1984-0821_BANK OF AMERICA_J2d_Agenda ReportAGENDA ITEM August 21, 1984
TO: Stephen B. Julian, City Manager
FROM: Thomas G. Merrell, Director
Community Planning and Development
SUBJECT: Contract Renewal - Bank of America: Property
Rehabilitation Loan Program for Los Rios
SITUATION
A. Background
As part of the implementation of the Los Rios Precise Plan,
the City established the Los Rios Home Improvement Program
in 1979. The program uses community development block grant
funds and includes low-interest loans and fix -up grants to
rehabilitate and restore homes in the Los Rios area.
On August 16, 1983, the City Council approved a Housing Reha-
bilitation Loan Program with Bank of America. The agreement
expires during August unless extended by the City Council.
Two changes were made in the new contract, both of which
could affect some borrowers. The lowest loan rate was
raised from 3% to 3.5%, while the 4% and 8% loan rates
remained unchanged. In addition, the one-time cost for
processing a deferred payment loan (a zero interest loan)
was doubled to a minimum of $75 and a maximum of $150.
In all other respects, the new contract is identical to
the previous one.
B. Summary and Recommendation
For one year, the City has maintained a Property Rehabili-
tation Loan Program for the Los Rios area with Bank of
America using County -administered HCDBG funds. To date,
two loans have been made and several are pending.
To meet future loan needs, staff recommends that the
agreement with Bank of America be renewed for one year.
COMMISSION/BOARD REVIEW, RECOMMENDATION
Not applicable.
FINANCIAL CONSIDERATIONS
Commensurate with our contract with Orange County Housing and
Community Development, the City has agreed to absorb all
administrative costs associated with the HCDBG program. All
costs will be charged to the Redevelopment Agency, with Planning
staff time drawn from Account No. 01-4310. jo�aj
FOR CITY COUNCIL AGENDA .. ...
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Agenda Item -2- August 21, 1984
Staff has reviewed the aforementioned changes in the new contract
and has determined that they will have no substantial impact
on the loan program.
ALTERNATE ACTIONS
1. Execute a renewal of the Property Rehabilitation Loan
Agreement for one year with Bank of America.
2. Refer the renewal agreement to staff for further review.
RECOMMENDATION
By motion, approve the renewal of the Property Rehabilitation
Loan Agreement with Bank of America for one year, and authorize
the Mayor to execute the contract agreement.
Respectfully submitted,
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Thomas G. Merrell, Director
Community Planning and Development
TGM:BH: jtb
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