Agenda - 11-19-1991 - Laserfiche WebLink

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K 2. The market homes in the subdivision are selling for $10,000 less than anticipated, thereby causing a $100,000 deficit. 3. CPCDC is now having to borrow money from a commercial lender in order to complete the project t. The anticipated interest costs for these commercial loans are projected at $140,000 per year. If the administration costs are forgiven, these incurred costs would have to be absorbed by the County. Specifically, if these costs must be borne by the Housing /Community Development Department, that budget will be adversely impacted causing a deficit at fiscal year end. In the event of a deficit, funds would have to be withdrawn from the department's reserve account to cover expenses, thus lowering the reserve balance. RECOMMENDATION(S): The Manager does not recommend approval of the request by Culbreth Park Community Development Corporation to forgive the County administrative costs associated with the Culbreth Park Interim Assistance Grant for the following reasons. 1. Although $16,000.was available for administration, the County only expended $12,563. Also, Culbreth Park did not have to pay interest on these funds thereby lowering their repayment balance. 2. If these costs have to be absorbed by the present Housing /CD budget, a year -end deficit will occur. This would require withdrawal of funds from the department's reserve account, thus lowering the reserve balance. 3. At the request of Culbreth Park representatives, the completion schedule was revised and approved by State officials, to reflect a new project completion date of. December 31, 1995. Thus, although the loan has been repaid, County staff must continue to monitor home sales to ensure compliance with CDSG requirements until December 31, 1995. The administrative cost of this on -going monitoring must be borne by existing staff since no other administrative funds are available.