AGENDA MEMORANDUM

 

 

Meeting Date:           October 9, 2006

 

From:                          Bill Pfeilsticker, Finance Director

 

Subject:                      A Resolution authorizing a loan agreement with Suntrust Bank to provide a $4.0 million line of credit (BAN) to acquire the Kristen Court Apartments; pledging revenues to pay the loan payments (subordinate to existing bond covenants); authorizing officials of the City to do any other additional things deemed necessary in connection with execution of the Loan Agreement, the Note, and the security therefore

 

                                    A Resolution of the City of Leesburg, Florida, authorizing issuance of $4 million Capital Improvement Revenue Bonds at a later date, to finance certain of the City’s costs of acquisition and improvement of the Kristen Court Apartment complex  to provide affordable housing, and related costs;

 

Staff Recommendation:

The Financial Advisor and City Staff recommend adoption of the resolutions as presented.

 

Analysis:

Housing Director Ken Thomas negotiated purchase of the properties known as Kristen Court Apartments contingent on the sale of 100% of the properties. All property owners have signed purchase agreements for the 59 units at a total cost of approximately $3.4 million.  

 

The first Resolution accepts the proposal from Suntrust Bank to provide a Bank Anticipation Note (BAN) in an amount not to exceed $4.0 million in accordance with the loan agreement and pledges payment of the note from revenues derived from the Public Service Tax, Half-cent Sales Tax and Guaranteed Entitlement, which shall be subordinate to outstanding debt.  Term of the BAN is three years; the fixed rate will be determined at the time of closing but is estimated to be  5.6% to 6%.

 

The second Resolution authorizes the issuance (within three years) of $4.0 million Capital Improvement Revenue Bonds to pay the Bank Anticipation Note. The bond term and rates will be determined at the time of issuance.  

 


Options:

1.  Adopt the resolutions as presented; or,

2.  Such alternative action as the Commission may deem appropriate

 

 

Fiscal Impact

Revenues generated from rent of existing units will pay for operations, maintenance and debt service.  Long term plans for the complex will include payment of the debt.   Interest payments will be capitalized for the first year and payment in subsequent years will be budgeted. Budget adjustments for revenues and expenditures will be required for 2006-07 Budget.

 

 

Submission Date and Time:    10/5/2006 2:59 PM____

 

Department: ______________________

Prepared by:  ______________________                     

Attachments:         Yes____   No ______

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Attorney Review :       Yes___  No ____

                                                

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. _______wp___________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ________rs___________

 

Account No. _________________

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________