City Council adopts TEFRA resolution allowing tax-exempt bonds for Imperium’s acquisition of KidsPeace

The City Council on 2026-06-05 approved a TEFRA resolution permitting the Ellsworth portion of Public Finance Authority revenue bonds to finance Imperium’s acquisition of KidsPeace, a step required under federal tax rules to allow the bonds to be issued as tax-exempt.

Ellie Shaiman, general counsel for Imperium, said the financing will cover the cost of the acquisition and related capital expenditures and that “all of the debt service on that financing is being covered by Imperium,” adding that the council’s approval is a narrow procedural requirement under the Internal Revenue Code. Shaiman identified Imperium as the new parent company of KidsPeace effective May 1, 2026.

The resolution on the agenda covered two bond series: a Series 2026 issuance not to exceed $153,823,000 and a Series 2024 issuance not to exceed $18,000,000. Counsel explained to the council that tax-exempt status typically lowers borrowing costs because investors pay less federal income tax on interest; counsel offered a rough illustrative saving tied to corporate tax levels and described the 20% figure as an approximate relative reduction in interest expense compared with taxable financing.

Councilor Halloran asked whether failing to approve the item here would render the bonds non–tax-exempt; counsel replied that the public hearing and the elected representative’s approval are required by Section 147 of the Internal Revenue Code so that the bonds can be treated as tax-exempt in jurisdictions where proceeds are spent. Counsel also explained the financing is multi-jurisdictional and that the Ellsworth hearing covers the portion of proceeds to be spent at the local facility.

Councilor Smith opened the public hearing and invited comments; none were offered in the room. After the hearing closed, a council member moved to adopt the TEFRA resolution approving the Ellsworth portion of the Public Finance Authority Revenue Bonds (Imperium Project Series 2026 and Series 2024) solely for the purposes of satisfying Section 147 and related TEFRA requirements; another council member seconded the motion. The council voted by voice and the presiding officer stated the motion carried.

The council did not record a roll-call tally in the minutes; counsel characterized the approval as narrowly administrative and without financial liability to the city. The special meeting concluded and the council adjourned.

What happens next: the approval satisfies the local procedural requirement under federal tax law so that the issuer can proceed with pricing and closing; the city’s formal role was limited to this informational approval and staff indicated no ongoing fiscal obligation for the municipality.