9d - Interfund LoanOptions for $5 Million
Re -financing
The Finance Question
What is our best financing option?
• to buy time
• to extend options in the real world
• for planning the highest and best use
• of a key property
• now that the easement delay is solved
2 1 I'M - Me F
Financing Chronology
Initial Purchase of Property
2013 $ 81200,000
2017
2017
2018
2019
2020
2021
(2,200,000) Sale of 1.86 acre $2.2M
6,0001000 Re -financed
(192,447) pmt
(391,181) pmt
(399,716) pmt
5,016,656 Due 11/17/2022j
Reliable Trustworthy
Debt Balances
2017 Ltd Tax GO Bond (Target)
2013 Ref and Ltd/Community Center
2019A LTGO Bond (SCORE)
2019B LTGO Tax Bond (PA EC)
2019-A Section 108 HUD CP3
REET
5,000,000
REET
81000,000
REET
10, 000, 000
REET
4, 000, 000
275000, 000
General Fund
2,000,000
29, 000, 000
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d°w n de� haV\d?
Cash °�
Fund Restrictions
Reserve
Fund
Fund Bal
ARPA Requirement
Restricted Unrestricted
General Fund
29,100,000
(18,000,000) (9,500,000)
1,600,000
Transportation Cap
10,400,000
(10,400,000) -
Fleet
8,500,000
(8,500,000) -
SWM
5,100,000
(690,000)
(4,410,000) -
Info Sys
4,400,000
(4,400,000) -
REET
4,200,000
(2,000,000)
(2,200,000) -
Health Self Ins
4,000,000
(4,000,000) -
Dow ntow n Dev CaE� 3,900,000
(3,900,000) -
Utility Tax
3,800,000
(1,500,000)
(2,300,000) -
Surface Water Cap
3,400,000
(3,400,000) -
Strategic Reserve
3,000,000
(3,000,000)
- -
Traffic Safety
2,800,000
(1,200,000)
(1,600,000) -
Solid Waste
2,300,000
(2,300,000) -
Buildings
2,200,000
(2,000,000)
(200,000) -
Parks Cap
2,000,000
(2,000,000) -
Path & Trails
1,800,000
(1,800,000) -
Lodging Tax
1,700,000
(200,000)
(1,500,000) -
Dumas Bay
1,500,000
(1,500,000)
- -
Community Center
1,500,000
(1,500,000)
- -
Prop 1 Utility Tax
1,000,000
(1,000,000)
- -
Parks Reserve
1,133,000
(1,125,000)
(8,000) -
Risk Mgmt
800,000
(600,000)
(200,000)
All other
8,067,000
(250,000)
(7,817,000) -
106,600,000
(18,000,000) (26,065,000)
(60,935,000) 1,600,000
REET Annual Budget
Streets
$1,013,000 overlay commitment
$154335000 CIP projects
Parks
$ 2675000 CIP projects
Annual Debt Service
$2,626,000 payments on REET-eligible projects
Reliabl Trustworthy
Options - Payments
10=year bank loan
3-year bank loan
3-year interfund loan
Options — Service Impact
Pay in full?
Refinance with intent to pay down?
Refinance internally?
Options — Cash Management
Pay in full?
Refinance with intent to pay down?
Refinance internally?
Recommendation
Approve resolution to authorize
an interfund loan
refinancing the current year's
balloon payment over 3 years
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City of Federal Way: a very good investment
Addenda
The following amortization tables
are in the packet, included here in
case requested on -screen during
discussion
Option 1
Hypothetical 10-year Loan at current Bank Rates
principal 5,016,656
rate 3.30%
to rm 10
Begin Bal
Interest
Principal
Payment
End Bal
1
510161656
1651550
(431, 595)
(5971-144)
415851061
2
4,585,061
151,307
(445, 837)
(597,144)
4,139, 224
3
4,139, 224
136,594
(460, 550)
(597,144)
3,678,674
4
316781674
1211-396
(475, 748)
(597,144)
312021926
5
3,202,926
105,697
(491, 448)
(597,144)
2,711,478
6
2,711,478
89,479
(507, 666)
(597,144)
2,203,812
7
212031812
721726
(524, 419)
(597,144)
116791394
8
1,679,394
55,420
(541, 724)
(597,144)
1,137, 669
9
1,137, 669
371543
(559, 601)
(597,144)
578,068
10
578,068
19,076
(578,068)
(597,144)
0
954,788
(5,016,656)
(5,971,444)
Option 2
Hypothetical 3-year Loan at current Bank Rates
principal 5,016,656
rate 3.30%
to rm 3
Begin Bal
Interest
Principal
Payment End Bal
1 5,016,656
165,550
(1,618,230)
(1,783,779) 3,398,426
2 313981426
1121-148
(1,671,631)
1, 783, 779 1,726,795
3 1,726,795
56,984
(1,726,795)
(1,783,779) -
334, 682
(5,016,656)
(5,351,338)
Option 3
Hypothetical Interfund Loan at current City Investment Rate
principal 5,016,656
rate 1.40%
to rm 3
Begin Bal
Interest
Principal
Payment End Bal
1 5,016,656
70,233
(1,649,025)
(1,719,258) 3,367,631
2 313671631
471147
(1,672,111)
1, 719, 258 1,695,520
3 1,695,520
23,737
(1,695,520)
(1,719,258) -
141,117
(5,016,656)
(5,157, 773)
Option 4
Hypothetical Interfund Interest -Only Loan at current City Investment Rate
principal 5,016,656
rate 1.40%
to rm 3
Begin Bal
Interest
Principal Payment
1 5,016,656
70,233
- (70,233)
2 510161656
701233
- 70, 233
3 5,016,656
70,233
(5,016,656) (70,233)
2101-700
(5,016,656) (210, 700)
End Bal
1. Extends time
2. Additional time provides options
3. Minimizes impact to REET-reliant Streets and Parks projects
5,016,656
510161656