SR-413-002 (11)
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~nta Monica, CalIfornia, ._uary 12, 1982
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12/30/81
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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 Agency adopt the attached
resolution which 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 Monica In
the amounts of $871,840 and S824,449 respectively.
Of thi s
total debt of S1,ry9~t289, $500,000 of the Ocean Park debt was
secured by a one (l) year promissory note at 10% due
December 13, 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.
Additionally the City has, since 197~, allocated certain
Community Development Block Grant (CDBG) funds for the
payment of outstanding Ocean Park Redevelopment Project
Federal P roj ect Notes.
These advances total 51,057,975 .l37
and the interest amount which has accrued through June 30,
1981, totals $185,291.01 for a grand total of Slr241,2r,~.88.
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JAN 1 2 1982
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To: Redevelopment Agency
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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 $1,243,21111.88. 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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Agelll Mtg: 1/12/82
RESOLUTION NO.
(Redevelopment Agency Series)
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY
OF SANTA MONICA ESTABLISHING A TWELVE PERCENT (12%)
1NTEREST 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 proj ect, the Ci ty of Santa !'.ton i c a ha s , 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 Ci ty of Santa Monica has, from time 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 S871,A40 and $824,449
respectively; and
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WHEREAS, the Ocean Park Project debt was secured by
a one (1) year promissory note due December 13, 1981 bearing
annual interest at ten percent (10%); and
WHEREAS, the City has, since 197~, allocated
certain Community Development Block Grant funds for the
payment of outstanding Ocean Park Redevelopment project
Notes; and
~HEREAS, 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 $1,243,266.88; and
WHEREAS, these advances are secured by a two (2)
year promissory note due June 30, 1983 bearing interest at
ten percent (10'); and
WHEREAS, effective January 1, 1982, the interest
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 REDEVELOPMENT AG ENCY OF THE
CITY OF SANTA MONICA RESOLVES AS FOLLOWS:
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SECTION 1.
The Agency hereby authorlzes the
Chairperson to execute the 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 Mlllion, Two
Hundred Forty Three Thousand, Two Hundred Sixty Six Dollars
and Eighty Eight Cents (Sl,243,21j1).88).
Such notes shall
bear interest at twelve percent (12%) annually.
Such notes
shall be due on demand by the Clty.
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
acti vi ties shall be determined by the Redevelopmen t Agency
Executive Dlrector.
SECTION 3.
The Secretary shall certify to the
adoption of th i s resolut ion, and thenceforth and therea fter
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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