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4 <br />Proiected Cash Flow and Overatine Budget Deficit <br />The OCHC presented a request to the County Commissioners in February 1998 regarding <br />their need for additional funding. Information presented at that time projected a cash flow <br />deficit of approximately $22,000 and a budget short fall of approximately $42,000. <br />According to cash flow projections, the corporation will run out of money at the end of <br />April or early May. The projections have been reviewed and confirmed. As mentioned <br />above the following items contribute significantly to the projected deficit. <br />Predevelopment Costs $ 8,000 <br />(Scarlette Village,/Meadowmont) <br />Engineer (Meadowmont) 12,000 <br />Architect (Meadowmont) 1,480 <br />These items have not been paid. <br />Impact of Magnolia Place Partnership <br />As mentioned above OCHC entered into a partnership with a builder to establish Magnolia <br />Place Partners, an entity separate from the regular operations of the Corporation. The <br />liabilities mentioned in the discussion above belong to the Partnership. These liabilities <br />exist because the builder did not complete the job and left bills for materials unpaid. The <br />builder was not required to provide a performance bond. The Partnership has cash on <br />hand to pay a significant portion of the liabilities, however, liens have been placed upon <br />individual homes in Magnolia Place. As long as this situation exists, there is a possibility <br />that the Corporation, as a partner of Magnolia Place partners, may have to shoulder the <br />responsibility for a portion of the liabilities. Included in the Partnership funds restricted <br />by the liens is approximately $30,000 to $40,000 in development fees that could <br />eventually be passed along to Corporation. The Corporation's original budget for 97 -98 <br />included $50,000 in revenue from this source. <br />Item Requiring Immediate Attention <br />As mentioned above the Corporation will run out of money soon if additional funds are <br />not made available or if the current expenditures cannot be reduced. The budget shortfall <br />will be approximately $42,000. If each government were to provide the funds required to <br />prevent this shortfall based on current contributions, the cost to each would be as follows: <br />Orange County $19,000 <br />Town of Chapel Hill $19,000 <br />Town of Carrboro 4,000 <br />$42,000 <br />