pages: CityCouncil/2007-10-16.pdf, 4
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CityCouncil | 2007-10-16 | 4 | Mayor Johnson inquired whether the City would have the opportunity to approve a new operator, to which the Development Manager responded in the affirmative. Mayor Johnson inquired whether Operation Dignity would be entitled to operate the project from year 15 to 59. The Development Manager responded in the affirmative; stated Operation Dignity's role in year one through 15 would be limited because of tax credit funding that the City would pursue; the project would become Operation Dignity's responsibility in year 15. Mayor Johnson inquired whether the City would approve a new operator if something happened to Operation Dignity. The Development Manager responded the long-term lease would allow the City to approve a new operator. Councilmember Gilmore inquired what would happen if RCD and/or the California Municipal Finance Authority (CMFA) did not have the wherewithal to repay the bonds and whether the City's reputation or credit rating would be affected. The Development Manager responded in the negative; stated the motivation would be to ensure that there was a successful operator with available resources. Councilmember Gilmore stated that the City wants to be involved in and make sure that the housing project has resources; however, she does not want to see the City become financially responsible or have its credit rating or reputation flawed if the project goes belly up in three years. The Development Manager stated numerous financing sources would be concerned that the project would continue to operate successfully; opportunities would be available to review the books and not be surprised. John Stoecker, CMFA Financial Advisor, stated CMFA's name would be on the bond, not the City's RCD would be responsible for repayment, not the City. Vice Mayor Tam inquired how CMFA's bonds are guaranteed; further inquired who backs the funding sources. Mr. Stoecker responded the bond is a private activity bond; stated the repayment is solely from RCD ; CMFA does not give the funds ; funds are given from a private investor; City Group is the lender Regular Meeting Alameda City Council 4 October 16, 2007 | CityCouncil/2007-10-16.pdf |