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City Council Regular Meeting Minutes May 22, 2007 Page 6 for the Phase IA housing development. He reported this leaves a balance of $2,611,097 to be paid on the loan. City Manager Morrison stated the developer intends to make an additional payment of approximately $1.8 million on the loan fall 2007 when they begin construction on the first building in the Phase IB for -sale housing development. He stated the Phase 1B housing would not commence until after August 27, 2007. He reported the developer requested that the City request a two-year extension in the term of the Loan from Fannie Mae. 10 City Manager Morrison reported the Fifth Amendment to the Development Agreement indicates 11 that construction on the first building in Phase IB would commence on September 1, 2007 and 12 construction on the second building would begin September 1, 2008. He explained that 2008 is 13 the earliest the remaining land sale proceeds of $800,000 would be available to pay off the 14 remaining principle on the loan. 15 16 City Manager Morrison stated the City, Ehlers and Associates, and the City Attorney agree with 17 this request. 18 19 Councilmember Stille asked if the plans are to start the third building in August of 2007. 20 21 City Manager Morrison replied that was the plan and if the developer could not meet that, 22 another extension would be required. 23 24 Councilmember Stille asked what the new maturity date would be. 25 26 City Manager Morrison replied August 27, 2009. 27 28 Councilmember Stille commented the developer needs to start the third building summer 2007. 29 30 Mayor Faust commented that when this was first started in 2003, the City thought this would be 31 a four to five year project. He stated it seems to be on track in spite of what is happening in the 32 market place. He clarified the developer receives a more favorable rate using this process. 33 34 Motion by Councilmember Stills, seconded by Councilmember Gray, to approve Resolution 07- 35 042, a Resolution authorizing extension of $3,350,000 Credit Facility from Fannie Mae. 36 37 Motion carried unanimously 4/0. 38 39 C. Ordinance 07-002; Mayor and Council Member's Salaries; Section 200.12 (Final 40 Reading). 41 42 Mayor Faust explained this was the third and final reading of Ordinance 07-002 increasing the 43 Mayor's salary to $625.00 per month, Mayor pro tem salary to $563.00 per month, and Council 44 Member's salaries to $500.00 per month. He stated the hI.R.A. stipend would be eliminated. He 45 commented this ordinance would become effective January 1, 2008. 46 7