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<br />I <br /> <br />I <br /> <br />I <br /> <br />COUNCIL PROCEEDINGS <br /> <br />CITY OF NEW BRIGHTON <br /> <br />Pursuant to notice thereof, a continued meeting of the New Brighton City Council was held Wednesday, <br />October 28, 1992, at 6:45 p,m. in the municipal building, 803 Fifth Avenue NW, <br /> <br />Present: <br /> <br />Mayor Benke, Councilmembers Gunderman, Larson, Rebelein and Williams. <br /> <br />Absent: None <br /> <br />Also Present: David Childs, City Manager <br />Margaret Egan, Finance Director <br />Kevin Locke, Community Development Director <br />Steve Bubul, City Attorney Representative <br /> <br />Council Business Council Business <br /> <br />City Manager David Childs said that staff had met with Steve Bubul, <br />Holmes and Graven, to discuss the options available for the bond sale, <br /> <br />Mr, Bubul explained that a problem arose from a technical advisory <br />memorandum issued by the Internal Revenue Service (IRS). The <br />memorandum does not currently affect New Brighton, but it does affect <br />Tax Increment projects and bonds which have similarities to the bonds the <br />City is currently in the process of refunding, <br /> <br />The bonds were originally sold in 1985 and refunded in 1986, They were <br />bonds issued as tax exempt tax increment, The bonds were to be repaid <br />through tax increment, Prior to 1986, tax increment bonds were not <br />considered a private security by bond counsels, It was acceptable to <br />require development contracts and assessment agreements and the tax <br />increment bonds would still be tax exempt. <br /> <br />The IRS memo states that a development contract which requires payment <br />of property taxes would make the bonds taxable, The City is in the process <br />of refunding bonds which have these types of contracts, <br /> <br />Holmes and Graven have concluded that nothing can be done about existing <br />bonds which may become taxable, but the City does have the power to <br />decide what can be done as bonds are refunded and new bonds issued, <br /> <br />Holmes and Graven proposes the elimination of assessment agreements and <br />development contracts (with the exception of contracts which cover tax <br />increment up to 25% of the debt services secured by private payment) <br />because that was the law when the bonds were originally issued, It is <br />proposed that agreements for District 8 and possibly District 9 be kept in <br />effect because they would be within that 25% limit. <br /> <br />Bond Sale <br />Resolution 92-119 <br />