HomeMy WebLinkAboutAgenda Statement 1978/08/15 Item 07. CITY OF CHULA VISTA
' ~ Item No. ~
COUNCIL AGENDA STATEMENT
For meeting of 8/15/78
ITEM TITLE Resolution~.~:2.9 Approving Agreement With Crocker Bank for Services
// Relative to the City's Rehabilitation Program for
Mobile Living Units
SUBMITTED BY Community Development Director
ITEM EXPLANATION (4/5TH'S VOTE REQUIRED YES. NO X )
As the previous agenda item explained, the City's rehabilitation program includes funding
for mobile living units. Crocker Bank has submitted a proposal to finance the program
which is similar to the residential rehabilitation program. Under the agreement, Crocker
will commit $250,000 for property improvement loans and the City will deposit $100,000
of Block Grant funds in an interest bearing account with the bank. Maximum term would
be 15 years with loans made to 80% of the selling price on replacement loans (mobile units)
and 80% of appraised retail value on rehabilitated units. Loans will be made at 3% and
7% to eligible residents with an interest subsidy of 4% and 8% paid with Block Grant funds.
As~described in the credit agreement, the City would be able to make loans both to
rehabilitate mobilehomes and to replace those beyond repair. The rehabilitation portion
of the program has received approval from the Department of Housing & Urban Development
(HUD), however, there has been a delay in the approval of the mobilehome replacement
program. The Los Angeles Area Office of HUD has given its support to the program but since
this is a new concept in rehabilitation, final approval must come from Washington, D.C.
Therefore, staff is recommending approval of the agreement with the implementation of
the replacement program delayed until final approval is received from HUD.
Agreement Resolution
ray c:~~~.)
EXHIBITS -
Ordinance
Plat Notification List
Other E xh ib it "A" ENVIRONMENTAL DOCUMENT: Attached Submitted on
FINANCIAL IMPACT
Funds are available and have been appropriated in account 632-6320-BG54.
STAFF RECOMMENDATION
Adopt resolution.
BOARD/COMMISSION RECOMMENDATION
COUNCIL ACTION
~~~~
A P P R O V E D
}~~, t7~
City ~.Jt:.^.ri it
og
C{ California
., ~. ~~~/7~ .....
h~,. ,e:~~ __
TYPICAL MOBILEHOME REHABILITATION LOAN
~EXH I~BIT "A"
Loan Amount: $5,000 Term: Ten years
Rate to Borrower: 3% Interest Subsidy: 8%
Block Grant Interest Subsidy Payment $ 785.50
10% Loss Reserve Provision 500.00
TOTAL TO BANK $1,285.50
Bank loans $5,000 of its own funds and City, with Block Grant funds, pays
interest subsidy of $785.50. The Loan Loss Provision is held in a special
bank account and is adjusted on an annual basis. Effective leverage is
3.9 to 1.
Under. the interest subsidy approach, the bank would foreclose on the property
in the event of default by the borrower. If the resultant sale is not suf-
ficient to retire the debt, the Block Grant Reserve would be obligated for
the outstanding balance of the loan which is not recovered. These funds
would come from the Loss Reserve Provision and are not a liability of the
c;ty.
Form No. F-229
12/73
CERTIFICATE OF CITY/DIRECTOR OF FINANCE
Certification of Unappropriated Balance
I HEREBY CERTIFY that the money required for the
appropriation of funds for the purpose set forth in the attached
resolution is available in the Treasury, or is anticipated to
come into the Treasury, and is otherwise unappropriated.
Amount $ Fund
Purpose
Bidder
Director of Finance
The City of Chula Vista
Date
By
Certification of Unencumbered Balance
I HEREBY CERTIFY that the indebtedness and obligation
to be incurred by the contract or agreement authorized by the
attached resolution can be incurred without the violation of any
of the provisions of the Charter of the City of Chula Vista, or
the Constitution or the laws of the State of California, that
sufficient monies have been appropriated for the purpose of said
contract, that sufficient monies to meet the obligations of the
contract are actually in the Treasury, or are anticipated to come
into the Treasury to the credit of the appropriation from which
the same are to be drawn, and that said monies now actually in
the Treasury, together with the monies anticipated to come into
the Treasury, to the credit of said appropriation are otherwise
unencumbered.
Amount Not to Exceed $ 100,000.00
632 6320 BG 54
Date 8/15/78
Fund Block Grant
By
°~~ ..
Director of Finance
The City of Chula Vista
Dept./Activity Block Grant
Purpose City's Rehabilitation Program for Mobile Living Units
Bidder N/A
Certificate No. 5
9z2