sr-072782-6mCM:-~C~Erjal Santa Monica, California ~/~
City Council Meeting: July 27, 1982 ~ -
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T0: Mayor and City Council
FROM: City Staff
SUBJECT: Rent Control Board Loan Repayment Deferral
Background
On February 27, 1980 the City Council authorized a
repayment agreement for a $447,638 loan to the Rent Control Board
at 8% simple interest with repayment over three years to assist
with start up operations. In accordance with the agreement,
quarterly repayments have been made on a timely basis since that
time. The outstanding balance on the loan is $100,000.
Proposal
The Rent Control Board has requested deferral
of the remaining payment for one year. This request stems from a
projected reduction of $400,000 in Rent Control revenue due
to lowering of the registration fees from $72.00/unit to $60.00/
unit. Deferral of the loan repayment is one of the measures
being considered by Rent Control to assist their cash flow
situation.
City Staff has met with Rent Control administrators and
arrived at the following suggested terms:
1) Interest will continue to accrue during the 1982-83
deferral period.
2) Effective July 1, 1982 the interest rate will be
increased to 12%, which is currently the maximum
rate allowed the City in its inter-agency transfers.
3) That the interest rate continue to stand at 12o during
1983-84 if the option to make quarterly payments (as
in the current agreement) is taken by Rent Control.
4) The loan will be completely repaid in 1983-84.
Fiscal Impact
There is no adverse impact to the financial condition of
the City in approving this request. The loan will continue as an
asset in our General Fund Balance.
J~/1
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Recommendation
Staff recommends that Council approve an amendment to
the original loan agreement incorporating the terms outlined
above and authorize the City Manager to execute a revised agreement.
PREPARED BY: Lynne C. Barrette
Deputy City Manager
MODIFICATION OF REPAYMENT AGREEMENT
This Modification of Repayment Agreement, entered into this
27th day of July, 1982, by and between the CITY OF SANTA. MONICA, a
municipal corporation (hereinafter CITY), and SANTA MONICA RENT
CONTROL BOARD (hereinafter RENT CONTROL BOARD), is made with
reference to the following:
R E C I T A L S:
A. On February 27, 1980, Contract Number 3455 (CCS)
entered into by and between CITY and RENT CONTROL BOARD
(hereinafter Agreement).
B. CITY and RENT CONTROL BOARD desire to defer the final
annual payment of $100,000 plus interest for one year..
NO4V, THEREFORE, it is mutually agreed by and between CITY
and RENT CONTROL BOARD as follows:
1. Paragraph 2 of Agreement is modified to read as
follows:
TERM OF REPAYMENT
Repayment is to commence on June
30, 1980, with a payment of One Hundred
and Forty-Seven Thousand Six Hundred and
Thirty-Eight Dollars ($147,638.00)
leaving a balance of Three Hundred -
Thousand Dollars ($300,000.00) plus ,~~
interest.. Simple interest at Eight
percent (8~) per annum shall. accrue on
1
the unpaid balance commencing on February
26, 1980 until June 30, 1982. The
principal. and interest payment shall be
repaid in equally amortized installments
over the two fiscal years following this
agreement, i.e. 1.980-1981 and 1981-1982,
on a quarterly basis beginning on
September 30, 1980, and continuing on
December 31, 1980, March 31, 1981, June
30, 1981, September 30, 1981, and
continuing until June 30, 1982.
Simple
(12g) per
interest at twelve percent
annum shall accrue on the
unpaid balance commencing July 1, 1982.
No principal or interest payment
installments shall be required between
July 1, 1982 and June 30, 1983. The RENT
CONTROL BOARD may elect to repay the loan
in one lump sum on July 1, 1983 or make
until the outstanding loan principal and
interest is paid in full.
The RENT CONTROL BOARD reserves the
right to pay installments in excess of
the amount necessary to pay the amortized
principal and interest payments set forth
above.
2. Except as expressly modified herein, all other terms
and covenants set forth in Agreement shall remain the same and
shall be in full force and effect.
IN WITNESS WHEREOF, the parties hereto- have caused this
Modification of Agreement to be executed on the day and year
first above written.
CITY OF SANTA MONICA
a municipal corporation
By
J AN fi. `AL~SCHULER, JR.
ty Manager
APPROVED AS TO FORM:
~^'s
.ROBERT M. MYERS
City Attorney
SANTA M NICA R T (G(JNTROL BOARD