TITLE
Recommendation to adopt attached resolution authorizing the City's intent to issue Tax-Exempt Multifamily Mortgage Revenue Bonds in an amount not to exceed $6 million for additional financing for the Decro Scattered Site Housing Rehabilitation Project; and
Authorize City Manager to execute all documents necessary to complete this transaction as indicated in the resolution. (Districts 1,6,9)
DISCUSSION
On March 23, 2004, the City Council adopted a Resolution authorizing the issuance, sale and delivery of Multifamily Mortgage Revenue Bonds for the Decro Scattered Site Rehabilitation Project in the amount of $15,236,000. Subsequent to the City Council action, bonds were issued on April 8, 2004. A copy of the City Council letter is attached for your information as Attachment “A.
At the time the bonds were issued, the construction budget was based on extensive, non-destructive analysis (analysis which did not involve actual demolition of unit,s to uncover hidden issues and conditions) of the 12 sites encompassing 320 apartments that .make up this project. However, because of damage to the properties caused by last spring’s heavy rains, increases in relocation costs, previously unknown property conditions, and additions to the project scope, both construction hard and soft costs have risen by $8,000,000 and it is necessary to increase bond financing for the project by $6,000,000. This issuance is necessary to maintain the tax-exempt status of the project, by satisfying the I.R.S. requirement that 50 percent of a tax-exempt project’s
cost be covered by tax-exempt bond funds. The other estimated $2,000,000 of necessary funding is expected to come from federal HOME funds.
To proceed with the additional bond issuance, it is necessary for the City Council to adopt the attached Resolution indicating the City’s intent to issue Tax-Exempt Multifamily Mortgage Revenue Bonds for additional financing in an amount not to exceed $6 million for the completion of the rehab...
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