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<br />The proposed IGA between the City and the Agency sets out the reimbursement terms for this <br />advance. An aggressive reimbursement agreement would use all of the Agency's excess funds <br />each year to reimburse the City. Staff is recommending that only half of the Agency's excess <br />funds each year be used to reimburse the City, so that there would be some additional funds for <br />the Agency to continue to fund projects within the district. This would provide a balance <br />between a concern about the Agency's ability to continue projects and a concern about the <br />rapidity of repayment to the Facility Reserve. <br /> <br />Optional Financing Strategy <br />The City received confirmation from the U.S. Department of Housing and Urban Development <br />(HUD) in late January that it had been awarded a $2 million Brownfield Economic Development <br />Initiatives (BEDI) grant. This grant must be used in connection with a HUD "Section 108 <br />Loan", which is a federal loan program backed by Community Development Block Grant <br />(CDBG) funds. Staff is in the process of determining the costs and requirements associated with <br />the Section 108 Loan program. <br /> <br />Staff is exploring the possibility of using the combination of a HUD Section 108 Loan and BEDI <br />grant money for the Whole Foods Development Project as an optional strategy. In order to move <br />this project forward, however, it will be assumed in the financing strategy and any associated <br />budget requests that the project will be funded using urban renewal revenue bonds and Facility <br />Reserve funds. In the event that staff would recommend the use of the optional financing <br />strategy using HUD Section 108 Loan funds and the BEDI grant, council approval would be <br />required. <br /> <br />Operating and Maintenance Costs <br />Although not part of the plan for financing the capital costs, it is important to consider how the <br />City will pay for the operating and maintenance costs of the new garage. In general, given the <br />current parking rate structure and the Parking Fund's current payment to the General Fund, <br />parking garage revenues from City garages have been sufficient to cover only the operating and <br />maintenance costs for the garages. Those revenues and costs are accounted for in the parking <br />enterprise funds. It is anticipated that this will also be the case for the City's portion of the <br />garage connected to the Whole Foods development, and that there will not be any significant <br />funds available from parking revenues to pay for the costs of purchasing the garage. <br /> <br />LICMOl2006 Council AgendasIM060222IS060222A.doc <br />