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. , <br /> 2 <br /> MEMO TO: John M. Link, County Manager <br /> • <br /> FROM: Ellen G. Liston, Finance Director <br /> SUBJECT: FmHA Discount Purchase Program <br /> DATE: February 16, 1989 <br /> The Farmer's Home Administration (FmHA) has recently <br /> announced a Discount Purchase Program for 1989. FmHA must <br /> sell $584 million of Community Programs loans in FY 1989 and <br /> prefers to do so through the Discount Purchase Program. <br /> The County currently holds one FmHA loan - Efland Sewer. The <br /> principal amount on this loan is $200,000. FmHA will offer <br /> to sell this loan back to us for approximately $120,000. The <br /> County will be able choose between the following options: <br /> buy out the loan with current reserves, buy-out the loan with <br /> a refunding bond, or keep the current FmHA loan. <br /> In order to participate in the Discount Purchase program, we <br /> must satisfy several requirements. We must be in a position <br /> to do the following: <br /> 1) Close out the Efland Sewer project and have the <br /> final inspections by the County and by FmHA made. <br /> 2) Make a "good faith" deposit of 5% to FmHA on or <br /> before March 9. <br /> If the County chooses to refinance the loan with a local <br /> bank, additional steps will be necessary. These steps are <br /> dictated by the Local Government Commission because the <br /> refinancing will be treated as a private placement bond sale. <br /> A) Inform LGC by telephone and in writing of the <br /> County's interest in refinancing our FmHA loan. <br /> - This step has already been taken by Finance staff. <br /> B) Begin refunding bond authorization proceedings. <br /> - This step requires Board of Commissioners <br /> action at the February 21 meeting. <br /> C) Begin negotiations with local banks for private <br />