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<br />Beginning this fiscal year, Business Services assumes p~ient of the debt service for the
<br />building. Initial analysis indicated that rent revenue collected at $.90 a sq. ft. was not enough to
<br />cover the payment. Initial calculations:
<br />Rent revenue $1,200,561 (debt service only)
<br />Parking revenue (212 spaces at $55/month) 139 920 (FY 00/O1 partial year-$63,600)
<br />Total $1,340,481
<br />Debt service payment <$1,584,885>
<br />De~cit <$ 244,404> (each year)
<br />Further analysis was done in anticipation of a$2 million surplus that would be applied to buy
<br />down the COP bonds, which was presented to Bob Cannon. The scenarios are attached. The
<br />analysis was based on all county departments paying $1.20 per square foot, with $.90 cents
<br />applied to debt service, $.30 cents to operation and maintenance costs.
<br />Issues:
<br />- The scenarios show Transit paying O&M only. What's unknown is if they are to begin
<br />paying as of July 1 like county departments are. If not, and they do not begin paymeni
<br />until October, there will be 4 months lost on O&M costs. Randy Curtis indicated this
<br />issue hasn't been addressed with Transit yet.
<br />- Vacant space. Rent was calculated on $.10 for vacant ~xpansion space (based ot~
<br />facilities spreadsheet) in the initial analysis. These areas are located on the 3, 4 and 5`n
<br />floors. Vacant space on 3`a floor is assigned to DA, 4`h floor Business Services, 5`h floor
<br />is not assigned. Since the analysis was done, Bob Cannon has since indicated to Bob
<br />McCune that Business Services and DA will pay full rent on the vacant space allocated
<br />to them. To my knowledge, this has not been formally communicated to either
<br />department. If this is the case, this will increase rent revenue by approximately $51,180,
<br />reducing potential deficit to $193,224.
<br />- Ther~ n~eds i~ be formal de~ision tnac~e ~~ how to apply the sutplus from the project as
<br />it affects principal and interest payments beginning in December, 2000. A buy down of
<br />bonds at the beginning of the project allows for carryover funds to grow to offset future
<br />paymet~ts. This would carry forward until ~pproximately FY 2008I09, whzt~ a decisiol~
<br />would be necessary about a rental increase. If the surplus is applied towards the highest
<br />rated bonds (end of the repayment) then the payments reduce by approximately $100,000
<br />each year, reducing the deficit to approximately $94,000 (if full rent paid on vacant
<br />space, $144,404 if not).
<br />>
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