Please. Julie. Joe. Here. Kim. Naker. Here. Prabotsky. Here. Yang? Here. There are five present. Oh, I'm sorry. Chair check. Here. There are five present and two absent those being commissioners Bowie and Kim. Kim will be joining us shortly, and commissioner Bowie is excused. Item number one for discussion is resolution r e s 25 dash one two seven five. Approval and authorization of the settlement agreement and release of all claims with Ray Collins and Carolyn j Collins in Ward 1,
District 8. Alright. So I know that this is a discussion item. I'll hand it over to director Newton. It's my understanding that, council member Bui is aware of this item, and so happy to see that she is the sponsor. Handing it over to director Newton. Actually, let me see. I think we chair, we asked you if you could be the sponsor because council member Bui wasn't here. But so I don't know if that makes a big difference. And you had said you would. Yeah. It's just her name is listed there. Oh, okay. Well Yeah. So I'm assuming that she she decided to do that. We'll figure that out. We'll figure that out. Thank you, Chair Johnson, commissioners.
This is a settlement item, which we don't have often and we don't like to have, but occasionally, things don't go the way that we we like. And so we have have things we have to deal with. This is a rehab project. The property owners at this property, 568, Igho Hart, received a forgivable loan in the amount of $33,230 under the rehab program that we have, for to hire a contractor to perform rehab work at their home. Loan funds were dispersed by PED to a contractor to perform that work. During the course of the rehab work, it was determined that the work being performed was not satisfactory and,
in part, outside the scope of work of the the contract and the permits and the guidelines. Also, deficiencies were confirmed by the third party construction consultant we retained to inspect that project. Based on all of these facts, and it's been carefully reviewed, the homeowner and the HRA seek to enter into a settlement agreement and release of all claims. This agreement will result in a discharge of the original loan, providing the homeowners with funds sufficient to engage a new contractor to correct the deficient work, which is $86,372 based on multiple bids,
and will release all claims between the HRA, the City of St. Paul, and the homeowners. The settlement agreement again and release of all claims will provide the funds necessary for the homeowners to be put in a position they would have reasonably expect to be in if the work had been completed satisfactorily. So, while enforcement, enforceability of this agreement is not dependent on the homeowner using the funds for this purpose, it is understood by the parties that upon execution of the agreement, neither the city nor their HRA have any responsibility to the owner to ensure that corrective work is performed. It's also understood by the parties that in no event shall the HRA or the
City have any any obligation to issue any additional compensation beyond the amount of the funds provided. Settlement will be funded with HRA general fund, and staff recommend approval of the item. Okay. So we I know we received as well, I believe, an email about this is and so I'm hoping that commissioners had a chance to review that. Are there any questions for Director Newton at this time? All right. Seeing none, I'll take a motion for Commissioner Provatsky to approve. All those in favor? Aye. All opposed? Six in favor, zero opposed. The resolution is adopted. Item number two,
staff report SR 20 Five-one59, introduction to conduit bond project for Nova Glasgow Academy. Okay. And the two staff reports that we have, again this week are to bring forward this item, both items for next week, something that I've kind of pre prefaced to commissioners as well about just, both, conduit revenue bond requests from these two charters. So I'll hand it over to Director Newton. And welcome up, Ms. Wolf. Thank you, Chair Johnson, commissioners. Debt manager Ginny Wolf is here for these two introductory presentations. You don't need action this week. They'll be back for your action at a future meeting.
Next meeting. Go ahead, Jenny. Welcome, Ms. Wolf. Good afternoon, Chair Johnson and commissioners. Jenny Wolf with PED. Great. Well, I'll I'll dig in. There we go. There we go. Alright. So this is an introduction, to a request for the HRE to issue conduit revenue bonds for NOVA Classical Academy. To start, I wanna quickly cover an overview of conduit revenue bonds as I've discussed in prior presentations. Conduit revenue bonds are special limited revenue obligations of the governmental issuer, in this case, the HRA, and provide tax exempt interest rates for the borrower,
in this case, Nova Classical Academy. Access to the tax exempt interest rates reduces the cost of the debt for the borrower. HRA issued conduit revenue bonds are repayable solely from the revenues of the borrower and are and not of the governmental issuer and the bonds are not secured by any revenues or taxing powers of the government and the HRA and the City undertake no risk by issuing the bonds. The conduit borrower secure secures loan funds either through a private lender or a bond
underwriter, which is the case for NOVA. A bond underwriter is involved. The HRA serves only as a conduit in order for the borrower to access the tax exempt interest rates. And, therefore, all due diligence into the project and the borrower and the entities involved is completed by the private lender or bond underwriter. The conduit revenue bonds are issued by the HRA for nonprofit organizations tax exempt under the IRS, and there is no limit on the amount the HRA can issue. And in the absence of the borrower's access to a governmental issuer,
they would need to pursue taxable bonds or loans, increasing the cost of the debt to the borrower. Now on to the specifics of this request. Nova Classical Academy is a Minnesota public charter school located at 1455 Victoria Way and serves students in grades kindergarten through grade 12 with a current enrollment of ten sixty two students. The school is located adjacent to Victoria Park and the Shalom Senior Living Complex as shown on this map. HRA previously issued conduit revenue bonds for the school in 2011,
which issuance financed their facility in their current location. In 2016, we issued additional conduit revenue bonds, a portion of which were used to acquire the property immediately adjacent to their school facility. And lastly, we issued conduit revenue bonds in 2021 to refinance a portion of the prior bonds. The outstanding balance as of September 1 for the prior bonds is just shy of $20,000,000 NOVA has applied to the HRA to issue up to 25,000,000 in conduit revenue bonds to,
one, refinance a portion of the prior bonds and two, finance an expansion of their school with new construction of an another building on the property that was previously acquired. This this, picture here is a schematic of this of the plan. The new two story building will consist of approximately 28,000 square feet and will be connected to the existing building via Skyway. The new building will primarily include a storm shelter, locker rooms, office space, meeting space, and flexible classroom space.
The proposed project requires an amendment to the Victoria Park master plan and six variances. The school presented their request to the zoning committee on July 31 and the zoning committee approved each. The next step will be for the request to be presented to the planning commission and, if approved, onto the city council for consideration. The bonds will be issued in an amount not to exceed 25,000,000 and will be sold as a public offering with Piper Sandler serving as the underwriter. The bonds will be sold in minimum bond denominations consistent with PED's conduit bond policy,
which will depend on the credit rating. And with an expected credit rating of BB plus would be 25,000. The minimum bond denomination requires that not that none of the individual bonds may be held in a principal amount below $25,000 the total estimated cost of the project is 25,330,000 and includes a contribution from the school of 4,025,000. Here is the proposed sources and uses for the project, which will continue to change until an actual closing and shows a total principal amount
of bonds issued of $21,305,000 with a total deposit to the project fund for the expansion of $13,300,000 PED's internal credit committee reviewed the bond issuance proposal on August 5. The credit committee's review is solely to confirm the proposal meets our internal policies relating to conduit revenue bonds. The credit committee is not reviewing the repayment plan or indicating any opinion of the quality of the credit. The internal policies relate to payment of fees and the sale and placement requirements for
HRA issued conduit revenue bonds. The credit committee confirmed the payment of fees and the sale requirements, including required minimum bond denominations. The HRA is currently collecting fee revenue from the prior bonds we issued. The fees yet to be collected in twenty five twenty twenty five total $42,687 And the HRA will also collect a closing fee on the new issuance equal to one quarter of 1% of the amount issued, which is estimated to total $53,262.50
for the 21,305,000.000 shown on the prior slide. And again, the bonds I don't I don't want can't say this enough. The bonds are repayable solely from revenues of the borrower and are not secured by any revenues or taxing powers of the city or the HRA. And the HRA receives fees when we issue conduit revenue bonds. Governmental approvals. The HRA board is required to authorize the issuance of the bonds, which will include a public hearing. The city council is also required to approve the issuance of the bonds and affirm
the public hearing requirements as the elected representative of the governmental unit. Resolutions will be considered by both bodies in one week on August 20, and NOVA anticipates closing on the financing in the October. Just as a quick reminder that when we issue the project. The compliance compliance includes affirmative action, prevailing wages, and vendor outreach program. This ends my portion of the presentation. And unless there are questions for me, I would like to invite doctor Brett Wedland up to address the board. Doctor Wedland is the school's executive director.
Are there any questions for miss Wolf at this time? Okay. Seeing none, I'll welcome, doctor Woodland. Hello. Good afternoon. Good afternoon. Good afternoon. I'm Brett Wedland. For the last seven years, I've had the privilege of being the executive director at Nova Classical Academy. I won't give you the full sales pitch that we give to our community here. I'll save you some of that. But I do just have a couple of thoughts I'd like to share with you and a couple items I'd like to highlight with you. Nova has been located in Saint Paul for over twenty years. We've been on our current site since 2012. In 2016, we bought an adjacent vacant parcel of land.
And since that time, there's been a lot of conversation in our school community about what to do with that. We have a very strong wait list that's currently about 1,500 students. And so there's kind of been in the last ten years or so two schools of thought. One is essentially create a new school on the adjacent parcel of land similar to what we have now, and utilize that waitlist. And the other school of thought has been use that to better serve the students we currently have. And over the last handful of years, we've, moved to that second approach of looking to utilize that land to better serve our
current student body. We're essentially within 10 students of full what we would consider full capacity right now. And so, we're looking at this project as an opportunity to better meet the needs of our current students and families. And there's a couple areas where we really think that's gonna happen. The first is in student safety. This project includes a storm shelter. It includes moving parking off of the street, where it currently is to a parking lot on the parcel for bussing. So students aren't crossing streets after getting off, off the bus, and getting them away from from that traffic flow,
making it a more, pedestrian friendly area at the end and beginning of the day as well. It also includes some renovations to the interior of our building to widen some hallways and places where there's just overcrowding right now. So that's the first thing is safety. And then the second thing is just it adds in 10 or 11 small spaces to better serve the needs of our unique lead learners right now. When NOVA was built, it was built for what the school could afford at the time. And a lot of the, supplemental services were not really factored into the,
original, building. And so as the population of of students with special needs has grown at our school, more than doubling in the last five years, Those are needs that, you know, we feel, obligated to meet for our student body. So, really, we're we're looking at this as a unique opportunity to do something to enhance the services we're currently providing to our students, and, you know, not drastically change, the scope of of who we're serving, but to to better serve those that are currently coming through our doors. So, like I said, I won't give you the full version,
but that's that's kind of the highlights of what we're looking to do with this project. I can certainly, take any questions you have. But otherwise, I'd like to thank you for your time and consideration today. Thank you, doctor. Woodland, for being here as well and just kind of talking a little bit further about, the vision that you all have around expanding your facility and just better serving your students in our city. I do appreciate you taking the time today to come out to our beautiful HRA meeting. I know it's so important. And you can be you wouldn't want to be anywhere else but here on Wednesday. And so we do appreciate you coming in to add some further context.
Did I see Commissioner Verbovsky's hand? There seems to be a question. Yeah. Thanks, Chair Johnson. I am only aware of NOVA because I know multiple folks who send their kids there, but it's not super close to my award. So I'm curious. What's your sort of student mix in terms of, like, folks from Saint Paul versus calling from across the region versus, you know, just even don't have it doesn't have to be insanely specific. What's, like, the general breakdown? Yeah. So so we draw from a wide range as far North as Ham Lake as far South as Hastings. About 50% come from St. Paul.
The biggest population of that would come from Ward 2 And 3. And then of those not from St. Paul, the largest chunks come from West St. Paul, Mendota, South Minneapolis, just those areas, pretty adjacent. But we do have, you know, 20% of our families or so that are coming from a more significant distance. As far as demographic makeup, our demographics don't mirror, the Saint Paul Public School demographics, but they mirror pretty closely the the demographics of the city. Thank you, Doctor. Wedland. All right. Any other questions? Commissioner Yang. Thanks,
Chair Johnson. I appreciate the information that you shared and was just wondering, like I know you mentioned the improvements that you're making is for your current student body size. Do you have plans to increase your, like, student body size at all, maybe like after the project is complete or even during the project? Yeah. So if you'd asked this prior to the pandemic, I think the answer would have been different. Coming out of the pandemic, we went into a strategic plan and really looked at the long term future of the school. And we really feel that we are at the biggest size we can be and
protect our classical education model drives everything we do and we feel like if we were to expand enrollment whether that's on our current site or a different site we feel like our model would really be threatened. So we really look at, like we're at $10.62 today, $10.7 is a number we're comfortable with and anything beyond that is something that we just we don't see it in our future. Yeah. Thank you so much for that. That's helpful to just kind of know the size and the expansions. I appreciate the question, Commissioner Ying. Are there any other questions for for, Doctor. Dwitland? Okay.
Seeing none, I just want to say thank you again to come out and also be able to add this further context as we are deciding. Again, we won't take the action today, but, we'll have, the action next week on the agenda as well. So you're welcome to come back. You don't have to come back, but you're welcome to come back. We'll be here. All right. Thank you. No problem. Item number three is staff report SR twenty five-one hundred and sixty, introduction to conduent bonds refinancing for Twin Cities Academy. All right. So this is a follow-up. This one is in Ward 7. So I'll hand this over to Director Newton and back over to Ms.
Wolf as I'm assuming it'll be similar, but she'll talk a little bit specific about how this differs from the previous request. Thank you, Chair Johnson and commissioners. I'll just let Jenny go ahead and jump in. I'm back. Good afternoon, chair Johnson and commissioners. Jenny Wolf with PED. This is an introduction to a request for the HRA to issue conduit revenue refinancing bonds for Twin Cities Academy. I'm gonna skip over my intro or revisit slides, and go right into the project itself. Twin Cities Academy is a Minnesota public charter school located at 690 Birmingham Street,
as shown on the map, and serves students in grades six through 12 with a current enrollment of 540 students. Sorry. I don't know what that was. Day three previously issued conduit revenue bonds for the school in 2015, which issuance financed current location. The current outstanding balance for the prior bonds is just shy of $14,000,000 Prior to 2015, the school operated two separate charter schools in separate buildings with their middle school for grades six through eight in operation since 1999 and their high school with grades nine
through 12 in operation since 02/2006. As of 07/01/2016, with the completion of the new facilities, the schools merged into one charter school. Twin Cities Academy has applied to the HRA, to issue up to 15,000,000 in conduit revenue bonds to refinance the prior bonds issued in 2015. The refinancing will reduce annual bond payments through an extension of the final maturity date. The bonds will be issued in an amount not to exceed $15,000,000 and will be sold as a public offering with Collier Securities serving as the bond
underwriter. So it's very similar to NOVA project with a different underwriter. The bonds will be sold in minimum bond denominations consistent with PED's conduit bond policy, which will depend on the credit rating. And with an expected rating, credit rating of BB would be 25,000. Again, the minimum bond denominations require that none of the individual bonds may be held in a principal amount of less than $25,000 And, Ms. Wolf, before you continue, can you just once again share, context behind the credit rating? Consequences? I'm sorry. Con further context around it?
Just is that a good thing? Is that spending the credit Yeah. The credit rating. Yes. Yes. Why it matters. Oh, Chair Johnson, I I could invite the underwriter to come up and talk more about that, but there's a difference on the interest rate. So the higher the credit rating, the lower the interest rate to the borrower. Okay. Thanks. No. It's just helpful to I love putting context behind things when I see credit ratings. We have plenty here in the city, too, and I always ask that question. So appreciative. You can continue. Let's see. The bonds issued in 2015 have a final maturity date of 07/01/2050.
And the proposed new bonds will extend the final maturity date to 07/01/2065, an additional fifteen years. There will be a small taxable series included with the tax exempt portion. Here is the proposed sources and uses for the project, which totals $15,500,000 and will continue to change until the actual closing. This shows a total principal amount of bonds issued of $14,905,000 with the deposit to the refinance, for the prior bonds of 14,100,000.0 and the balance used for financing costs including a deposit to the debt service reserve
fund. So the sole purpose of this issuance is to refinance the prior bonds. There isn't any new money, new there isn't any new construction, unlike, NOVA. Again, PED's internal credit committee reviewed the bond issuance, proposal on August 5. The credit committee review is solely to confirm the proposal meets our internal policies. The credit committee confirmed their payment of fees and the sale requirements including minimum bond denominations. Similar to NOVA, the HRA is currently collecting annual fee revenue from the prior bonds we issued.
The fee amount collected in '25 on the prior bonds was $30,225 And the HRA will also collect a closing fee fee on the new issuance equal to one quarter of 1% of the amount issued, which is estimated to total $35,237.50, for the $14,095,000 listed. With the extension of the final maturity, the HRA will collect additional fee revenue. As and again, bond the bonds are repayable solely from revenues of the borrower and are not secured
by any revenues or taxing powers of the city or H HRA. And the HRA receives fees when we issue conduit revenue bonds. Same governance governmental approvals needed here. The HRA board will hold a public hearing. That will be considered next, Wednesday, August 20. And the city council will also need to take action on that same date. Twin Cities Academy anticipates closing on the financing in September. And then lastly, on the compliance side, since there isn't any new construction, the only compliance that applies here is for affirmative action, equal employment opportunity.
So the school the borrower has to register their plan with the city. And so that step has actually already been done. So this ends my portion of the presentation. And unless there's questions for me, I would like to invite miss Betsy Luth up to address the board. Ms. Luth is the school's executive director. Thank you, Ms. Wolf. Are there any questions for Ms. Wolf at this time? Okay. Well, seeing none, I will welcome Director Luth. Good afternoon. Good afternoon, Chair Johnson and commissioners. First of all, thank you very much for considering our proposal.
I'm Betsy Leit. I have been with Twin Cities Academy for fourteen years. So I was standing in front of you ten years ago asking for the original construction bonds, which we are grateful for. We are on the East Side Of Saint Paul's. About 71% of our we're six through 12, our secondary program, middle and high school. We are, anticipating about 550 students this fall. We are serve about 71% of the students that do attend Twin Cities Academy are from the East Side, and about 89% are from Saint Paul proper. We are very reflective of the demographics of the East Side Of Saint Paul.
And, we are actually looking for this refunding primarily, as you saw in the presentation, for additional, revenue that can support our programming at Twin Cities Academy. We find the needs of our students to be far greater since the pandemic, and we look forward to being able to offer them continued wraparound services. We are a college preparatory program. We have a lot of programming, designed for students who maybe are first generation going to college and or, just need an extra boost. We have an AVID program, which is a nationally known program to help build,
the soft skills needed for going on to college. We provide a lot of supports to our families for, figuring out how to navigate the FAFSA, application, which is no small feat if you've ever had to do it, and just a lot of mental health services along with, a substantial amount of advanced placement classes, college in the schools classes, and the like. So we are just really looking forward to maintaining what we are currently doing and have an influx of revenue to continue to build on the programming that we already have. So I'm happy to answer any questions and grateful for this opportunity.
Thank you so much, Doctor. Lee, for being here and actually speaking a little bit to, this proposal and just kind of why you all have requested it. I think it's really helpful to provide that insight for all of us, as we're reviewing that. And I appreciated your staff and your team coming out to speak with me as well about this, just to be able to learn more since it's based on the East Side and based on our ward. So Yeah. Appreciate you being here today. Are there any questions at this time for miss Lee? Commissioner Yang? Yes. Mister Johnson. I was looking over there. I kinda knew it was. Earlier, I asked the previous executive director about student enrollment.
And so I was wondering if you could just touch on that. Like, do you plan on making any changes to student enrollment? I apologize. I'm not very good. Earlier, I asked the previous executive director about student enrollment. So can you touch on that too as well? Sure. Are you all planning planning to make any changes to your student body size? Not, not not really. We are our capacity is six twenty students in the current building. If you would ask my principal or any of the administrators, they would tell me I'm absolutely crazy to think that we can get six twenty students there. So I think we're very comfortable where we are.
So there isn't really any desire for significant growth. I could see perhaps an additional 20 students over the next few years, but nothing radically significant beyond that. Thank you. Thank you. Thank you, Commissioner Yang. Are there other questions at all for Ms. Leaf while she's here? Are we seeing none? I will just simply echo what I shared with Director, Wedland. You are more than welcome to come back next week. We will have, obviously, a public hearing at that time for this item, and most likely, we'll take the action then. And so you don't you don't have to, but you're more than welcome to come back.
I intend to be here. So I look forward to seeing you next week. Good to see you. Thank you. Alright. So I believe that's the last thing on our agenda. So we'll plan for the public hearing and such next week to discuss these items. Once again, I just echo to, commissioners. We we for those that potentially have a tab, I I apologize for interrupting it. We appreciate you all being I mean, being accommodating to be here next week too. And with that, we are adjourned.