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MOORPARK CITY COUNCIL Az
AGENDA REPORT
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TO: Honorable City Council
FROM: Cindy Borchard, Administrative Services Director
DATE: June 2, 2004 (City Council Meeting of June 16, 2004)
SUBJECT: Consider Loan Agreement between the City of Moorpark
and the Moorpark Redevelopment Agency
BACKGROUND
Community Development Law allows Redevelopment Agencies to
borrow funds from the City in support of the Agency's mission
and goals. Several times since the creation of the Moorpark
Redevelopment Agency, the City has loaned funds to the Agency
for specific purposes. All loans have been repaid, or will be
repaid by June 30, 2004.
DISCUSSION
In the coming year, the Agency has budgeted approximately $6.1
million in expenditures, including $1.6 million for capital
improvements. While the Agency's annual revenues and existing
fund balances are sufficient to finance these expenditures, it
is our practice for all expenditures to be paid by the City,
then these "advances" are repaid by the Agency. This is a
common practice intended to comply with state laws that require
Redevelopment Agencies to incur debt.
Staff is recommending a loan from the City to the Agency in the
amount of $5,000,000 as an advance for anticipated operating and
capital expenditures for the coming year. The Agency would be
charged a rate equal to the rate earned on investments (the
"LAIF" rate) plus 1%; currently this would be approximately
2.5 %. The loan would be provided by the City General Fund,
which currently has sufficient cash available, and would be due
no later than June 30, 2005.
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Honorable City Council
June 16, 2004
Page 2
STAFF RECOMMENDATION (Roll Call Vote
Adopt Resolution No. 2004- , approving a Loan Agreement with
the Moorpark Redevelopment Agency.
Attachment: Resolution No. 2004 -
Loan Agreement
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RESOLUTION 2004-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF MOORPARK, CALIFORNIA, ADOPTING A LOAN
AGREEMENT BETWEEN THE CITY OF MOORPARK AND
THE MOORPARK REDEVELOPMENT AGENCY
WHEREAS, the City of Moorpark has agreed to advance funds
to the Moorpark Redevelopment Agency in accordance with the
terms of a Loan Agreement dated July 1, 2004; and
WHEREAS, the Moorpark Redevelopment Agency has agreed to
accept the terms and conditions of the Loan Agreement dated July
1, 2004.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF MOORPARK
DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. The Loan Agreement between the City of Moorpark
and the Moorpark Redevelopment Agency dated July 1, 2004, and
attached as Exhibit "A" to this resolution, is hereby adopted.
SECTION 2. The City Clerk shall certify to the adoption of
this resolution and shall cause a certified resolution to be
filed in the book of original Resolutions.
PASSED AND ADOPTED this 16th day of June, 2004.
Patrick Hunter, Mayor
ATTEST:
Deborah S. Traffenstedt, City Clerk
Attachment: Exhibit "A"
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EXHIBIT "A"
LOAN AGREEMENT
THIS LOAN AGREEMENT is entered into this 1st day of July, 2004,
by and between the City of Moorpark ( "City ") and the Moorpark
Redevelopment Agency ( "Agency ").
RECITALS
WHEREAS, the Agency was created by Ordinance 87, adopted by
the City Council on March 18, 1987, for the purpose of
eliminating blighted conditions within specified project areas;
and
WHEREAS, in support of its mission, the Agency is
developing and implementing plans to acquire and construct
certain public facilities; and
WHEREAS, the Agency has determined that, in order to
undertake this redevelopment project, temporary financial
assistance in the form of a loan is required from the City of
Moorpark; and
WHEREAS, Section 33600 et. seq. of the California Community
Redevelopment Law authorizes the Agency to borrow money or
accept financial or other assistance from the City.
COVENANTS
NOW, THEREFORE, THE CITY AND AGENCY AGREE AS FOLLOWS:
SECTION 1. Amount and Use of Loan. The City, from its
General Fund, will advance to the Agency the amount of
$5,000,000 (five million dollars). Agency agrees to use such
loan proceeds only for those purposes set forth in the Health
and Safety Code and approved by the Agency.
SECTION 2. Repayment of Funds. The Agency will repay this
loan, both principal and interest, in full on or before June 30,
2005, unless extended by amendment to this Agreement.
SECTION 3. Interest Payment. This loan will bear interest
at a rate equivalent to the rate earned by City investments in
the Local Agency Investment Fund, plus one percent.
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Loan Agreement, Page 2
July 1, 2004
SECTION 4. Obligation Constitutes Indebtedness. This loan
agreement shall constitute an obligation and debt of the Agency
to use all available increment revenue to repay the City. Such
indebtedness shall be subordinate to any and all other Agency
indebtedness incurred by the Agency, including indebtedness
incurred through the issuance of tax allocation notes or bonds
or any other bonds of the Agency.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
MOORPARK REDEVELOPMENT AGENCY CITY OF MOORPARK
Patrick Hunter, Chair
ATTEST:
Deborah S. Traffenstedt,
Agency Secretary
Steven Kueny, City Manager
Deborah S. Traffenstedt,
City Clerk
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