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HRA hears introduction for conduit bond refinancing for Twin Cities German Immersion School; public hearing set
Summary
City staff introduced a request for the HRA to issue conduit revenue refunding bonds for Twin Cities German Immersion School to reduce annual debt service; the board will hold a public hearing and both the HRA and city council will consider resolutions next week.
City staff introduced a request Wednesday for the Housing and Redevelopment Authority to issue conduit revenue refunding bonds for the Twin Cities German Immersion School to lower the charter school's annual debt service.
"The HRA and the city take no risk on these," Jenny Wolf of the Department of Planning and Economic Development said in the presentation, explaining that conduit revenue bonds are special limited obligations repayable solely from the borrower’s revenues and that issuing the bonds provides the borrower access to tax-exempt interest rates that reduce borrowing costs.
Wolf said the school, a public charter serving pre-K through eighth grade at its Como Avenue facility, applied to refund 2013 bonds; the proposed bonds would be issued in an amount not to exceed $10,000,000, extend final maturity from the current 2044 date to 2060 and would be sold through a public offering with Piper Sandler as underwriter. Wolf said the underwriter currently anticipates a BBB rating and that the anticipated change in term would reduce the school’s annual debt service by approximately $55,000 under current projections.
School leader Elizabeth Zenfennig, identified in the meeting as the school’s executive director and principal, described the school’s academic record, enrollment of about 545 students and the impact of the projected savings: "The savings ... is about 50,000. ... That's one teacher at my school," she said, noting the money helps preserve instructional positions and materials.
Wolf also explained procedural next steps: PED’s internal credit committee reviewed the proposal to confirm it meets HRA conduit-bond policy; the HRA must authorize the issuance and hold a public hearing, and the city council must affirm the public hearing requirement and consider resolutions next week (the staff presentation said resolutions will be considered Oct. 15). Wolf noted certain borrower compliance requirements are triggered by conduit issuance; because this is a refunding rather than new construction, the only compliance noted was affirmative-action/equal-employment requirements, which the school has met.
No HRA action occurred Wednesday; staff scheduled a public hearing and will return with resolutions for formal consideration by the HRA and the city council.
