HomeMy WebLinkAboutAgenda Statement 1979/07/10 Item 07. - CITY OF CHULA VISTA ..
COUNCIL AGENDA STATEMENT Item No. ~
For meeting of 7/10/79
ITEM TITLE Resolution g1p73 Approving Agreements with Bank of America for Services
Relative to the City's Housing Improvement Program (CHIP)
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SUBMITTED BY Community Development Director ,~~p''S,
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ITEM EXPLANATION (4/5TH'S VOTE REQUIRED YES. NO X )
The City's CHIP program has been a major success in revitalizing the Norman Park
and Feaster School Neighborhoods. This program is operated through the cooperation
of Crocker National Bank and Bank of America. Both banks provide expertise in
financing and processing loans. Bank of America has redesigned its program to
offer better financial leveraging techniques and lower interest rates than pre-
vously contracted for.
The first new agreement (Property Rehabilitation Agreement - One Note Form) proposed
by Bank of America provides fora 70% matching contribution from Block Grants on
7% loans and a new 3% loan rate. Previously, the bank required a 100% matching
contribution and a low-interest rate of 3-3/4%. The new agreement will cost less
to both the City and borrower.
The bank has also developed an Interest Subsidy Loan program. This program is
similar to the Crocker Bank program currently in operation. The Crocker Bank pro-
gram has been extremely successful with an average leveraging ratio of $5 in bank
funds to $1 in Block Grant funds. The major differences between the two bank pro-
grams is that Bank of America does not require a Block Grant balance to be retained
at the bank other than the amount of the interest subsidy and Bank of America does
not require a loan loss reserve. With this year's expansion of the rehabilitation
program, staff believes that an agreement with both banking institutions will pro-
vide additional flexibility and choice, and create a more competitive program.
JTS:as
Agreement X
Resolution X
EXHIBITS -
Ordinance
Plat Notification List
Other ENVIRONMENTAL DOCUMENT: Attached Submitted on
FINANCIAL IMPACT
Funds are available and have been appropriated in account 633-6330-BG75.
STAFF RECOMMENDATION
Adopt resolution.
BOARD/COMMISSION RECOMMENDATION
COUNCIL ACTION
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