19970701 CC SR Loan Agreement between the City of RPV and RDA for FY 1996-97 and 1997-98 • II
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MEMORANDUM RANCHO PALOS VERDES
To: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: FINANCE DIRECTOR
DATE JULY 1, 1997
SUBJECT: LOAN AGREEMENT BETWEEN THE CITY AND RDA FOR FISCAL
YEAR 1996-97 AND FISCAL YEAR 1997-98
Staff Coordinator: Matt Burton, Accounting Supervisor
RECOMMENDATION:
Authorize the Mayor and the City Clerk to execute the attached Loan Agreement between
the City and the Rancho Palos Verdes Redevelopment Agency. The proposed additional
loan of$350,000 will fund the Portuguese Bend dewatering project begun in FY 1996-97
111/ in the amount of $150,000 and other projects which are included in the budget for FY
1997-98 in the amount of$200,000.
BACKGROUND:
On January 29, 1991, the RDA Board entered into a loan agreement with the City of
Rancho Palos Verdes to fund RDA activities in the Redevelopment area. This agreement
states that the loan shall mature concurrent with the close of the fiscal year. The purpose
of the annual maturity date is to provide for consolidation of previous year loan activity
with any current year repayments or advances. The attached proposed Loan Agreement
includes a history of loan advances and repayments between the City and the Portuguese
Bend fund of the RDA.
On July 25, 1991, the County of Los Angeles issued $10 million in County Improvement
District Bonds as part of the Horan Settlement. A portion of these funds are available to
fund activities in Abalone Cove. However, in the case of Portuguese Bend, the RDA does
not currently have the resources to fund necessary projects; therefore, loans from the City
are necessary.
The interest rate charged on the loan is equal to the rate earned by the City on its LAIF
deposits plus three percent. Currently, this would yield an interest rate of approximately
1110 8.6%.
•
Portuguese Bend Fund Financing Requirements
Resolution No. RDA 97-07 authorizing
On May6, 1997, the Agency's Board adopted .
construction of six dewatering wells
additional expenditures of$150,000 for the immediate
p
in the Portuguese Bend landslide area. It is necessary for the Agency to borrow $150,000
from the City to complete this project.
Based upon Staffs analysis, $200,000 will be required to fund landslide abatement
• activities Bend area in fiscal year 1997-98. The proposed
projects and of the Portuguese ,
has been approved by City Council as a part of the City's
loan in the amount of$200,000 pp
budget for fiscal year 1997-98.
In the event the Board approves
the additional $150,000 loan for fiscal year 1996-97, the
total principal loan amount to the Portuguese Bend fund will be $3,170,552 as of June 30,
1997. With accrued interest of $1,664,303, the total amount owed by the Portuguese
Bend fund will be $4,834,855 as of June 30, 1997.
In the event the Board approves the additional $200,000 loan for fiscal year 1997-98 and
the $150,000 loan described in the paragraph above, the total principal loan amount to the
Portuguese Bend fund will be $3,370,552 as of June 30, 1998. If interest rates remain
4.
st will be $2,087,984,constant, the accrued intere and the total amount owed by the
Portuguese Bend fund will be $5,458,536 as of June 30, 1998.
Respectfully
submitted, Reviewed:
Dennis McLean Paul D. Bussey
Finance Director City Manager
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