1d Issuance of Private Activity Bonds
CITY OF
CHANHASSEN
7700 Market Boulevard
PO Box 147
Chanhassen, MN 55317
Administration
Phone 952.2271100
Fax 952.2271110
Building Inspections
Phone 952.2271180
Fax 952.227.1190
Engineering
Phone 952.2271160
Fax 952.227.1170
Finance
Phone 952.2271140
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Park & Recreation
Phone 952.2271120
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Recreation Center
2310 Coulter Boulevard
Phone 952.227.1400
Fax 952.227.1404
Planning &
Natural Resources
Phone 952.2271130
Fax 952.2271110
Public Works
1591 Park Road
Phone 952.227.1300
Fax 952.227.1310
Senior Center
Phone 952.2271125
Fax 952.227.1110
Web Site
www.ci.chanhassen.mn.us
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MEMORANDUM
TO:
Mayor
City Council
FROM:
Greg Sticha, Finance Director
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DATE:
November 18, 2005
SUBJ:
Issuance of Private Activity Bonds
BACKGROUND
The City has received a request from Chapel Hill Academy to allow them to use
the city's bonding authority to issue approximately $1.5 million in conduit debt.
The City has approximately $1.8 million left under its bank qualification status for
2005, and allowing the academy to issue this debt under the City's EDA bonding
authority has no effect on the City's finances or bonding ability for the rest of the
year in 2005.
The debt is the sole responsibility of the Obligor (Chapel Hill Academy) and the
City will be the issuer but will have no legal obligation to the debt. The funds will
be used to refinance a previous debt at a lower interest rate. The City has allowed
other organizations to use the City's bonding authority to issue debt, including the
Ridgeview Medical Center in 2002. The City will receive a one-half of one
percent fee (about $7,000), to recover any costs associated with this issuance.
RECOMMENDA TION
It is staff's recommendation that City Council approve the attached resolution
authorizing the issuance of a revenue note by the Economic Development
Authority for Chapel Hill Academy not to exceed $1.5 million. The EDA will
hold a public hearing on December 12th and then will consider approving the
issuance of the note following the hearing. Approval of the resolution requires a
simple majority vote of those City Council members present.
The City of Chanhassen . A growing community with clean lakes, quality schools, a charming downtown, thriving businesses, winding trails, and beautiful parks. A great place to live, work, and play.
RESOLUTION NO.
RESOLUTION APPROVING THE ISSUANCE OF A REVENUE NOTE BY
THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF
CHANHASSEN
BE IT RESOLVED, by the City Council (the "Council") of the City of Chanhassen, Minnesota
(the "City"), as follows:
1. Recitals. The Council makes the following recitals of fact:
A. The Council created the Economic Development Authority of the City of
Chanhassen (the "EDA") pursuant to Resolution 97-29 (the "Enabling
Resolution").
B. Section 3.01(a) of the Enabling Resolution provides that the sale of all bonds or
obligations issued by the EDA shall be first approved by the City Council.
C. The EDA has advised the City that:
(i) Chapel Hill Academy, a Minnesota nonprofit corporation and organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended (the "Borrower") desires to undertake the following project:
refinancing the outstanding principal amount of the Chapel Hill Academy,
City of Chanhassen, Minnesota, First Mortgage Bonds, 1999 Series, dated
June 1, 1999, issued by Chapel Hill Academy, a Minnesota nonprofit
corporation, in the original principal amount of $1,620,000 for the purpose
of acquiring a kindergarten through eighth grade school facility, including
a cafeteria and gymnasium, located on approximately 4.8 acres of land at
306 West 78th Street in Chanhassen, Minnesota, and pay costs associated
with the financing (the "Project"); and
(ii) the Borrower has represented to the EDA that the economic feasibility of
the Project will be greatly enhanced through the issuance of revenue
obligations by the EDA under the provisions of Minnesota Statutes
Sections 469.152 through 469.165, as amended in a principal amount not
exceeding $1,500,000 and in one or more series (the "Obligations") to
finance the cost of the Project.
D. The EDA has requested the Council to approve the issuance of the Obligations as
required by the Enabling Resolution.
2. Approval. Issuance of the Obligations by the EDA is approved as required by the
Enabling Resolution
Adopted: November 28, 2005
Attest:
City Manager
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Mayor
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