br />approached staff requesting that the tax exempt fInancing be increased from $1.5 million to <br />$2.5 million. Because the requested increase is in excess of ten percent of the original <br />request, the increase needs Council approval. <br /> <br />As you know, one of the city's main concerns when issuing tax exempt bonds for other <br />entities is making sure the city will still meet the bank qualifIed status by issuing less than ten <br />million dollars in debt. In 2005 the city is issuing several bonds including flllancing for <br />Westbound Liquor, the 2005 Street Rehabilitation Project, and the annual equipment <br />certifIcates. These issues will total less than $3.5 million, leaving room for $6.5 million of <br />additional flllancing under the bank qualifIed limit. Bryan Adams has stated that Elk River <br />Municipal Utilities will not be requesting flllancing for any projects or equipment in 2005. At <br />this time I am not aware of any other improvement projects or development projects that <br />would require city flllancing; therefore, increasing the amount available to St. Andrew's to <br />$2.5 million should not affect the city's bank qualifIed status. However, as in the past, the <br />agreement between the city and the Church of St. Andrew will be written such that if it does, <br />the church will be responsible for the additional interest cost paid by the city because of loss <br />of bank qualifIed status. <br /> <br />If the Council agrees to increase the bond to $2.5 million, the attached resolut.on calling for <br />a new public hearing on the increased amount needs to be approved. Representatives of St. <br />Andrew's have requested that the hearing scheduled for February 22,2005, take place even if <br />the Council agrees to increase the flllancing amount and a second public hearing is called. <br />Mr. Tom Kaempffer, Parish Business Administrator, will be at the public hearing on <br />