EDA Meeting Date: April 28, 2025
To: Members of the Economic Development Authority
From: Ben Martig, City Administrator
Title
Update on Debt Financing for New Ice Arena.
Body
Action Requested:
No action. The EDA shall hear an update from city staff regarding the future ice arena financing structure.
Summary Report:
City Administrator Martig will provide an update on the project at the meeting. Attached is the background information and presentations from the prior meeting. I've also attached an updated project schedule. There may be information that I provide at the meeting based on bids received.
There have been some additional misconceptions made publicly that the project must require a public vote per City Charter. The following is some additional information related to the legal considerations of City Charter provisions and ability to utilize this debt financing mechanism that does not require a public vote as provided by the City legal bond counsel Jenny Boulton transition partner of Kutak Rock LLP:
1. Charter:
The Charter allows the City to issue obligations without an election if permitted by state law. There are numerous exceptions to the election requirement throughout state law, not all of which are enumerated in MN Stat, Sec 475.58.
2. City Lease:
The City will not issue bonds or any other obligations under the proposed financing structure. Instead, the City will enter into a lease under which it will pay rent for the ice arena. The City is authorized by MN Stat, Sec 465.71 to acquire real and personal property under lease-purchase agreements and to enter into such an agreement with the EDA. MN Stat, Sec 465.71 permits entering into a lease with option to purchase without an election. The lease will allow the City to terminate the lease in any year if the City were to decide not to appropriate funds for rent payments in the annual budget. Because of the right to non-appropriate in any year, the lease is not an "obligation" as defined ...
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