CDC - Item 3A - RCDC Note Payable to Low & Moderate Income Housing FundROSEMEAD COMMUNITY
DEVELOPMENT COMMISSION
STAFF REPORT
TO: HONORABLE CHAIRMAN AND COMMISSIONERS
FROM: JEFF STEWART, INTERIM EXECUTIVE DIRECTOR
DATE: APRIL 28, 2009
SUBJECT: ROSEMEAD COMMUNITY DEVELOPMENT COMMISSION (RCDC)
NOTE PAYABLE TO THE LOW & MODERATE INCOME HOUSING
FUND
SUMMARY
On October 1, 2008 the Governor signed budget trailer bill AB 1389 that includes a
$350 million Education Revenue Augmentation Fund (ERAF) shift from redevelopment
agencies to the State. The payments to the State are due by May 10, 2009 and
Rosemead's share of the shift is $297,178. As with past ERAF contributions, an agency
can borrow up to 50% of the contribution from its current year deposit into the Low and
Moderate Income Housing Fund (LMIHF) and repay the fund over 10 years.
Staff is requesting Commission approval to borrow $148,589 (50% of the total ERAF
contribution) from the LMIHF.
STAFF RECOMMENDATION
Staff recommends that the Commission:
Approve Resolution 2009-12 authorizing a loan from the LMIHF secured
by a Promissory Note with the terms listed below, and
Direct the Commission Chairman to execute the Promissory Note.
ANALYSIS
Inasmuch as the law allows the RCDC to borrow up to 50% of its ERAF contribution
from the current year RCDC tax increment transfer to the LMIHF, the following terms
are recommended for a loan from the LMIHF to the RCDC:
1.
Date:
May 9, 2009
2.
Principal:
$148,589
3.
Rate :
0.0% annually
4.
Term:
10 Years
-5.
Payment:
Principal due on May 8, 2019
ITEM NO. ~~A~
APPROVEDFOR COMMUNITY DEVELOPMENT COMMISSION AGENDA:
Community Development Commission Meeting
April 28, 2009
Also attached is the Promissory Note, the Repayment of Advance schedule and
Resolution No. 2009-12 authorizing the Promissory Note.
The LMIHF has idle cash sufficient to make the loan to RCDC without creating an
adverse impact on the fund. It is therefore recommended that the loan be executed.
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process.
Submitted by:
Steven Brisco
Finance Director
Attachments: (1) Promissory Note
(2) Repayment of Advance schedule
(3) Resolution No. 2009-12
ATTACHMENT 1
PROMISSORY NOTE
$148,589
Date: May 9, 2009
For value received, the undersigned Rosemead Community Development Commission
(the "Borrower"), at 8838 East Valley Boulevard, Rosemead, California 91770, promises
to pay to the order of the Low and Moderate Income Housing Fund, (the "Lender"), at
8838 East Valley Boulevard, Rosemead, California 91770, (or at such place as the Lender
may designate in writing) the sum of $148,589 without interest.
The accrued interest only shall be payable in annual installments of $0.00 beginning on
May 9, 2010, and continuing until May 9, 2019, (the "Due Date"), at which time the
remaining principal and interest shall be due in full.
THE BORROWER UNDERSTANDS THAT THE PAYMENT OF THE ABOVE
INSTALLMENT PAYMENTS MAY NOT FULLY AMORTIZE THE PRINCIPAL
BALANCE OF THE NOTE, AND THREFORE, A BALLOON PAYMENT MAY BE
DUE ON THE DUE DATE.
All payments on this Note shall be applied first in payment of accrued interest and any
remainder in payment of principal.
This Note shall be construed in accordance with the laws of the State of California.
Signed this day of , at 8838 East
Valley Boulevard, Rosemead, California 91770.
Borrower:
Rosemead Community Development Commission
By:
Margaret Clark, Chairperson
ATTACHMENT 2
Outstanding
Principal
5/9/2009 $ 148,589.00
5/9/2010
5/9/2011
5/9/2012
5/9/2013
5/9/2014
5/9/2015
5/9/2016
5/9/2017
5/9/2018
5/9/2019
CITY OF ROSEMEAD
Repayment of Advance
Principal
Payments
0.00%
Interest
Payments
Total
Payments
$ 148,589.00 - 148,589.00
$ 148,589.00 $ - $ 148,589.00
ATTACHMENT 3
RESOLUTION NO. 2009-12
RESOLUTION OF THE ROSEMEAD COMMUNITY DEVELOPMENT
COMMISSION (RHDC), CALIFORNIA AUTHORIZING THE EXECUTION OF
A PROMMISSORY NOTE IN THE AMOUNT OF $148,589 TO THE LOW AND
MODERATE INCOME HOUSING FUND
WHEREAS, On October 1, 2008 the Governor signed budget trailer bill AB
1389, and
WHEREAS, included in the bill was a required $350 million shift from local
redevelopment agencies to the State Education Revenue Augmentation Fund (ERAF),
and
WHEREAS, the RHDC's obligation to the ERAF fund is $297,178, and
WHEREAS, Half of the ERAF obligation can be borrowed from the Low and
Moderate Income Housing Fund's current year transfer from RHDC for payment to the
ERAF.
NOW THEREFORE, BE IT RESOLVED, that the Commission does authorize
the execution of a Promissory Note dated May 9, 2009 to the Low and Moderate Income
Housing Fund in the in the amount of $148.589 at an interest rate of 0.0% per annum for
a term of 10 years.
PASSED AND ADOPTED, by the Rosemead Community Development Commission,
County of Los Angeles, of the State of California on April 28, 2009.
(Chairman)
ATTEST:
(Commission Secretary)