SR-413-002 (5)
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tic! / RA -3
JAN {j 1987
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FI:CMD:BR:g:opn12184
council Meeting: 1/13/87
Santa Monica, California
TO: CITY COUNCIL AND REDEVELOPMENT AGENCY
FROM: City and Agency Staff
SUBJECT: EXTENSION OF TIME FOR OUTSTANDING PROMISSORY NOTES
Introduction
The City of Santa Monica holds six Promissory Notes, two for the Downtown
Project and four for the Ocean Park Project, for funds loaned to the
Redevelopment Agency by the City. These notes, last renewed by the Agency
January I, 1986, need to be renewed for the 1987 calendar year effective
January 1, 1987.
Background
The City has loaned the Agency funds for various administrative,
operational and miscellaneous expenses. These loans have been formalized
in the form of Promissory Notes with payment due annually. If payment in
full is not received by the city, it is necessary that the Notes be
renewed. Since the Agency does not have funds available at this time to
make payment in full for the amounts outstanding 12/31/86, the six
Promissory Notes should be renewed effective January I, 1987. The
attached Notes include the appropriate accrued interest through December
31, 1986 and reflect the impact of various payments made during calendar
year 1986.
tJ(!'/RA ~ 3
JAN 1 3 1987
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BUdget/Financial Impact
There is no budgetary impact resulting from the renewal of these Promissory
Notes. The financial impact is to increase the liability of the Agency by
$1,129,460.83 which represents net accrued interest for the period 1/1/86 -
12/31/86. This increase was more than offset by the payment of $1,497,000
in interest to the General Fund on November 12, 1986. As a result, the net
change in the financial liability of the Redevelopment Agency during
calendar year 1986 was a decrease of $367,539.17.
Effective January 1,
1987, staff recommends that the interest rate for five promissory notes be
one-half of one percentage point (.5%) more than the City's actual rate of
investment earnings for calendar year 1987.
The additional .5% is to
reimburse the city for carrying this debt. The sixth promissory note must
continue at the same rate of interest, 7.75%, as the Downtown Redevelopment
Project Parking Lease Revenue Bonds.
Recommendation
It is recommended that:
(A) the City Council agree to renew the six loans to the Redevelopment
Agency and to accept the attached Promissory Notes; and
(B) the Redevelopment Agency approve and authorize the Chairperson to
execute the six attached Promissory Notes between the Agency and the
City, extending the loans for the 1987 calendar year.
Prepared by: C.M. Dennis, Agency Treasurer/City
Director of Finance
W.R. Ramsey, Assistant Director of Finance
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City of Santa Monica
Extension of Time for Outstanding Notes
10% per Annum*
Promissory
Kote Number
Promissory
Note
Balance
1-1-86
Interest
Payment
11-12-86
Accrued
Interest
1-1-86 to
12-31-86
Promissory
Note
Balance
1-1-87
DOT~town Projects
1 Downtown $1,161,322 08
Redevelopment
Project**
$( 347,548.00)
$111,371.28
$ 925,145 36
6 Downtown 7,161,702 71 (1,149,452.00)
Redevelopment
ProJect******
Sub-total
Downtown
Project $8,323,024 79 $(1,497,000 00)
542,828 87
6,555,079 58
$654,200 15
$7,480,224 94
Ocean Park Project
2 Ocean Park 2,060,532.74
Federal
A1location***
3 Ocean Park 1,328,506 78
Federal
A1location**
4 Ocean Park 1,000,117.10
Federal
A1location****
5 Ocean Park 363,450.17
Federal
A1location*****
Sub-total
Ocean Park
Project $ 4,752,606 79 $
206,053 27 2,266,586.01
132,850 68 1,461,357 46
100,011 71 1,100,128 81
36,345 02 399,795 19
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$ 475,260 68 $ 5,227,867 47
Total
$13,075,631 58 $(1,497,000 00) $1,129,460 83 $12,708,092 41
* Effective January 1, 1987 Notes 1 through 5 will carry an interest rate one half a
percentage point ( 5%) higher than the City's actual rate of investment earnings
for calendar year 1987 However, note 6 will continue to carry an interest rate of
7-3/4%, as required by the Resolution of the Agency acknowledging the debt This
is the same rate of interest on the Downtown Redevelopment Project Parking Lease
Revenue Bonds
** Reimbursement for various admin~strative support and service costs, owed to City's
General Fund
*** Reimbursement of CnBG funds used to pay interest on outstanding Federal Urban
Renewal Loan Note, owed to City's CnBG Fund
**** Close out of Ocean Park Federal Urban Renewal Project, owed to the City's General
Fund
***** Close out of Ocean Park Federal Urban Renewal ProJect, owed to the City's CDBG
Fund
****** Represents the value of var~ous parcels of property transferred from the City to
the Agency for the Downtown Redevelopment Project (per Agency Resolution 352,
10/24/78) Owed to General Fund
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PRO MIS S 0 R Y
NOT E
Downtown
Redevelopment Project
Santa Monica, California
January I, 1987
On December 31, 1987, for value received, the undersigned promises to pay
to the order of the City of Santa Monica, a municipal corporation, at Santa
Monica, the sum of Nine Hundred Twenty Five Thousand, One Hundred Forty
Five Dollars and Thirty six Cents ($925,145.36), with interest from January
1, 1987, at the rate of one-half of one percentage point (.5%) more than
insti tuted on this note,
s for calendar year 1.987. In
12% per annum. principal and
states. If action be
ornises to pay all costs of
es.
the city's actual rate of
no event shall the intere
interest are payable in
collection, including reas
The Redevelopment Agency of the City of
Santa Monica
ATTEST
BY:
BY:
C. H. Dennis
Treasurer
James Conn
Chairperson
APPROVED AS TO FORM:
BY : rL...... --L--<-.,.I-t............... ~
Robert M. Myers U
Agency Attorney
P.N. #1