1986-0715_BANK OF AMERICA_E7_Agenda ReportAGENDA ITEM
TO: Stephen B. Julian, City Manager
FROM: Thomas G. Merrell, Director
Community Planning and Development
SUBJECT: Contract Renewal - Bank of America:
Rehabilitation Program for Los Rios
SITUATION
July 15, 1986
Property
A. Background - As part of the implementation of the Los Rios
Precise Plan, the City established the Los Rios Home Improve-
ment Program in 1979. The program uses community development
block grant funds and includes low-interest loan and fix -up
grants to rehabilitate and restore homes in the Los Rios
area.
A contract with a banking institution to administer the loan
funds is executed each year. A previous contract with Bank
of America expired in August 1985 but was not renewed due to
changes in the new contract and increased interest rates.
Loss of staff and workload have delayed investigation of loan
programs through other banks for lower interest rates and
better financing terms; thus, a new contract has not yet been
negotiated.
In order to draw down funding for HCDBG programs, such as the
current painting program in the Los Rios area, the County
recommends that a contract with a banking institution be in
place. In order to avoid any further delays, staff recom-
mends approval of the Bank of America contract at this time.
The attached contract will be in effect until August 1987;
however, either party may terminate with six months notice.
During this period of time, the City may also negotiate with
other banking institutions for a low-interest loan program.
B. Summary and Recommendation - The City has maintained a Pro-
perty Rehabilitation Loan Program for the Los Rios area using
County and HCDBG funds since 1979. To comply with HCD and
County requirements for an executed contract with a bank,
staff recommends that the attached agreement with Bank of
America be renewed.
PUBLIC NOTIFICATION
Not applicable.
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Agenda Item -2- July 15, 1986
COMMUNITY REDEVELOPMENT AGENCY
Not applicable.
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 adminis-
trative 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.
ALTERNATE ACTIONS
1. Execute a renewal of the Property Rehabilitation Loan Agree-
ment with Bank of America.
2. Refer the renewal agreement to staff for further review.
RECOMMENDATION
By motion, approve the Property Rehabilitation Loan Agreement with
Bank of America and authorize the Mayor to execute the contract.
Respectfully submitted,
Thomas G. Merrell, Director
Community Planning and Development
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