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Revitalization Commission <br />Minutes <br />September 8, 2014 <br />Page 2 of 6 <br />• Chair Becker showed pictures of existing detention ponds full of runoff <br />from a recent storm. He brought the pictures in to emphasize the <br />importance of the ponds and that there will be times when they will be <br />marshy. Commissioner Lathrop said the ponds accumulate silt and trash <br />and can be unsightly. Commissioner Gorsevski said the minutes from the <br />last meeting say there is no maintenance required on detention ponds but <br />there will be some maintenance required to remove trash. <br />• Chair Becker asked Economic Development Director DeJong if the LRC <br />financial forecast had been sent to Council for review. DeJong said it has <br />not yet been sent. <br />Business Matters of the Commission — <br />a. Update on Core Project Area TIF Bond Interest: <br />Economic Development Director Aaron DeJong gave an overview of the TIF <br />Bond interest discussion from the last meeting. RMCS, the DELO developer is <br />compounding unpaid interest during the duration of the TIF bond instead of <br />accruing at simple interest in accordance with the Term Sheet. <br />Staff has enacted terms that are in the original term sheet. The concept of <br />compounding interest creates a greater negative balance in the early years. <br />Compounding may create disincentive to finish vertical infrastructure as soon as <br />possible. The proformas submitted showed compounding interest, however the <br />Term Sheet showed simple. <br />Staff consulted Bond Counsel; Bond Counsel says interest can go either way. <br />DeJong asked the LRC to provide direction so the Bond documents can go to <br />Council. Once this issue of interest is decided, the bonds will go to Council; <br />Council will determine if the interests of the City are protected then the LRC can <br />approve the sale of the bonds. <br />Commissioner Lathrop asked for clarification: the Term Sheet stated simple <br />interest, yet the projections showed compounding interest? DeJong replied that <br />is correct. <br />Commissioner Gorsevski asked if DeJong had any sense of what the interest <br />accumulation with compounding interest would result? DeJong replied when the <br />bonds are bought, there will be several years delay until the first TIF proceeds <br />are received. Changing to compounding interest has an approximately $300,000 <br />of additional interest being paid. <br />Commissioner Becker asked RMCS how they signed an agreement stating the <br />terms as simple interest yet provided projections that show compounding <br />3 <br />