Memorandum

City of Lawrence

City Manager’s Office

TO:	David L. Corliss, City Manager
FROM:	Diane Stoddard, Assistant City Manager
DATE:	August 19, 2013
CC:	Cynthia Wagner, Assistant City Manager Britt Crum-Cano, Economic Development Coordinator
RE:	Bond Ordinance for Neuvant House Project Industrial Revenue Bond Issuance

Please place the following on the consent agenda for the August 27, 2013 City Commission meeting:

Adopt on first reading, Ordinance No. 8901, authorizing the issuance of up to $2.5 million in industrial revenue bonds (IRBs) and authorizing the Mayor to execute the necessary bond documents for the Neuvant House Project.

Background:

On May 28, 2013, the City Commission approved a Resolution of Intent to issue Industrial Revenue Bonds (IRBs) for the Neuvant House project. The next step in the process is the authorization of the issuance of the bonds. This is accomplished with the bond ordinance. Additionally, the Mayor will need to sign various bond documents for the bond closing, anticipated in mid-September. The ordinance also authorizes the Mayor to sign these documents.

As a reminder, IRBs are a form of conduit financing and Neuvant House will be entirely responsible for the principal and interest payments on the bonds. The City is in no way obligated for this debt service. In this case, Neuvant House is utilizing this mechanism to access a project exemption certificate, which will enable the project’s construction materials to be exempt from sales tax. The estimated range of savings to the project will be around $50,000-$90,000, depending upon the actual cost of construction materials.

Requested Action: