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SPECIMEN <br /> 6. For maximum flexibility, the Development Account funds should be <br /> recycled for reuse on a short term basis. Ideally, the Development Account would <br /> be used for short-term loans or loan guarantees to be repaid and replaced by other <br /> f inancing. <br /> 7. The use of the Development Account should have a significant impact <br /> on project terms and amount of debt. This means that timing and availability <br /> should contribute to making the project's financing more efficient, but not at the <br /> cost of low interest rates that deplete the Development Account. In addition, <br /> Development Account loans, which accrue interest, generally are much more <br /> efficient than G.O. bonds with capitalized interest in project financing when the <br /> interest-only period is long. <br /> 8. Development Account funds should be adequately secured by liens;_- <br /> ownership options, tax increment, security bonds, etc. <br /> 9. If possible, the funds should be allocated directly or indirectly to a <br /> number of projects and programs. Spreading the funds over several projects will. <br /> reduce the risk that funds to be repaid will not be available for future use. <br /> 10. Minimum interest rates charged should be no less than general <br /> obligation bond interest rates for an equivalent loan term and creditworthiness of <br /> the borrower at the time the loan is made. <br /> rORGANIZATION OF THE ACCOUNT _ <br /> The Development Account shall be designed to accommodate: <br /> 1. Sub-accounts which will contain restrictions as to the reuse of funds; <br /> for example, UDAG and CDBG repayments. <br /> 2. A tax increment revenue bond reserve account which would be <br /> pledged as added security for tax increment revenue bonds; and tax increments <br /> could be pledged but not taken as additional security for the issuance of revenue <br /> bonds. <br /> • <br />