HomeMy WebLinkAboutIR 8185 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. sass
To the Mayor and Members of the City Council April 6, 1999
Subject: INTERIM FINANCING OF CITY PARTICIPATION IN NEW
►.x�* DEVELOPMENT PROJECTS
The 1998 CIP included $5.0 million to fund the City's participation in New
Development projects. Generally, the City participates in the costs required to install
oversized community facilities (i.e. facilities which are larger than what is required to
serve the private development but, in the City's belief, necessary to serve the future
growth of an area. Examples include certain non-residential streets and drainage
facilities for larger watershed areas). Currently, the entire $5 million has been
committed.
To date, these CIP funds have been utilized for City participation in a wide range of
projects. The most significant single cost involves a creative public-private partnership
at Railhead Business Park, a north Fort Worth business park. On March 24, 1998, the
City Council approved (M&C C-16699) a Community Facilities Agreement (CFA) with
Prime Rail Interest, Inc. This CFA provided for the construction of Meacham
Boulevard from Blue Mound west to the future Meacham Bridge over Main Street as
well as substantial storm drainage and industrial grade roadways to serve the future
development of Railhead. Due to the substantial private sector investment required to
construct these facilities, the City chose to utilize its New Development funds to
provide financing for the Developer's share of the improvements ($2.8 million). This
innovative approach enabled the City to facilitate the commercial development of this
vacant property while also leveraging our existing funding to create additional funds
through an eight percent (8%) interest rate charge. This financing is secured via a lien
on the Railhead properties.
In order to continue City participation in other New Development projects and to
address our short-term cash flow needs, staff intends to utilize up to $2.8 million
available for CIP projects scheduled in future years. These funds will be used on an
interim basis and will be reimbursed when Prime Rail repays the City on or before
April 14, 2000. No voter approved CIP projects will be delayed or eliminated due to
this action.
This interim financing strategy was presented to and supported by the City Council's
Economic Development Committee at their March 16, 1999 meeting. Absent City
Council direction otherwise, staff will employ this strategy for City participation in
future New Development projects.
Should vou e any questions, please contact Hugo Malanga.
Bob Terre 1 4",li5k
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS