Develop a public financing plan for a new NBA arena in the city of Sacramento. The arena will have a total cost of $350 million, and the public will finance 60% of the construction cost. Both the City of Sacramento and Sacramento County will participate in the financing of the arena. Devise a public financing plan that uses funds from at least three different sources.
1. Determine the total amount that must be financed. Determine which sources will be used and what changes to those sources must be made (e.g., raising hotel taxes 0.5%).
2. Determine the amount of financing that will be generated from each source. These amounts should sum to the total amount that must be financed.
3. Determine the timing: when money will be collected from each source and when it will be paid back. For instance, if a general obligation bond is used and it is paid for with an increase in hotel taxes, what is the annual payment necessary to pay it off?
4. Create a table showing the sources of financing, the total amount financed from each source, the annual payment amounts, and the time period of those payments.