Hesperia to get the go ahead today at Council ?

Hesperia Pro Formas and Cash flows now available !

The cash flow statements were prepared on Dec. 7 (Pearl Harbor Day) 2007 for a possible financing loan application from a major bank in the amount of $8,000,000. The possibility of a further $1,500,000 borrowing secured by a first mortgage on the Land which has been transferred to Hesperia for $3,000,000, (being fair market value according to a certified appraisal ) was also part of the original package.

There are elementary errors in the cash flow summary presentation that suggest that at the end of 2015 that there is a $2,652,700 'closing cash position' which would appear to be available for an extra dividend back to the city increasing its dividends beyond the original $19,000,000 projection. Alas the back sheets provide the answer that the year 2010 and 2011 Job 1002 Off Site Development Project costs were inadvertently not carried forward to the summary sheets. These 2 items totaling $2,044,000 practically eliminate the cash position leaving us with an maximum possible dividend return of $19,578,500 as shown on the Pro Forma Income statement.

In Job 1003 on site development costs for 2009 & 2010 and Job 1004 on site development costs for 2011 & 2012 the DCC's are estimated to be $500,000 per year or a total of $2,000,000 for the four years.

Using the City's recently passed rate for DCC's for Multi Family Unit of $10,303 and adding the Water DCC's of $2180 and Parks DCC rate of $ 3644 we get a total of $16,127 per unit.
$2,000,000 worth of DCC's will give you 124 UNITS.

There are 1000 units projected to be built on these 69 acres of City owned lands that will be transferred to Hesperia for what are laudable goals of providing attainable housing. However if these are the cost projections and data that the Council must rely on to make this determination then there are too many questions that remain unanswered. I hope that the Council defer this decision until they actually see an updated cash flow, a projection of the # of units of attainable, sustainable housing that will be built, the actual certified appraisal and a real estimate of what 69 acres prezoned for development (as was done with the railway parking lot for the Tolko Building) would be worth on the open market.

When the average person can clearly say, we will give up "x" number of dollars if we develop that land rather than sell it to developers BUT we will get "y" number of attainable housing units and I think that is fair, then the deal should be made. When the average Councillor can actually say and understand that, than then and only then should they actually vote on this deal.

This is a political decision regarding the use of taxpayers assets and Council should assure themselves that can defend their decision by explaining the financial benefits that we will gain and this can only be done if all these facts are debated in an open Council Meeting with all financial projections made available to the public.