Council OKs vouching for apartment bonds
NEW ULM – The New Ulm City Council approved Tuesday issuing a $4.6 million housing revenue bond to assist the Martin Luther College 50-unit senior housing apartment complex being developed by Highland Regency House, LLC. at 1520 Sunset Ave.
Highland is entirely responsible for the cost, expense and work on the bond and will receive all its components. In this situation, the City of New Ulm is merely working as a “conduit” for obtaining the bond in its name only. The city can apply its status as a city to give the bond the benefit of being exempt from federal income taxes on the interest payments.
As a special bond, it does not impact the City’s roughly $10 million annual bond limit for traditional bonds. Instead, it is related to a special type of bond exclusively for non-profit entities like senior housing complexes, hospitals and nursing homes. The City rarely ever issues bonds of this type.
The City is held harmless for all factors related to the bond, so it is effectively running its course like a normal bond obtained by Highland. The bond would be in addition to any funding from sources like a TIF district.
City Finance Director reported that the public hearings and work session for the 2014 budget will proceed. Data on each department’s projections will be collected throughout August. The finalized preliminary budget is presented on Aug. 23 to Aug. 30. At the Sept. 3 meeting of the Council, the preliminary 2014 budget and property tax levy will be presented and adopted. Budget sessions will then be held. There will be a levy public hearing on Dec. 3 and final passage takes place on Dec. 17.
The Council tabled discussion on the New Ulm Convention and Visitors Bureau budget until its next meeting after more detailed information was requested. The CVB is anticipating record-setting collection levels from its lodging tax, which funds the CVB, for the totals up to Aug. 31 of each year.
(Josh Moniz can be e-mailed at email@example.com)