1999 AGN FEB 09 I01 - Laserfiche WebLink

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. __._. . . . . . ..... . . . .. ... . , ... . . .._.. ..... .. .,._... . . ... . _... Mid-Year 8udget Review January 9, 1999 Page 4 of 8 3, That the AD 94-1 and the 1996 Rancho Mediterrania Notes are paid off in full over the next two fiscal years using bond proceeds and other borrowings from non-housing funds. 4. That after Rancho Mediterrania is sold out, any excess lot revenues are returned to the source project areas initially loaning funds based on their proportionate contributions to the low/mod fund. Based on this scenario, the low mod housing fund must borrow a total of $7A million from the following sources: Contribution Schedule LowlMod Housing Fund Proiect Area Cooley Ranch Santa Ana River Mt Vemo� Totais _ Initial °� of Contribution Total $1,250,000 17.86% $2,875,000 41.07% $2,875,000 41.07% S!T L/T Pavback Debt $392,857 $857,143 $903,572 $1,971,428 $903,572 $1,971,428 $7,000,000 100.00% $2,200,001 $4,799,999 The cashflows contemplate that approximately $2.2 million will be available upon completion of the Rancho Mediterrania project to repay a portion of these contributions. The table above assumes that these repayments will be made to the project azeas based upon the percentage of funds contributed to the low/mod housing fund. The balance wiil be a long term loan, which will be repaid when the housing fund becomes healthy again, many years down the road. The Agency could conceivably issue debt for a portion of the Rancho Mediterrania project. If so, the Agency could repay the $2.1+ riiillion immediately to the project azea rather than v�aiting for lot sales to progress. This option can be explored in further detail as we develop the program for Rancho Mediterrania. This is a riskier approach since there will be a debt service cost and any hiccup in the sales effort will require contribution, from other funds. One other downside is the high issuance costs related to such a small bond issue. It needs to b� understood, however, that the project is expected to require a grant contribution of $3 -$4 million. This is not recoverable from the sale of the asset. In Agency stafP s opinion, the uncertainty regazding the Rancho Mediterrania and Colton Palms proje�ts suggests a conservative approach to new debt issuance. The Agency should en on the side of caution until such time as the extent of losses for both projects can be collared so that there is certainty regazding the Agency's cashflows. In addition, the Agency minimi�es its issuance costs by taking advantage of debt it has already issued. Because of the short timeframe for e�ting Rancho Meditenania, the Agency