Agenda - Council - 10/16/2012 - Special

Home

CC Special Session Meeting Date: 10/16/2012 By: Diana Lund, Finance Title: Comparison of final pro -forma and Current Draw Schedule in Regard to the Residence at The COR 4.2. Background: Councilmember Elvig has raised concerns in relation to the amount of developeribuilder overhead/contingencies stated on the current draw schedules for the Residence at The COR project in comparison to what was was shown on the final proforma document. Councilmember Elving's concerns stemmed from the $500,0000 prepayment request from F&C. It was at this time that he begin to ask questions in regard to developer fees on the draw versus the proforma that F&C had originally submitted. Currently, the finance director is the staff person designated to oversee the draw requests and submit bond payments after the bank and title companies have signed off with their approvals. To bring all members - staff, council and F&C ion the same page, a brief overview and understanding of the two documents (proforma and draw schedule budget) is needed. Observations: Attached are the draw schedule and sources/uses that was used at time of bonding from Ehlers. Councilmbmers Elvig's question is related to the items high -lighted in yellow on both sheets and the amount of overhead and contingencies listed on the draw schedule happening to equal a little over $3M -which happens to be the amount of equity F&C is supposed to put into the project, thus their equity would really be funded with bond proceeds. A brief comparison of the two sheets: The total amount that shows on the draw schedule is $33,625,980. This amount was achieved as such: $29,600,000 Project costs listed below $2,374,000 city development fees (this is listed as uses & sources under draw schedule so nets itself out) $1,440,000 Additional Land costs (this also nets itself out as land is shown as $2,190,000 use and $1,440,000,000 source to arrive at land proceeds city received of $750,000) $211,000 municipal financing fees (this is the $91,000 in closing costs that they paid back and the $120,000 paid back on the TIF loan of $1,420,000) Total $33,625,000 Cross-referenced the Draw schedule of the $33,625,000 and the Proforma shows differences (outside of the $211,000 listed above) is the $1,349,905 of developer fee listed below(in yellow) which consists of $149,905 in travel and $1,200,000 in Dev OH on the draw schedule. Funding Source: