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,.... ~;~~ .~ ~'~~~'_.~ ,~-~ Memorandum To: Billy, HP & David Hartwig From: Bob • Date: August 16, 1999 Re: Debt Service for Courthouse Square -- Engaging the Issue The attached is a Draft of the Debt Service for Courthouse Square. The first four columns are the current Debt Service for Courthouse Square. Debt Service is the payment schedule for Courthouse Square. This is not unlike a mortgage for a house. These payments are required to be paid to the Trustee each year. Based upon my conversations with the Bond Counsel, the second four columns are a Draft of a Possible Debt Service for Courthouse Sauare based upon the following assumptions: 1. Upon completion of the construction two million dollars will remain in the construction account. These funds aze Surplus Funds under the terms of the Trust Agreement. Surplus Funds must be used to buy back or call bonds. The BOC has the choice of which bonds will be called. 2. The BOC would buy back or call the longest bonds, i.e., all the 2023 bonds and a portion of the 2022 bonds. 3. There will be no private rental income, and the gross square footage is approxirnately 124,000. 4. Thirty cents per foot is adequate to provide for operation and maintenance of the Courthouse Square on the gross square footage. FIRST YEAR WORST CASE SCENARIO: Gross Square Footage divided into Debt Service =$ 1.07 per month per foot. Adding O&M =$1.37 per month per foot. SECOND YEAR ~WORST CASE SCENARIO: Gross Square Footage divided into Debt Service =$ 1.00 per month per foot. Adding O&M =$130 per month per foot. Note, this is gross square footage and not net square footage. Net square footage rental rates to departments would be about 25% higher or between $1.50 &$1.60 per foot. QUESTION: ASAP, WHAT IS WRONG WITH THIS ANALYSIS ? With these numbers there is no way the rental rate is $1.20 per foot.