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HomeMy WebLinkAbout1998-03-24 - AGENDA REPORTS - RESO 98 34 PAYBACK METHOD (2)AGENDA REPORT City Manager Approval: Item to be presented by: CONSENT CALENDAR DATE: March 24, 198 SUBJECT: RESOLUTION NO. 98-34 -CITY COUNCIL FORMALLY ADOPTING THE PAYBACK METHOD FOR THE LOAN FROM THE CITY TO THE SANTA CLARITA REDEVELOPMENT AGENCY DEPARTMENT: Santa Clarita Redevelopment Agency RECOMMENDED ACTION Adopt Resolution No. 98-34, formally adopting the payback method and interest rate for the loan from the City to the Santa Clarita Redevelopment Agency. At its meeting of December 9, 1997, the City Council approved the payback method for the loan from the City to the Agency. The Council/Agency directed staff to prepare the formal resolutions and return to Council/Agency for adoption. Since 1994, the City has loaned the Agency $2,000,000 for costs associated with the creation of a project area. The payback method includes an interest rate of the prime rate minus one percent retroactive back to 1994. Loan payments will begin in the year 2002, with 25% of the increment received each year used to payoff the loan. FISCAL IMPACT Payback of loan to General Fund. Resolution No. 98-34 GEA: a hHv%a'032499.3p Adopted: ��y RESOLUTION NO. 98-34 A RESOLUTION OF THE CITY OF SANTA CLARITA CITY COUNCIL APPROVING THE PAYBACK METHOD FOR THE LOAN FROM THE CITY TO THE SANTA CLARITA REDEVELOPMENT AGENCY WHEREAS, the City of Santa Clarita (the "City") loaned the Santa Clarita Redevelopment Agency (the "Agency") a total of $2,000,000 in three separate installments to cover costs associated with the creation of a project area. The promissory notes approved in conjunction with each loan provided that the interest rate shall be the prime rate plus one percent. WHEREAS, the Agency and the City have the legal authority to amend or renegotiate provisions of the loans, including the promissory notes issued in conjunction with said loans. WHEREAS, a redevelopment plan fora redevelopment project known the Newhall Redevelopment Project (the "Project") has been adopted and approved by Ordinance No. 97- 12 of the City adopted on July 8, 1997 (the "Plan") and all requirements of law for and precedent to adoption and approval of the Plan have been complied with; and WHEREAS, the Newhall Redevelopment Committee reviewed and recommended approval of a loan payback method that provides as follows: 1) a reduction in interest rate from the prime rate plus one percent to the prime rate minus one percent retroactive to 1994, 2) loan payments will begin in the year 2002 and 3) 25% of the tax increment received each year beginning in the year 2002 will be used to payoff the loan. WHEREAS, the Redevelopment Agency/City Council at its meeting of December 9, 1997, adopted the Redevelopment Committee's recommended payback method directing staff to prepare the formal resolutions for consideration. NOW, THEREFORE, be it resolved by the City Council of the City of Santa Clarita as follows: Section 1. The City Council approves the reduction in interest rate from the prime plus one percent to the prime rate minus one percent retroactive to 1994, which amends the interest rate included in the promissory notes for the following resolutions: Resolution No. RDA 94-4, RDA 95-5, and RDA 96-2. Section 2. The City Council agrees to allow the Agency to initiate payments on the loan beginning in the year 2002. Section 3. The City Council agrees to allow the Agency to use 25% of the tax increment received each year, beginning in the year 2002, to make payments on the loan (ceasing upon payoff of the loan). Section 4. The Secretary shall certify to the passage and adoption of this resolution, and it shall thereupon take effect and be in force. PASSED, APPROVED AND ADOPTED this day of , 19_ MAYOR ATTEST: CITY CLERK STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) § CITY OF SANTA CLARITA ) I, Sharon L. Dawson, CMC, City Clerk of the City of Santa Clarita, do hereby certify that the foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the day of , 19_ by the following vote of Council: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: CITY CLERK GEA: n.1lr&\m99834."