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A copy of the amount of debt principal and interest is attached for comparison of options #2 and #3. Option A shows the amotmt needed from the City and County for the cost share agreement based on the issuance of a tax abatement bond. The total shows an annual estimate of $266,430 to be split equally. It should be noted that the current JPA language between the City and County quotes a bi-annual rate of $280,521 based on 10 years and a balloon at the end of 10. Under the tax abatement bond scenario the total cost of the project would be $5,328,600 whereas the JPA calls for a total principal/interest ratio of $5,564,287, without any consideration of how the year 10 balloon payment would be funded. Year 10 calls for a payment of $2,971,846. Option B shows the Lease Revenue Bond option based on the 50/50 split between Anoka County and the City. The annual payment would be $347,105 with a total project cost of $5,206,580. The JPA terms as listed above need to be taken into consideration. Option C shows a Tax Abatement bond with the additional $294,000 that the City needs to finance for the first payment as stated in the JPA. Total project costs would be $5,778,645. Option D shows a lease revenue bond with an additional $294,000 attributed to the City's first payment. Total project costs would be $5,647,766. The current terminology as stated in the Joint Powers Agreement with Anoka County will need to be revised based on the financing option chosen. As currently stated in Section IliA of the agreement regarding the 10 year financing with a promissory note, the City does not have the legal authority to enter into the obligation. The City does have the authority to enter into a similar obligation- a Contract for Deed. A Contract for Deed is limited to a 5-year term. A balloon payment on a Contract for Deed may be troublesome as it could be seen as a circumvention of the 5-year tenn. Recommendation: Based on discussion, staffrecommends that Option C-the issuance of a GO Tax Abatement bond is selected for the purchase of the Boike property. This incorporates a lower interest rate and includes the City's first required payment and keeps the overall abatement amount at approximately the same amount as originally proposed in the JPA, whose language will need to be amended. Committee Action: Motion to recommend to City Council that Option C is selected as the preferred method for the financing of the Boike property based on the above data. CC: 6/13/06