5.0. HRSR 10-14-1996 - Laserfiche WebLink

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Page 2 • Primary Issues to Consider The HRA has the following primary issues to consider regarding this issue. 0 What is the amortization schedule for repayment? The amortization schedule as proposed by the Finance Department is attached to this report. The significant aspects of this schedule include an immediate payment of$75,000 from the HRA cash reserves, and the payment of$225,000 on July 1, 1997, after sale of the property to the developer (The Chuba Company). In addition, the HRA agreed to budget $37,000 for a payment on this loan in 1997. It is projected that approximately $36,000 be paid by the HRA in 1998 and an additional $36,000 be paid in 1999 for total repayment of the debt. 0 What is the effect on the HRA's cash balance and future budgets? The HRA cash balance as of September 30, 1996, was $109,000. This would be the source of funds for the initial payment of$75,000. The primary assumption in the proposed loan repayment schedule is the payment of$225,000 on July 1, 1997. This assumes the HRA will close on • the sale of the property to the developer on this date. Although every effort will be made to complete this transaction on July 1, 1997, it is foreseeable that issues may arise regarding timing which will affect this date. Staff recommends that the HRA make it clear in its discussion of this issue that the $225,000 payment cannot be made until such a time as the HRA closes on the sale of the properties to the developer. Future HRA budgets will include a line item for payment of the King and Main obligation. Alternatives The HRA has the following alternatives regarding this issue. 1. Approve the action as recommended by staff. 2. Continue the item for additional information. With this alternative it is important to keep in mind that for future budgeting purposes, the HRA • should take action on this item prior to the end of 1996.