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Sisk: <br /> <br />What is the total amount of that <br />indebtedness? <br /> <br />Briggs: <br /> <br />Sisk: <br /> <br />Briggs: <br /> <br />It's $80,000.00. <br /> <br />We're at 6% on that loan? <br /> <br />That's correct. <br /> <br />Sisk: <br /> <br />Briggs: <br /> <br />So, we're really going to be <br />financing $80,000.00 at 6% and now <br />we're going into 7% money. Right? <br /> <br />That's correct. The analysis that <br />the City has to look at is the <br />potential for the prime to rise <br />above the level, where it would get <br />above the borrowing rate on the <br />General Obligation Debt. That lease <br />is a special case. It's a <br />questionable one. If the prime rate <br />rises above 8.25%, which is only <br />1.5% above what it is today and <br />stays there, then you will loose <br />money compared to the City's General <br />Obligation borrowing rate. The <br />analysis that has to be undertaken <br />is whether the City believes that <br />between now and September 1996, when <br />that lease is full repaid, whether <br />the prime rate will rise above 8.25% <br />long enough to where the City would <br />incur a loss. That's a judgement <br />call. <br /> <br />Sisk: <br /> <br />Aren't we on a rule of 78 on that <br />loan? Aren't we paying more <br />interest and principle, which is <br />being reduced on an annualized <br />basis? <br /> <br />Briggs: <br /> <br />That's correct. <br /> <br />Sisk: <br /> <br />So, really we paid the lion's share <br />of the interest. It'll be paid off <br />in 1996. <br /> <br />Briggs: <br /> <br />I don't think you can quite use the <br />78's rule in this one, because you <br />were at a fixed interest rate for a <br />certain period of time and that <br />ended in 1990. You've been floating <br /> <br /> <br />