Columbus, Georgia

Georgia's First Consolidated Government

Post Office Box 1340
Columbus, Georgia, 31902-1340
(706) 653-4013
fax (706) 653-4016

Council Members

Agenda Item # 3





Columbus Consolidated Government

Council Meeting



May 27, 2008

Agenda Report # 281



TO: Mayor and Councilors



SUBJECT: Section 108 Loan Refinancing



INITIATED BY: Department of Community Reinvestment



Recommendation: Approval is requested to refinance of the City?s Section 108

Loan.



Background: The City of Columbus is wishing to take advantage of the

opportunity to convert its Section 108 Loan from a variable-rate to permanent,

fixed-rate financing through the public offering to be held by HUD on June 5,

2008. In 1998, the City received a $14,065,000 Section 108 Loan for economic

development in the Second Avenue Redevelopment Area. Currently, the City is

utilizing 66.60% of its $1,783,962 entitlement to repay the Section 108 Loan.

Since 2001, the City of Columbus?s entitlement has been reduced by $1,035,038

and the percentage of funds going toward the repayment of the Section 108 Loan

rising from 55.69% to the current amount of 66.60%. As the availability of

funding has diminished, the scaling back of programs has reduced the number of

persons impacted by our programs.



Analysis: The cost savings of the refinancing of the Section 108 Loan is

projected to be between $750,000 and $1,000,000 over the remaining eight (8)

years of the loan. With the projected $750,000 to $1,000,000 cost savings from

the refinancing, the City will be able to restore some of the programs and

redevelopment activities, which have been reduced due to diminished funding.



Financial Considerations: The City will advance the cost of the issuance from

the General Fund. With the start of the new fiscal year, the General Fund will

be reimbursed from the CDBG allocation. Payment for the cost of issuance will

be required prior to June 11, 2008.



Legal Considerations: Council must approve refinancing.



Recommendations: Approve a Resolution authorizing the refinancing of the

City?s Section 108 Loan.



A RESOLUTION

NO. _____



A RESOLUTION AUTHORIZING THE REFINANCING OF THE CITY?S SECTION 108 LOAN.

WHEREAS, in 1996, the City of Columbus made application and received a

$14,065,000 Section 108 Loan Guarantee for the Department of Housing and Urban

Development (HUD) to provide economic development in the Second Avenue

redevelopment area; and,

WHEREAS, the Redevelopment Area and city of Columbus have eight (8) years

remaining on the loan repayment; and,

WHEREAS, the City of Columbus wishes to take advantage of the opportunity to

convert its Section 108 Loan from a variable-rate to permanent fixed-rate

financing; and,

WHEREAS, the Department of Housing and Urban Development (HUD) will hold a

Public Offering on June 12, 2008 to enable Section 108 borrowers to obtain

long-term fixed-rate financing; and,



WHEREAS, the projected savings of the refinancing is $750,000 to $1,00,000 over

the remaining eight (8) years of the loan; and,

WHEREAS, the City will advance the cost of the issuance from the General Fund

and will reimburse those funds from the City?s Community Development Block

Grant (CDBG) allocation; and,

WHEREAS, it is in the best interest of the Consolidated Government of Columbus,

Georgia to refinance the Section 108 Loan.



NOW, THEREFORE, THE COUNCIL OF COLUMBUS, GEORGIA, HEREBY RESOLVES AS FOLLOWS:

That the City Manager is hereby authorized to execute all contracts, agreements

and understandings related to the refinancing of the Section 108 Loan.

Introduced at a regular meeting of the Council of Columbus, Georgia,

held the ____day of __________, and adopted at said meeting by the affirmative

vote of ____members of said Council.



Councilor Allen voting __________.

Councilor Anthony voting __________.

Councilor Baker voting __________.

Councilor Barnes voting __________.

Councilor Davis voting __________.

Councilor Henderson voting __________.

Councilor Hunter voting __________.

Councilor McDaniel voting __________.

Councilor Turner Pugh voting __________.

Councilor Woodson voting __________.



_______________________________ ____________________________

Tiny B. Washington, Clerk of Council Jim Wetherington, Mayor

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