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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. 4Y.u1i '�'yp� i.. .. e .� "y5-... l,. l.d6d �I .•C �AQW':�f 0 I ' 1 E 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 TGM:NE:BF:nb