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Finance for Alameda at San Leandro Crossings 2 December 21, 2009 deducting this advance from the total commitment of $9.1 million, the RDA will have a remaining obligation of approximately $6.9 million to BRIDGE. To fund this obligation, Staff is recommending that the San Leandro RDA issue Tax Allocation Bonds (TABS) secured by tax increment revenues from the Housing Set-Aside Fund. City Council Finance Committee Action Prior to seeking City Council approval for the bond financing, staff brought this issue before the City's Finance Committee in November of 2009. The Finance Committee was concerned with the cost of the proposed financing (interest and costs of issuance) and instructed staff to consider an internal financing. The Finance Committee also asked if such an internal financing might be accomplished by borrowing from the City's Water Pollution Control Plant (WPCP) fund. Staff researched the feasibility of an internal financing in general and specifically from the WPCP. After completing its review, staff determined that an internal financing was not in the City's best interest and recommended to the Finance Committee that staff proceed with a TAB issue to fund the project. The Finance Committee considered staff's report and recommendation at its December 15, 2009 regular meeting. After discussion of staff's report the Committee accepted staff's recommendations (including utilization of ashort-term internal loan discussed later in this report) to proceed with a TAB financing, and approved the item to go forward to the full City Council for its consideration and action. Tax Allocation Bond Financing Financing Tearn The complex legal and financial structure of municipal bond issues and the long-term impact of bond financing require that the issuer form a team of professionals to assist in both structuring and marketing the bond issue. Staff has assembled a team of legal and financial professionals to assist in this process. The key members of the financing team and their roles are noted below: E Wagner & Associates Financial Advisor Jones Hall, APLC Bond CounseUDisclosure Counsel Urban Analytic, LLC Tax Increment Consultant Financing Plan As currently proposed, in today's market, the TAB issue will have a term of no more than 15 years, a par value of no greater than $8.5 million and a total interest cost of no greater than 8.25%. Costs of issuance, depending on the final form of sale, competitive or negotiated, are estimated to be $200,000 to $300,000. If the sale is a negotiated sale, then the underwriters discount shall not exceed 1%. Based on these parameters annual debt service is estimated to be approximately $985,000. The debt service will be paid from housing set aside tax increment revenues generated by the Joint Project Area and the West San Leandro Project area of the RDA.