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aside 20% of its independent living units for individuals of very low income, defined as income adjusted for family size, less than 50% of the median income of the surrounding area. He said this latter requirement is very significant ITom a public policy perspective. Director Ponty said, "should the Council approve these documents as to form this evening we would be looking at the bonds around March 12 or March 13" depending on the remaining administerial items being approved by the City Attorney, the City's financial advisor and bond counsel. Director Ponty introduced the City's financial advisor William Euphrat; Tom Downey, bond counsel; Joe Litten, financial advisor to the non-profit; and Drew Bradley, ITom the Hillsdale Group. In response to Council Member Leipzig's questions, Director Ponty advised that the non-profit organization being formed to purchase the facility has not operated a similar facility before in California and has no audited financial statement. He said there is a large feasibility study that wasn't included in the agenda packet, but staff will make it available to Council. Council Member Leipzig asked that staff forward a copy to him. MEMO 2/20/98 In response to Council Member Leipzig's questions, Director Ponty said he knew of no contractual agreement that would prevent rents ITom being raised upon transfer of ownership. Councilman Leipzig said the staff report was incorrect as the residents had not been notified of the impending sale of the facility. MEMO 2/20/98 In response to Council Member Leipzig's questions, Director Ponty said the State does not receive property tax, and if the facility is acquired by a non-profit organization the facility comes off the tax rolls, and the County would lose property tax revenues. Director Ponty said the facility was appraised at $36.9 million and the amount of the bonds to be issued is $43.95 million. He explained that the difference would be used to cover the costs of the transaction and renovation to provide for the Alzheimer Units. Director Ponty said Mr. Euphrat could answer questions regarding what would happen if the non-profit could not pay back the bonds, or if the facility went under, and described the second note to be held by the Hillsdale Group, which provides the City additional security. The Hillsdale Group will manage the Facility and has an incentive to see that it remains solvent. In response to Council Member Leipzig's questions regarding the administration fee, Director Ponty said the City will have to monitor the non-profit's financial performance, and it will compensate the City for any risk associated with the transaction over the life of the bonds. He said, "although the City believes the project is feasible, the City will have some exposure to some extent, and we feel it is appropriate for the City to be compensated." REGULAR COUNCIL MEETING MINUTE BOOK NO. 56 FEBRUARY 9, 1998 MINUTES Page No. 268 PAGE 26