SR-413-002 (10)
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tlanta MonIca, California, ,auary 12,1982
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12/10/81
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JAN 1 2 1982
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TO:
Mayor and City Council
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FROM: City Staff
SUBJECT: Redevelopment Agency Debt to the City of
Santa Monica
Introduction
This report recommends that the City CouncIl adopt the
attached resolution which sets the interest the Agency shall
pay on advances from the City.
Discussion
The June 10, ]981 City financial stateMent shows the Downtown
Redevelopment Project and the Ocean park Redevelopment
ProJect in debt to the City of Santa Monica in the aMounts of
5871,840 and $824,449 respectIvely.
Of thi s total debt 0 f
Sl,,9~,289, 5500,000 of the Ocean Park debt was secured by a
one (1) yea r promi sso ry note at 10% due December 11, 1981.
This time period has already expired.
The rest of the debt
is listed as advances with no definIte time of repayment and
with no interest charges.
z\"ddltionally, the City has, since 197~, allocated certain
Co mm u nit y De vel 0 pm e n t B 1 0 c k G ran t ( C T) Be; ) fun d s for the
payment of outstanding Ocean Park Redevelopment project
Federal ProJect Notes.
These advances total $1,057,975.87
and the interest amount which has accrued through June 10,
b-1J
1981, totals S185,29l.~1 for a grand total of $1,~43,~~~.98.
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To: Mayo~ and City Council
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Janua~y 12, 19~2
A promissory note effective July 1, 1981, has been issued to
cover this debt at ten percent (10%).
This promissory note
1S due on June 30, 1983.
Senate Bill 121 (Craven), Chapte~ 1098, increases the maximum
interest ce1Jing from ten percent (10%) to twelve
percent (12%) effective Janu,uy 1, 1982.
Th1S 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], 19R?, an0 authorizes the
the City to receive three separate promissory notes from the
Redevelopment Agency in the amounts of $871,840, $824,449,
and Sl,143,2~~.88.
The resolution further resolves that all
future advances are to be paid quarterly as funds are
available.
Recommendation
It is recommended that the City Council adopt the attached
resolution.
Prepared By: NlCk Rives
K. Watanabe
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12/30/81
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coun4 Mtg: 1/12/82
RESOLUTION NO.
6416
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL 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 Monica 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
WH E REA S , i nor de r to ass i s t the Red eve lop men t
Agency with the obligations accruing under the project Notes,
the Ci ty of Santa Monlca has, from tlme to time, advanc ed
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 $871,840 and $824,449
respectively; and
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WHEREAS, the Ocean Park project debt was secured by
a one (1) year promissory note bearing annual interest at ten
percent (lOt); and
WH ERE AS, the C i t Y has, s 1 n c e 1 9 7 n, a I lac ate d
certain Community Development Block Grant funds for the
payment of outstanding Ocean Park Redevelopment Project
Notes; and
WHEREAS, these advances total $1,057,975.87 and the
interest amount which has accrued through June 30, 1981,
totals $185,291.01 for a grand total of $1,243,2~~.~B; and
WHEREAS, these advance s a re secured by a two ( 2)
year promissory note due June 30, 1983 bearing interest at
ten percent (10%); and
WHEREAS, effecti ve January 1, 1982, the in te res t
rate ceiling on public agency debt has been changed from ten
percent (10%) 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 CITY CQU1lJCIL OF THE CITY OF
SANTA MONICA RESOLVES AS FOLLOWS:
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SECTION 1. The City Council hereby authorizes the
City to receive from the Agency, promissory notes in the
amounts of Eight Hundred Seventy One Thousand, Eight Hundred
Forty Dollars ($871,840), Eight Hundred Twenty Four Thousand,
Four Hundred Forty Nine Dollars ($824,449), and One Million,
Two Hundred Forty Three Thousand, Two Hundred Sixty Six
Dollars and Eighty Eight Cents ($1,243,2t:i11.88).
Such notes
shall bear interest at twelve percent (12%) annually.
Such
notes shall be due on demand by the City.
The ci ty Manager
is hereby authorized to demand payment of such notes on
behalf of 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 funds are available for
repayment or are required for current or future redevelopment
actIvi ties shall be determined by the Redevelopment Agency
Executive Director.
SECTION 3.
The Ci ty Clerk shall ce r t i fy to the
adopt ion of thi s reso lut ion, and thence fo rth and thereafter
the same shall be in full force and effect.
APPROVED AS TO FORM:
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ROBERT M. MYERS ~
City Attorney
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ADOPTED AND APPROVED THIS
12th
DAY
OF January
, 1982.
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MAYOR
I HEREBY CERTIFY THAT THE FOREGOING RESOLUTION
NO. 6416 (CCS)WAS DULY ADOPTED BY THE CITY COUNCIL OF THE
CITY OF SANTA MONICA AT A MEETING THEREOF HELD ON
January 12 , 1982 BY THE FOllOWING COUNCIL VOTE:
AYES: COUNCILMEMBERS: Conn, Edwards, Jennings, Press,
Reed, Zane, Mayor Yannatta Goldway
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
ABSTAIN:
COUNCILMEMBERS: None
ATTEST:
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CITY CLERK