19910115 RDA SR Loan Agreement between Agency and City for Funds Advanced prior to June 30, 1990 •
/3Jf
a,./44.41-1-4;&
1111 406- r
1)
MEMORANDUM RANCHC -
,p 2,
TO: Redevelopment Agency Board of Directors
--- --- -- - --� -----T
FROM: Mark A. Rohlof f, Deputy Executive Director---
• -- --- -
DATE: January 15, 1991 - ---- - _- T
Loan Agreement Between Agency and City—for—F.. • , .
. - •
SUBJECT'
Prior to June 30, 1990 /
d de / Agency Sao,.
RECOMMENDATION
Authorize the Agency Chairperson and Agency Secretary to execute
the attached Loan Agreement between the Redevelopment Agency and
the City of Rancho Palos Verdes for funds advanced to Agency
through June 30, 1990.
BACKGROUND
On June 20, 1985, the Agency entered into an agreement with the
City whereby the City loaned the Agency $282,500 to assist the
Agency in landslide abatement activities in the Redevelopment
Project Area. Since that time, the Agency has used various funding
sources, including state grants, Community Development Block Grant
funds, developer contributions, and County advances, to finance
such activities. These cumulative sources, however, have not been
adequate to fund all activities of the Agency. City funds have
been used to cover the gap not funded with available resources.
Staff has worked with independent auditors to determine the actual
amount of funds advanced to the Agency through June 30, 1990. The
total outstanding amount of principal and accrued interest owed the
City as of June 30, 1990 is $1,479,484. Because $282,500 of this
amount has already been formally loaned as- shown above, a loan
agreement in the amount of $1,193,984 is appropriate to acknowledge
the additional indebtedness of the Agency to the City.
Because this loan agreement is being proposed after City funds have
already been spent by the Agency, approval of this loan agreement
does not necessarily indicate concurrence with previous decisions
regarding such expenditures. Approval of this loan agreement will,
however, enable the City to legally bind the Agency to repay its
indebtedness to the City once funds are avilable.
FISCAL IMPACT
Approval of this loan agreement will place the Agency's outstanding
principal and accrued interest owed to the City at $1,479,484. As
stated in the loan agreement, the Agency may repay the loan from
COFES :
•v •
411Loan Agreement - Up to 6/30/90
January 15, 1991
Page 2
any legally available monies of the Agency. It is anticipated that
this would occur when tax increment is sufficient to meet both the
outstanding debt of the Agency at that time, as well as repay the
City for these advances. The impact of the Agency's financial
condition on the City's finances is addressed in the City staff
report regarding the City's loan to the RDA.
ALTERNATIVE
1. Request City to consider funds previously advanced as a grant
without obligation to repay.
Respectfully Submitted,
AY,416/r
Mark A. Rohloff
Deputy Executive Director
Reviewed:
Paul D. Busse
Executive Director
Attachment: Loan Agreement