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Music Center and Aquatic Center financing projection

The attached file is a scan of papers the city provided as the response to my Freedom of Information Act request.  In that request I asked for two items:

1.  The audit/report done by the Montgomery County TID in 2011 that showed the city would be able to finance the Aquatic Center using TIF funds. 

2.  The report done by city staff that showed the city would be able to finance the new Music Center using TIF funds.


I've just sat down and spent about 30 minutes looking at the reports.  Couple items;
  • it looks like the reason Parcel ID P70 01820 0005 shows $128, 079.21 on page one but shows $211,412.41 on page two is because the first page shows what is owed for the second half of 2011 and page two shows the full year.
  • Page three shows assumptions about long term interest rates.  These were the estimates the TID thought were possible when they constructed the report in Sept 2011.  If the city bonded all the Aquatic Center loans out in June then they probably beat the 4.5% interest rate by at least 1.0%.  I haven't seen that they did this.  They did say they planned on doing this after I posted my concerns about them announcing in April that they planned on waiting another year before converting short term notes to long term bonds.  How the aquatic center debt is held right now (bonds versus notes) makes a big difference on how much the city will be able to dedicate to the Music Center Project
  • On page 7 we see the city expects to pay $560,000 a year for the next 22 years in order to pay off the Aquatic Center debt.  I don't know if we have recent documents that tell us how much principle is still owed.  We know that they spent about $12,000,000 so far on the Recreational Center Complex. If the city got an interest rate of 2.75% in June then this $560,000 a year would be able to pay off about $9,200,000.  If the city got an interest rate of 3% in June then this $560,000 a year would be able to pay off about $9,000,000.  If they got an interest rate of 3.5% then they would be able to pay off about $8,600,000.  If they did not refinance into long term bonds it is likely they will end up with an interest rate between 5% and 7% which means they will be able to pay off about $6 million.   Before we can know if we can afford to borrow $19 million for the Music Center, it is important to know how much is still owed on the Recreational Complex and what interest rate we will pay.