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Finance Director Lund stated when presented in August, the funding source was the Landfill Trust Fund, which was to be reimbursed at the time of future land sales. However, it will show as a loss in HRA books. HRA Executive Director Ulrich pointed out that only a portion of the funds would come from the Landfill Trust Fund and other sources, like the Stormwater Fund, will be used for this project. Development Manager Lazan stated he can do an analysis of initial costs but would guess it to be the original $420,000 plus $30,000, for a total of $450,000. HRA Executive Director Ulrich advised that according to the City Attorney, the HRA can presell lots but then it needs to perform if selling under certain conditions. Chairperson McGlone asked how the HRA can presell lots that do not yet exist. City Attorney Goodrich advised the lots can be described by metes and bounds or the HRA can file the plat. But, whether or not someone will sign a purchase agreement based on a recorded plat or drawing, is an issue. Secondly, in order to extend the bid, the HRA would need to negotiate with the contractor and if they agree, the HRA can extend the bid but if extended too far, other bidders may complain. City Attorney Goodrich advised the City had extended bids in the past with approval of the contractor. Commissioner Ramsey asked how the $40,000 for the park is accounted for because normally those dollars would be profit. Development Manager Lazan stated it is a benefit to the City across the board and even at the lowest lot cost scenario, the City ends up with 15 homes, a park and storm pipe being paid for, and will receive building permit fees and taxes so there are still upsides to the City. Commissioner Ramsey stated there are at least three houses under construction in that area. He thought the Northstar Train stop was driving some of that development along with Legacy Christian Academy. Commissioner Elvig stated he thinks an absorption rate of three to five years is fairly accurate. He noted presale is common and usually requested by the bank. He has no issue with asking the low bidder to extend the bid since the project would be constructed in the spring anyway and the HRA could then market lots through the winter. Commissioner Backous asked why the HRA previously turned down a purchase agreement for the whole project. Development Manager Lazan explained staff had presented for approval a contract to have an exclusive builder of all 17 lots, buying two to three lots at a time. However, the direction of the HRA was that lot sales would go faster if opened to the private market so the purchase agreement was changed with that builder to include only one lot. Housing and Redevelopment Authority / November 13, 2012 Page 5 of 10