AgdaPkt 2006-10-09 - Laserfiche WebLink

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8A Page 1 ��PORT To the Honorabie Mayor and City Council Fronn the �oun�'r! S�ub-Commi�tee o� tt�e Police Activities Leagu� Octabe�9, 2006 Subject Potice Ac�ivities League (PAl.) Loan Repayment Plan Recommendatian City Council authorize the Festrucfiure of the payback af the City's loan of$750,000 to PAL; mayor to appoint an ad hoc committee to meet biannualiy with the PAL Board of Directors to review PAL's annual budget and summary of programs; and expiore a coilabaration between #he City's rinance Department and PAL to assist with the d�velopment of PAL's#inancial reports. Background In �ekaruary 2006 Counci� approved a plan autharizing the City to pay off PAL's outstanding building loan of 1.5 million doliars, and allowing PAL to repay the Ci#y 50% ($750,000) of the 1.5 miliion over the course of 22 years. The repayment plan incluc4ed $925,004 payments due on January 1, 2007, and January 1, 2008, followed by payments of$2,100 per month for 20 years. Over the past several manths, the PAL Board of Directors examined the repayment plan and conc{uded that payment of$250,000 in the first two years af the ptan wauld severely impact PAL's ability to sustain and increase its programs for the youth of Redwood City. Over the past few months, PAL directors have met with the Council's ad-hoc PAL s�b- committee of Vice Mayor Rosanne Foust and Counci! Member Jim Hartnett to discuss a restructuring of the repayment plan. As a result, the sub-committee recommends that the repayment pian he reslruetured in the following manner: PAL will provide an initial payment of$50,000 on January 1, 2007. Subsequent payments of$�52,500 will be made quarteriy begiri��ing on January 1, 2008. The final qua�terly payment will be made on October 1, 2021. This plan will provide repayment of$10fl,000 over the first two years; it will also accelerate the repayment of the loan from 22 years down to 15 years. Prior to the City paying off PAL's origina� 1.5 rr�illion dol(ar loan, PAL w�s burdened by the interest payments of approximately$9,000 p�r month. The payments made it nearly impossible for PAL to maintain its existing progtams. The rest�ucturing of the loan allowed PAL to build capacity in its existing programs and to collaborate with other agencies to offer more programs for the City's youth (see Attachment A). The restructured loan also allawed the PAL staff and Board of Directors the tirne to focus on improving the structure of the organizatian. With the assistance of the Harvard Business School Community Partners, PAL was able to implement a strategic financial plan and recrui#essential board members.