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HomeMy WebLinkAbout1990-07-10 - AGENDA REPORTS - HOUSING ASSISTANCE LOAN (2)CONSENT CALENDAR DATE: July 10, 1990 AGENDA REPORT City Manager Appov Item to be presented by: Ken Pulskamy SUBJECT: AGREEMENT FOR HOUSING ASSISTANCE BETWEEN CITY AND PUBLIC WORKS DIRECTOR DEPARTMENT: City Manager BACKGROUND On June 26, 1990 the City Council authorized the City Manager to approve the Housing Assistance policy. The Director of Public Works is now requesting a loan of $50,000.00 which is consistant with this policy. The attached loan agreement authorizes execution of a $50,000.00 loan over a five-year period to be repaid at the annual rate of interest consistent with actual City investments. The loan is to be used toward the purchase of a residence within the present school district boundaries. RECOMMENDATION That the City Council approve Agreement for housing assistance. ATTACHMENTS Loan Agreement Rider to Deed of Trust Promissory Note APPROVED Agendaltem: ZL 0 0 LOAN AGREEMENT THIS AGREEMENT is made and entered into as of the day of , 1990, by and between the City of Santa Clarita ("City") and John E. Medina ("Medina"), with respect to the following facts: Recitals A. As part of Medina's employment as Director of Public Works, the City has agreed to lend Medina the sum of $50,000.00 to enable him to purchase real property within the City of Santa Clarita to be used as his principal residence; and B. The parties hereto wish to memorialize their understandings with respect to the disbursements of the loan funds and certain other terms of the loan not incorporated into the note evidencing the loan or the deed of trust securing it. NOW, THEREFORE, it is agreed as follows: 1. City agrees to lend to Medina the sum of $50,000.00 to enable Medina to purchase a residence in the City of Santa Clarita. The loan will be evidenced by a promissory note in the form attached hereto as Exhibit A, in the principal amount of $50,000.00. The promissory note shall be secured by a second deed of trust encumbering the real property in the City of Santa Clarita to be used by Medina as his principal residence, which deed of trust will be in the form attached hereto as Exhibit B. Said deed of trust shall be recorded in the county recorder's office of the County of Los Angeles. 2. The term of the loan to Medina shall be for five (5) years; provided, however, City and Medina agree that prior to the expiration of the term of the loan,. the City Manager of the City shall have the power to extend the term of the loan by one (1) year. The City shall also have the option to accelerate the due date of the loan upon the occurrence of any of the following events: (a) Medina's failure to use the subject property .as Medina's principal residence; or (b) The termination of Medina's employment with the City. 3. The City shall .deliver to the escrow holder the loan proceeds in the sum of $50,000.00 following (i) the opening of escrow for the real property in the City of Santa Clarita selected by Medina as his principal residence, and (ii) upon deposit of the promissory note and deed of trust described above. The City shall instruct the escrow holder that the funds shall be disbursed upon the close of the escrow. 4. Medina agrees that he will occupy said residence in the City of Santa Clarita as his primary residence during the term of the loan. 5. This agreement constitutes the sole understanding of the parties hereto with respect to matters set forth herein, and may not be ,amended, altered, or modified except by an instrument in writing signed by the parties hereto. Nothing contained herein shall be construed as constituting a contract of employment between Medina and the City. IN WITNESS WHEREOF, the parties hereto have entered into this agreement as of the day of , 1990. CITY OF SANTA CLARITA By ATTEST: City Clerk • 0 - 2 - Mayor PROMISSORY NOTE SECURED BY DEED OF TRUST $50,000.00 Santa Clarita, California 1990 FOR VALUE RECEIVED, the undersigned, JOHN E. MEDINA, ("Maker"), promises to pay to the order of CITY OF SANTA CLARITA ("Holder"), at Santa Clarita, California, without deduction or offset, the sum of FIFTY THOUSAND AND 00/100 DOLLARS ($50,000.00), together with interest on the unpaid principal balance at the rate of percent (_%) per annum. All unpaid interest and principal shall be due and payable on or before the date that is five (5) years after the date hereof; provided, however, the City manager of the City of Santa Clarita shall have the power to extend the due' date hereof by one (1) additional year, which optionmay be exercised by such City Manager by delivering written notice thereof to Maker. Maker may prepay, without penalty or premium, any amount of the principal or interest accruing under this Note prior to the due date thereof. Any amounts so paid shall first be credited against accrued interest and the balance shall be credited against principal. . Maker agrees that the interest rate on' this Note shall be equivalent to the rate of return of the State Local Agency Investment Fund (L.A.I.F.). ,The initial interest rate provided above is established according to the most recent monthly L.A.I.F. report prior to funding the loan and shall be adjusted annually upon the anniversary of funding the loan to be equivalent to the then most recent monthly L.A.I.F. report. Should default be made by Maker in performance of any obligation of Maker hereunder or as contained in the Deed of Trust and Assignment of Rents ("Deed of Trust") securing payment of this Note, and if such default is not cured within 30 days after written notice of such default, then, at Holder's option, any indebtedness hereunder, irrespective of the due date hereof, shall become due and payable on the date which is 90 days after the date Holder delivers thereof to Maker written notice of Holder's election to accelerate of this Note. 0 Moreover, notwithstanding the foregoing, if Maker fails to . occupy as Maker's principal residence the property that is the collateral for the Deed of Trust, or if Maker's employment with the City of Santa Clarita shall terminate for any reason prior to the due date hereof, Holder shall have the right, at its option to declare any indebtedness hereunder, 'irrespective of the due date hereof, due and payable on the date which is 90 days after the date Holder delivers written notice thereof to Maker. To this end, the Deed of Trust provides as follows: This Note and the Deed of Trust by which it is secured shall be governed by and construed in accordance with the laws of. the State of California. Maker waives presentment for payment, demand, protest, notice of protest -and notice of dishonor. If any sum due under this Note is not paid when due, the undersigned hereby covenants and agrees to pay all costs and expenses of collection, whether by suit or otherwise, at any time or from time to time incurred, including without limitation reasonable attorney's fees. John E. Medina "Maker" • • r RIDER TO DEED OF TRUST If Trustor shall fail at any time to occupy the subject property as Trustor's principal residence, or if Trustor's employment with the Beneficiary shall terminate or fail to perform any other obligation under this deed of trust or note secured hereby and to cure such default within 30 days after wri-tten notice thereof from Beneficiary, then Beneficiary shall have the right, hereby, irrespective of the maturity date specified in any note evidencing the same, due and payable on the date which is 90 days after the date Beneficiary delivers to Trustor written notice of Beneficiary's election to accelerate such indebtedness or obligations. IN WITNESS WHEREOF, Trustor has executed this Rider as of the day and year first above written. John E. Medina STATE OF CALIFORNIA ) ss. COUNTY OF LOS ANGELES ) On this day of , 1990, before me, the undersigned, a Notary Public in and for said County and State, personally appeared John E. Medina, known to me to be the person whose name is subscribed to within the instrument, and acknowledged that he executed the same. WITNESS my hand and official seal. Notary. Public I