AgdaPkt 2013-05-06 - Laserfiche WebLink

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6.2.A. - Page 1 RE PO RT To the Honorable Mayor and City Council From the Cit Mana er May 6, 2013 SUBJECT Parking Fund Loan Extension RECOMMENDATION Adopt, by resolution, an amendment to the Parking Fund loan agreement, extending by ten years the repayment term, requiring that principal be repaid by June 30, 2023. BACKGROUND In June 1993, the City Council adopted Resolution No. 12006 which approved a transfer of City funds via a loan in the amount of $1.3 million from the City's Civic Construction Fund (later merged into the Capital Outlay Fund) to the City's Parking Fund to assist in the financing and construction of the City's parking facility at 755 Marshall Street (Marshall Street garage). The loan's initial terms required that the Parking Fund make equal annual installment payments of principal and interest until June 30, 2013, when principal was to have been repaid. The interest rate on this loan is currently 0.30%, the rate the City earns on its funds invested in the State of California's Local Agency Investment Fund (LAIF). In December 2003, the City Council adopted Resolution No. 14563 which amended the loan terms to allow the Parking Fund to make interest only payments until June 30, 2013, at which time the principal would have to be repaid in full. ANALYSIS Staff has reviewed the parking fund balances and has determined there are not sufficient funds to pay off the principal of $1.3 million by June 30, 2013. This proposed amendment of Resolution No. 12006 will extend the repayment period to June 30, 2023. Council Finance Committee The proposed extension of the due date of this loan was discussed with the Council Finance Committee (Council Members Jeff Ira, lan Bain, and John Seybert) at their February 25, 2013 meeting. The Committee approved the Finance Director's recommendation to extend the due date until June 30, 2023 and to present this recommendation to the full Council for consideration. ALTERNATIVES The Council may reject staff's recommendation to amend the terms of this loan. Doing so will cause both the Capital Outlay Fund and Parking Fund to be out of compliance with the terms of the loan agreement.