City of Oak Creek

Common Council Report

Meeting Date: 05-06-08

Item No.:

Recommendation: That the Common Council approve, in concept, the intergovernmental cooperation arrangement with the Wisconsin Housing Preservation Corp (WHPC) and the Redevelopment Authority of the City of Milwaukee (RACM) for the issuance of a $9.5 million Bond (estimated).

Background: The WHPC owns approximately 3,016 elderly and 1,881 family affordable housing units throughout the State. In order to reduce their operating costs the WHPC would like to refinance their debt for five projects located in southeast Wisconsin, three in the city of Milwaukee, one in the city of Burlington and one in the city of Oak Creek. The Oak Creek site is Lake Forest II, a 64 unity facility at 8471 South Chicago Road.

The refinance of the debt will provide funding for the rehabilitation of the apartments at the Lake Forest II facility as well as upgrades to other WHPC facilities.

The issue of the Bond will be consolidated under one issuance under the RACM. This reduces the overall issuance costs for WHPC. Therefore, Oak Creek is participating by name only. The debt does not affect the city’s debt service, debt ceiling, or bond rating. The WHPC debt will be covered by a Letter of Credit, originally from Johnson Bank and then transferred to M&I Bank.

The intergovernmental cooperation arrangement will be monitored on behalf of the City of Oak Creek by the law firm of Quarles and Brady who will act as Special Issuance Council for the City of Oak Creek. All fees associated with Special Issuance Council will be paid by the WHPC as part of the total issuance costs.

Fiscal Impact: The debt for this sale will be the sole responsibility of the WHPC. The debt will not be serviced by Oak Creek, and will not affect the city’s debt limits or Bond rating.

Prepared and Submitted by: Patrick DeGrave City Administrator

Fiscal Review by: Pamela Bauer City Clerk