HomeMy WebLinkAbout2007 Project Financing TO: Members of the Sebastian City Council
FROM: Al Minner, City Manager
RE: INDIAN RIVER DRNEIMAIN STREET PROJECT FINANCING
DATE: Tuesday, September 18,2007
On Thursday, September 6,2007 all communities with a Community Redevelopment Agency
District received a-curve ball"from the Florida Supreme Court. Briefly,the Court ruled in Strand
vs. Escambia County,that taxing jurisdictions could no longer use tax increment revenues to
"bond"projects unless a referendum is passed. This decision changed over 25 years of
precedent,which stated that incremental financing was permissible as long as it did not affect the
tax authority of the jurisdiction.
•
As you know,we have proposed the use of a short term financing, in the amount of$1.5 million,
to fund the Indian River Drive/Main Street Project. The main purpose behind this proposal was to
help with cash flow, prevent cancellation of others projects and to minimize the need to rely on
other special revenues to fund this project.
This court decision came to our attention rather quickly,as such; I have not had opportunity until
early this week to sit down with Shai Francis to devise other financing proposals. Because any
money spent on this project going forward will be coming before you for approval, I do not think it
is necessary to approve any particular financing vehicle at Wednesday's CRA meeting. However,
it will be critical to approve the budget, knowing that it will need to be amended sometime in the
fiscal year.
Having provided that information, I have enclosed for you a spreadsheet of a modified FY 08
CRA Budget. This budget proposes to fund the project in cash by(1)using reserved
Recreational Impact Fees; and,(2)canceling all other CRA projects(Corridor Street Landscape
and Gateway Enhancements Projects)to generate$1,834,962 in cash. This is$165,038 short of
the estimated$2,000,000 needed for the project. The$165,038 gap can be filled by using grant
money. Any overage can then be reallocated to cancelled projects and DST revenues can
potentially be oorrowed to fund any shortfall. Below is a table that depicts this proposal:
PRRENT ALLOCATIONSI
2000,Previously Scheduler Debt Payment 185,625
FY 7 IRO/Main Street Carryover 215,401
Recreational impact Fees 500,000
4DDLTIONAL FUND SOURCES
Cancel all CRA Funded Projects 187,525
FY 08 Unallocated 246,411
Additional Use o1 Recreatior impact Fees 500,000
GRANT OR OTHER SPECIAL REVENUES]
FIND Grant or DST Revenue 165,038
rr0'rAL CASH A�.'AlLAnL"_'
` _ $2,000,000 I
As a rerninder,the cancellation of existing CRA projects effects the City's ability to compete the
Galev,ay Enhancement Project, previously funded at$90,825. This project was originally
scheduled witn Gene Biliero to improve the 512 triangle. When plans fell through to complete this
project it was modified to be the"Flag Pole°project. The other project affected by this proposal is
he cancellation of the Street Landscape project that aimed to improve other district aesthetic.
$ 3,;'O0 was budgeted for this project.
Should Council decide that the above financial vehicle is not an idea plan, some other financing
Orttlons would by.F.3 follows:
1. Go to referendum on the original financing proposal.
2. Use a commercial note to Finance the project where the tax authority of the jurisdiction is
not used as a pledge.
3. Borrow cash from other special revenue funds that have enough surplus,such as the
general fund.
As always, should you have any questions on this or any other matter, please feel free to contact
ie at your earliest convenience.
INDIAN RIVER DRIVE/MAIN STREET
PROJECT C0741
Direct Charges to CRA Fund:
Land Purchase 397,849.24
Appraisals on 806 Indian River Drive 10,000.00
Notices/Postage 779.75
Schulke for Design 190,061.25 598,690.24
Transfer to Project from CRA Fund:
FY2007 215,401.00
FY2008 619,561.00 834,962.00
Transfer to Project from Recreation Impact Fees 500,000.00
Expected Proceeds from Florida Boating Improvement Grant 425,291.00
Expected Proceeds from FIND Grant 487,532.00
Total from All Funding Sources 2,846,475.24
Less Direct Charges to CRA Fund (Shown Above) (598,690.24)
Current Budget for Project in Construction Fund 2,247,785.00
Charges to Budget for Project:
Trash/Landclearing (1,799.24)
Public Notices (271.67)
Tree Consultation/Spraying (865.00)
Schulke for Construction Admin. (46,052.50) (48,988.41)
Currently Available Balance for Project C0741 2,198,796.59
Total Project Cost Estimate is $1,936,972.46
Less $238,013.75 included for Design and Contract Administration
Estimated Balance of Project Costs 1,698,958.71
Available for Contingencies 499,837.88
Ken Killgore
1/29/2009
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