SR-RA-2
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, . california,~lUary 12,
. . t - ~ mta Monica, 1982
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12/30/81
JAN 1 2 iSB2
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TO: The Santa Monica Redevelopment Agency
FROM: Agency Staff
SUBJECT: Agency Debt to the City of Santa Monica
IntroductIon
This report recommends that the A.gency adopt the attached
resolution wh i c h sets the interest the Agency shall pay on
advances from the City.
Discussion
The June 30, 1981 Agency fInancial statement shows the
Downtown Redevelopment project and the Ocean Park
Redevelopment project in debt to the City of Santa Monlca in
the amounts of $871,840 and S824,449 respectively. Of this
total debt of Sl,~9~,289, $500,000 of the Ocean Park debt was
secured by a one ( 1 ) year promissory note at 10% due
December 13, 19B1. This time period has already explred.
The rest of the debt is listed as advances with no definite
time of repayment and with no interest charges.
Additionally the City has, since 197", allocated certain
Community Development Block Grant (CDBG) funds for the
payment of outstanding Ocean Park Redevelopment project
Federal project Notes. These advances total S1,057,975.S37
and the interest amount which has accrued through June 30,
1981, totals $185,291.01 for a grand total of S1,243,26~.88. RA-~
JAN 1 2 ~P??
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To: Redevelopment Agency - 2 - January 12, 1982
A promissory note effective July 1, 1981, has been issued to
cover this debt at ten percent (10%) . This promissory note
is due on June 30, 1983.
Senate Bill 121 (Craven) , Chapter 1098 , increases the maximum
interest ceiling from ten percent (10%) to twelve
percent (12%) effective January 1 , 1982. This bill was
enacted to bring the interest rate ceiling closer to the
prevailing market interest rates.
The attached resolution sets the interest rate at 12%,
accrues interest starting January 1, 1982, and authorizes the
execution of three separate promIssory notes to the City in
the amounts of $871,840, $824,449, and Sl,243,26fi.88. The
resolution further resolves that all future advances are to
be paid quarterly as funds are available.
Recommendation
It is recommended that the Agency adopt the attached
resolution.
Prepared By: Nick Rives
K. Watanabe
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12/30/81
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RESOLUTION NO.
(Redevelopment Agency Series)
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY
OF SANTA MONICA ESTABLISHING A TWELVE PERCENT (12%)
INTEREST RATE ON FUNDS ADVANCED BY THE CITY OF
SANTA MONICA TO THE AGENCY
WHEREAS, pursuant to the implementation of the
Ocean Park Redevelopment project and the Downtown
Redevelopment Project, the City of Santa N10nica has, from
time to time, advanced certain funds to the Redevelopment
Agency for the purpose of paying administrative and other
expenses; and
WHEREAS, pursuant to the implementation of the
Ocean Park Redevelopment project, the Redevelopment Agency
has issued certain project Notes; and
WHEREAS, in order to assist the Redevelopment
Agency with the obligations accruing under the project Notes,
the CIty of Santa Monica has, from tIme to time, advanced
certain funds to the Redevelopment Agency for the purpose of
paying interest on said Notes; and
WHEREAS, the Downtown Redevelopment project and
Ocean Park project, as of June 30, 1981, are in debt to the
City of Santa Monica in the amounts of S871,R40 and S824,449
respectively; and
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WHEREAS, the Ocean Park Project debt was secured by .
a one (l) year promissory note due December 13, 1981 bearing
annual interest at ten percent (l0%) : and
WHEREAS, the City has, SInce 19715, allocated
certain Community Development Block Grant funds for the
payment of outstanding Ocean Park Redevelopment Project
Notes; and
WHEREAS, these advances total Sl,057,975.9~ and the
interest amount WhICh has accrued through June 30, 1981,
totals S185,291.01 for a grand total of $1,243,266.88; and
WHEREAS, these advances are secured by a two (2 )
year promissory note due June 30, 19B3 bearing Interest at
ten percent (l0%) ; and
WHEREAS, effective January 1, 1982, the interest
rate ceiling on public agency debt has been changed from ten
percent (l0%) to twelve percent (12%) ; and
WHEREAS, in consideration of not calling the
amounts due and in consideration of future advances, the
Agency agrees to pay interest cost for all advanced funds at
the rate of twelve percent (12%) ,
NOW, THEREFORE, THE REDEVELOPMENT AGENCY OF THE
CITY OF SANTA MONICA RESOLVES AS FOLLOWS:
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SECTION 1. The Agency hereby authorizes the
Chairperson to execute the promissory notes in the amounts of
Eight Hund red Seventy One Thousand, Eight Hundred Forty
Dollars ($871,840) , Eight Hundred Twenty Four Thousand, Four
Hundred Forty Nine Dollars ($824,449) , and One .l'\IIillion, Two
Hundred Forty Three Thousand, Two Hundred Sixty SIX Dollars
and Eighty Eight Cents (Sl,243,2l51i.88l. Such notes shall
bear interest at twelve percent ( 12%) annually. Such notes
shall be due on demand by the City.
SECTION 2. Any future advances by the City to the
Agency shall be reimbursed on a quarterly basis from
available funds. Such advances shall bear interest at twelve
percent (12%) annually. Whether fund s are available for
repayment or are required for current or future redevelopment
activities shall be determined by the Redevelopmen t Agency
Executive Director.
SECTION 3. The Secretary shall certify to the
adoption of this resolution, and thenceforth and thereafter
the same shall be in full force and effect.
~PPROVED AS TO FORM:
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ROBERT M. MYERS ~
Agency Attorney
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