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7.3.A. - Page 3 <br /> Program Manager. The loan agreement contains the terms of the contract <br /> between the Owner /borrower, including the loan forgiveness and rent <br /> stabilization provisions. The promissory note is the instrument reciting the <br /> promise to repay the amount loaned unless the loan is forgiven as provided in <br /> the loan agreement. The deed of trust creates a lien against the property where <br /> the automatic sprinkler system has been installed as security for the Program <br /> Loan. <br /> • An eligible Owner's priority to receive a Program Loan will depend upon their <br /> obtaining a Program Loan Commitment Letter from the Program Manager. A <br /> Program Loan Commitment Letter will only be issued if the Program Manager <br /> determines the proposed cost for design, purchase and /or installation of the <br /> automatic sprinkler system is satisfactory and eligible for reimbursement <br /> through a Program Loan, and determines adequate Program Loan Funds are <br /> available. <br /> • The Program Loan Commitment Letter will assure the applicant that Program <br /> Loan Funds will be reserved for their loan in the amount and for the length of <br /> time specified in the Program Loan Commitment Letter. <br /> • Unless directed otherwise by the City Council, if the City receives loan <br /> payments due to a breach of the agreed rent stabilization terms, all loan <br /> payments will be deposited back into the Program Loan Fund to be available for <br /> further Program Loans. <br /> ALTERNATIVES <br /> 1. Council may choose not to adopt the resolution or may make other changes. <br /> 2. The Council may choose to approve to adopt the resolution and add evaluation <br /> criteria and /or goals for the program. This criteria could help determine whether <br /> program components should be revised during the 6 -month Council review. <br /> FISCAL IMPACT <br /> Initial fiscal impact is $1.5 million dollars. The City Council may decide in its sole and <br /> unfettered discretion to not authorize this expenditure or to not authorize any additional <br /> funds to this program. <br /> ENVIRONMENTAL REVIEW <br /> Funding a loan program and /or loan forgiveness program is not a project under CEQA <br /> as defined in CEQA Guidelines, section 15378(b) (4), because the Fire Safety Program <br /> involves a government funding mechanism other governmental fiscal activities which do <br /> not involve any commitment to any specific project which may result in a potentially <br /> significant physical impact in the environment. This activity is also not a project under <br /> CEQA Guidelines, section 15378(b)(5) because organization or administrative activities <br /> of government such as funding a loan program will not result in direct or indirect <br /> physical changes in the environment. <br /> OAK #4832 - 4527 -1077 v2 <br /> Page 3 of 4 <br />