Finance Highlights 2009 1117 - Laserfiche WebLink

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Calendar Key dates for the financing are shown in the table below: November 17 To Finance Committee December 21 RDA Board and Council adopts resolutions and deems Preliminary Official Statement final December 22 Publish Official Notice of Intention in Bond Buyer Print and mail POS, Publish Notice of Sale January b, Bid Opening January 15 Bond Closing Contingency Plan BRIDGE was approved by the State Tax Credit Allocation Committee for federal 9% tax credits at the end of September 2009. There are strict deadlines associated with the receipt of these tax credits, including a January 15, 2010 closing and funding date for the RDA's loan commitment. If this deadline is not met the consequences to The Alameda would be severe. More specifically, BRIDGE will lose its tax credit allocation. Because tax credit equity represents the majority of financing for the project, BRIDGE would not have sufficient funding to proceed. Unfortunately, such a hard and fast deadline removes any flexibility from the RDA's bond issue process. There are two key issues. The first is the fixed funding date. Generally speaking, from the date the 9% tax credits were confirmed, staff would have allowed more time for the financing process. Staff and the Finance Team, believe they can meet the funding date set by BRIDGE and are working toward this goal. However, not all elements of the financing are within the RDA's control, nor does the current schedule allow for any contingencies. Secondly, the RDA may find itself considering marginal bond terms in order to meet the funding deadline. It is not unusual for an issuer to reject all bids and return to the market at a later date. Under the deadline noted above, this flexibility is curtailed. To mitigate the negative impact of these two issues, staff is recommending that the City provide the RDA with up to a 90 day bridge loan, if required. The loan would be made from the Waste Water Treatment Plant Fund (WWTP) and the interest paid would be at the City's investment portfolio rate (which is the rate it currently earns). A review of current demands on the WWTP's cash indicates that such ashort-term loan would not negatively impact the WWTP. CONCLUSION Staff requests that the Finance Committee review staff s report and recommend City Council and Redevelopment Agency approval of the proposed TAB financing and the Contingency Plan.