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2. uestion - Can the fee be split between each unit? Answer ��2A Staff' Each �Vestrvood Village I unit has its own property address and PIN number which the total fee would be evenly split between each unit owner and applied to their taxes as a special assessment. However, any owner can pay off the total fee immediately or pay off earlier than the term determined. 3.1 In addition, the HRA and City Council must consider how to finance the up-front costs of the project estimated to be $1 -$1.2 million. 1. Consideration -_The program is like a special tax assessment with limited risk to the City or taxpayers. The City could loan the HRA funds to finance the program. In turn, the HRA can designate that the funds be applied to the property within the HIA _ which are paid back througll assessments over a period of years. There can be an _ agreement between the HRA and City to payback the loan with interest based upon - the serni-annual collection of the fee from the taxes. The City Finance Director & HRA staff have been working together to evaluate the best mechanism to finance the program in partnership with the HRA or through other alternatives. At the November — 20��' Council Work Session, a memo was prepared that outlined the financial policy issues as well as public purpose issues associated with this project. The memo is attached and summarized as follows: a. Financing Strategy- Housing Bonds - The City could take an approach similar to street improvements with a housing improvement area. This would entail issuing housing revenue bonds, mal�ing the capital contribution, and then assessing the property owners. However, the proposed project will require approximately $1 million, which is relatively small for new bond issues. Generally speaking, the issuance costs for a bond of this size is relatively high compared to a much larger issue. As a result, the City typically does not issue bonds of this size. ' Ootions - If the Westwood Village project was incorporated into a m�zcl� larger housing bond issue - say $3 million or more, then the issuance costs become less of a factor, and the financingpackage becomes more favorable. With several other older comvlexes in the community, this tool may be a viable option to encourage reinvestment and reduce future blight. ■ A survey of the associations could be conducted to understand the future improvement needs and the Council could reevaluate if there is a larger public ueed for this tool. If that appears to be true, issuing bonds for this program could be a viable option. b. Financing Strategy - Cash Loan - As an alternative to issuing housing bonds, the City could choose to simply make a cash loan to Westwood Village I(or through the HRA to Westwood Village �. The loan would �IIA Public Hearing (12-18-06) - Page 3 of 8