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THE CITY OF 3 CITY COUNCIL AGENDA REPORT PLEASANTON. October 6, 2015 Housing Division TITLE: APPROVE FORGIVENESS OF $13,700 OF INTEREST ON 1993 HOUSING REHABILITATION PROGRAM LOAN PROVIDED TO BAY AREA COMMUNITY SERVICES (BACS) FOR DISABLED HOUSING FACILITY SUMMARY In 1993, a $27,893 a fifteen year deferred payment loan was provided to Bay Area Community Services (BAGS), a nonprofit agency, as part of a larger $390,000 funding package to acquire and rehabilitate housing in Pleasanton for disabled persons. This loan was developed by Alameda County acting as the City's agent and included 7% annual accrued simple interest if the loan was not repaid by 2008. BAGS now would like to repay the loan principal in full, but is requesting forgiveness of the interest (approximately $13,700). It was not the intent of the City to make a 49% profit and collect interest on this loan. Supporting special needs households through the original loan to BAGS, and current requested interest forgiveness, is in furtherance of the General Plan's Housing Element. Per City Council policy, Council approval is needed to write-off or forgive a receivable that exceeds $10,000. RECOMMENDATION Approve the forgiveness of interest totaling approximately $13,700 on the original $27,893 loan. FINANCIAL STATEMENT Forgiveness of the loan's interest would not have a direct fiscal impact on the City's budget, as such interest was not anticipated. When the full $27,893 principal is repaid, it will be returned to the Housing Rehabilitation Program to be used to assist other low- income Pleasanton residents.