In April of 2015 the City entered into an agreement with the CRA to make payments to the city in return for funds transferred to the CRA. The specific terms of the agreement called for repayment of $7,619,352 to the City. In addition to the amounts due the interest is to be calculated at a rate of 4.5% annually on the outstanding balance of General Fund advances as of the first day of each fiscal year.
The agreement also provides a provision that allows the city to relieve the CRA from any portion of the calculated balance of cash advanced or modifying the interest rate if the City determines that it is appropriate for any reason.
The purpose of this agenda item is to request relief from the stated interest rate and the approval of an interest rate in the amount of 2.25%. The basis of the request relies upon the fact that the tax increment revenues have not reached a sufficient level to support the CRA’s economic development efforts. Goals that will serve to help support improving ad valorem values. A lower interest rate better positions the CRA in a manner that will comfortably liquidate its debt, while serving as an economic drive to leverage its investments to best serve its residents.