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8 The maximum term for a loan will be 30 years. <br />• New department heads that would otherwise be eligible for housing assistance will be <br />ineligible if they already own a home in the Redwood City area. <br />• If the employee obtains a loan from the City, the property must be located within a <br />given distance from City Hall that is suitable given the responsibilities of the position <br />and the City's needs, as determined by the City Manager, concerning responses to <br />emergencies. The property must be within the corporate limits of Redwood City or the <br />Redwood City Elementary School District if housing assistance is provided in the form <br />of equity sharing. <br />• The employee must have at least 10% equity in the property. <br />• Equity sharing will be permitted. <br />• A maximum of $500,000 combined equity sharing and loan will be permitted. <br />• Loans will be administered by a third party institution. <br />• A maximum of $4,000 (pre -tax) relocation allowance will be permitted. <br />• Rental assistance — Up to $500 per month or 15% of initial monthly rent, whichever is <br />lower, will be permitted. Once rental assistance is triggered, no other form of housing <br />assistance will be provided. Said amount shall be included in the employee's taxable <br />earnings and will not be considered PERS compensable earnings. <br />• The property must be the employee's primary residence. <br />• Subleasing the property will be permitted only after separation from service. Any <br />damage occurring to the property will be the responsibility of the employee (former <br />employee). <br />• At the discretion of the City Manager, the loan may be in the form of a recurring (paid <br />bi- weekly through the City's payroll system) cash payment to the employee that is <br />intended to partially offset the interest expense of a market rate loan vs. the interest <br />expense of a loan provided by the City. Any such payments will be included in the <br />employee's taxable earnings and will not be considered PERS compensable earnings. <br />It is also recommended that the City Manager be delegated the authority to negotiate and <br />implement each housing assistance arrangement within the foregoing constraints. <br />Fiscal Impact <br />The cost of providing housing assistance will depend upon the arrangement agreed upon <br />by the City Manager and department head requesting this benefit. If the assistance is in <br />the form of a loan, the City will at a minimum earn the same rate of interest that the City is <br />earning on its investment portfolio. Alternatively, if the assistance is made through equity <br />sharing, the City will very likely earn a return on its investment at a rate greater than that <br />which the City would earn on its investments due to the likelihood that prices of local <br />residential real estate will appreciate at a much greater rate. Rental assistance will be an <br />additional cost to the City but staff believes that this option will not attract very much, if <br />any, interest from eligible employees. <br />Alternatives <br />The Council may elect not to offer this benefit. Doing so will likely result in a narrower pool <br />and less qualified candidates for vacant department head positions. <br />2 <br />