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03/06/98 FRI 1i:10 FA% 503 223 4606 MELVIN hfARh COMPANIES 1~002 <br />~ <br />emo <br />To: Billy Wasson <br />F~m: Craig Lewis; Projed Manager <br />Dalo: 03/06/98 ~ <br />Re: Correlation between amount borrowed and annual debt service <br />Billy- <br />Per your request, I have adjusted the laan debt on the previous mode! to establish the sensitivity <br />between the project cost bonowed and annual debt senrice. <br />Based on a County occupancy of 96,B22, a0 5.25°r6 interest rate on a 25 year ioan the impacts are as <br />~ follows: <br />Reduce the amour~t borrawed by: $10,000 and the redudion in annual debt service is: $719/ year <br />Reduce the amount borrowed by: $100,000 and the reductiun in annual debt service is: $7,192/ year <br />Reduce the amount borrowed by_ S1,0o0,000 and the reduction in annual debt service is: $71,91 QI <br />year <br />Correlating these amou~s to r~nt impacts I cslculated that a$71,190 reduction in annual debt service <br />would r~sult in a$.74 / year ($.062/ mo.) redudion in required County (exduding spec and Transit) <br />rent. By my estimates, the County's morrthly reM wouid be slightly less than $1.24 per rsf per mo. <br />instead af the infamous $1.30. <br />~ <br />• Page 1 <br />