City of Pleasanton
12/11/2019 11:55:53 AM
12/11/2019 11:50:10 AM
CITY CLERK - TYPE
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THE CITY OF 15 <br /> CITY COUNCIL AGENDA REPORT <br /> pLEASA\TO\_ <br /> December 17, 2019 <br /> Finance <br /> Engineering <br /> TITLE: APPROVE LOAN AGREEMENT FOR $732,548 WITH THE HACIENDA <br /> BUSINESS PARK OWNERS ASSOCIATION TO RENOVATE <br /> LANDSCAPED AREAS IN THE HACIENDA BUSINESS PARK <br /> SUMMARY <br /> The Hacienda Business Park (HBP) is responsible for the maintenance and upkeep of <br /> the landscaped areas in HBP. The HBP and the City desire to renovate the landscaped <br /> areas but HBP lacks sufficient reserve funds to complete the project. Because the City <br /> has an interest in renovating HBP's landscaped areas, staff is recommending providing <br /> HBP a loan to complete the project. The loan would be made from City's Downtown <br /> and North Pleasanton CIP Reserve Fund. The loan would be repaid with interest <br /> levied at 2.72 percent. <br /> RECOMMENDATION <br /> 1. Approve the Hacienda Business Park Agreement (Agreement) and Promissory Note <br /> with the HBP and authorize the City Manager to execute the agreement in generally <br /> the form as attached. <br /> 2. Appropriate $732,548 from the Downtown and North Pleasanton CIP Reserve Fund <br /> (Fund 202) to fund the loan. <br /> FINANCIAL STATEMENT <br /> The proposed loan to the HBP is $732,548 at an annual interest rate of 2.72 percent <br /> would be provided from the City's Downtown and North Pleasanton CIP Reserve Fund <br /> (Fund 202). The proposed interest rate equals the mid-point between LAIF interest rate <br /> and the market interest rate for a ten year loan. The Downtown and North Pleasanton <br /> CIP Reserve Fund currently has an available balance of $3.7 million. <br /> There would be 120 monthly loan payments due on the first of each month commencing <br /> on January 1 , 2020. The loan would be fully repaid by January of 2030. The interest <br /> earnings from the loan would total $104,962 assuming HBP does not pay the loan off <br /> earlier. There would be no prepayment penalty. If the actual project cost exceeds <br /> $732,548 the HBP will cover the additional cost. The proposed loan is not secured by <br /> land and therefore, if there is a default, the loan would have to be enforced by taking <br /> legal action. <br /> 1 The Downtown and North Pleasanton Reserve Fund is comprised of unused bond proceeds from the North <br /> Pleasanton Improvement District. <br /> 1 <br />
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