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
Attachments
No attachments for this document.