EDA Meeting Date: April 22, 2024
To: Members of the Economic Development Authority
From: Ben Martig, City Administrator
Nate Carlson, Economic Development Coordinator
Title
Conduit Debt Financing Informational Presentation
Body
Action Requested:
None.
Summary Report:
In the State of Minnesota, Economic Development Authorities (EDA) and Housing and Redevelopment Authorities have the statutory authority to issue debt in order to finance construction of buildings/real property that has a public purpose.
According to Minnesota State Statue 469.152 - 469.1651 Ch. 462C, conduit bonds are initiated by and issued for the benefit of private or public entities by a City or statutory authority, such as an EDA. The proceeds are directed to the private/public entity, and the private/public entity repays the principal and interest payments on the bonds. The EDA does not pay any debt service or any costs related to the transaction.
In anticipation of using this tool to facilitate City-led building projects that have a public purpose, such as a new ice arena or a new liquor store, City staff will provide a brief introduction to the financing mechanism and how the City Council may be requesting it’s use through the EDA. The EDA’s role would only be to assist in providing the financing tool.
The attached memo from the City’s Financial Advisor, Nick Anhut of Ehlers, provides greater detail.
Alternative Options:
No alternative options at this time.
Financial Impacts:
None at this time.
Tentative Timelines:
To be determined.