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062308 EDA MinCITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD ECONOMIC DEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS MONDAY, JUNE 23, 2008 7:00 P.M. MINUTES I. CONVENE ECONOMIC DEVELOPMENT AUTHORITY MEETING President Lizee called the meeting to order at 7:05 P.M. A. Roll Call Present: President Lizee; Boardmembers Bailey, Turgeon, Wellens, and Woodruff; Executive Director Brown; Assistant Executive Director Nielsen; Assistant Treasurer Burton; and Attorney Keane Absent: None B. Review Agenda Woodruff moved, Wellens seconded, Approving the agenda as presented. Motion passed 5/0. 2. APPROVAL OF MINUTES A. EDA Minutes of July 23, 2007 Turgeon moved, Wellens seconded, Approving the EDA Meeting Minutes of July 23, 2007, as presented. Motion passed 4/0/1 with Bailey abstaining due to his absence at the meeting. 3. CONSENT President Lizee reviewed the items on the consent agenda. Woodruff moved, Wellens seconded, Approving the Motions Contained on the Consent Agenda. A. Approval of the Verified Claims List Motion passed 5/0. 4. NEW BUSINESS A. Selection of Officers Wellens moved, Woodruff seconded, approving the Economic Development Authority Officer appointments of Christine Lizee as President, Laura Turgeon as Vice-President, Richard Woodruff as Treasurer, Bonnie Burton as Assistant Treasurer, Lawrence Brown as Secretary and Executive Director, Brad Nielsen as Assistant Executive Director, and leaving the position of President Pro Tem vacant. Motion passed 5/0. CITY OF SHORE~VOOD ECONOMIC DEVELOPMENT AUTHORITY MEE'T'ING June 23, 2008 Page 2 of 3 B. Report on Offering of Financing for City Hall Facilities Director Burton stated at the May 12, 2008, City Council work session the City's bond consultant Paul Donna, Senior Vice President for Northland Securities, h1c., discussed the debt financing options available for the City Hall Building Remodeling Project. At that time Council directed Mr. Donna to prepare documents to authorize the City and the Shorewood Economic Development Authority (EDA) to move forward with the sale of lease revenue bonds by the EDA for the project for anot-to-exceed amount of $1,400,000. She stated Mr. Donna was present this evening to review the finance plan summary (prepared by Northland Securities) and the EDA bond resolution authorizing the issuance of the bonds (prepared by the City's bond attorney). Mr. Donna explained under the proposed financing structure the EDA would own the facility (i.e.; the City Hall building) and it would lease the facility back to the City for its use. The structure is very similar to the structure in place for the Public Safety Facilities. The EDA will issue the bonds; using the EDA as the conduit will exempt the debt service payment from the City's levy limit. The amount of the debt will count against the City's debt limit; the City is well within the range of its debt limit considerations. The process to issue the bonds includes adopting a resolution this evening authoring the EDA to move forward with the sale of the bonds; the City will have to adopt a similar resolution. The EDA and City will have to adopt another resolution specifying the terms of the bonds before the bonds will be issued. Mr. Donna stated between now and when the actual issuance of the bonds is approved, the City will be able to decrease the not-to-exceed amount of $1,400,000 to more accurately reflect the bid amount accepted to do the renovation. He explained if the City issued bonds for $1.,400,000, there would be approximately $1,337,950 of the funds available for the renovation. Mr. Donna stated the 20-year debt service schedule included in the finance plan summary was prepared a few weeks ago. The rates would be a little aggressive if the bonds were sold today based on the market rates. Mr. Donna explained the terms of the bond will include an early prepayment (call) feature which will allow the City and EDA to prepay the bonds. It is safe to say the call feature would be seven to ten years out. A credit rating will be applied for on the bonds because it is cost effective to do so. The City's general obligation (GO) debt is currently rated Aa3 by Moody's Investors Service. Lease obligation bonds are generally rated one notch lower than the GO rating if tl~e facility being leased is considered an essential purpose. He expected the lease obligation bonds would be rate at an A1. Mr. Donna stated the pricing of the bonds will be done to coincide with the last City Council regular meeting date of July 28, 2008, during which the finalizing resolution will be adopted. A closing date of mid-August is anticipated. Mayor Lizee thanked Mr. Donna, Northland Securities and Director Burton for their efforts. She stated Northland Securities had served the community well when it assisted with the debt financing for the Public Safety Facilities and the City. In response to a question from Councilmember Wellens, Mr. Donna clarified the prepayment option allowed the City and EDA to prepay the bonds starting December 1, 2015 without a prepayment penalty. CITY OF SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY MEETING Jnne 23, 2008 Page 3 of 3 C. Resolution Providing for the Issuance and Sale of Public Project Lease Revenue Bonds, Series 2008A Woodruff moved, Turgeon seconded, Adopting RESOLUTION NO. 08-001, "A Resolution Providing for the Issuance and Sale of Public Project Lease Revenue Bonds, Series 2008A (City of Shorewood, Minnesota Lease Obligation)" as amended in 1. (c), change "in the approximate amount of" to "a maximum principal amount of '. Motion passed 5/0. 5. OTHER BUSINESS Councilmember Woodruff stated Director Burton informed him that a Treasurer's report will be given at the EDA Organizational meeting scheduled for July 28, 2008. He recommended an investment policy be adopted for the EDA; the EDA could adopt the City's investment policy by reference. 6. ADJOURN Wellens moved, Woodruff seconded, Adjourning the Shorewood Economic Development Authority Meeting of June 23, 2008, at 7:22 P.M. Motion passed 5/0. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder . ~,t 1 &,~'. ~ Christine Lizee, President ATTEST: __~``~ wrence A. Brown, Executive Director