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Home My WebLink AboutCC RESO 2010-140 Five-Year Loan from Sewer Fund Undesignated Fund Balance FY 2010-2011 Street Resurfacing Improvements ProgramRESOLUTION NO. 2010 — 140 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING A FIVE-YEAR LOAN FROM SEWER FUND UNDESIGNATED FUND BALANCE IN THE AMOUNT OF $1,500,000 TO BE REPAID WITH TAX INCREMENT FUNDS AND TRANSNET FUNDS AT AN INTEREST RATE OF 0.75% AND IS SECURED BY THE GENERAL FUND TO PROVIDE ADVANCED FUNDING FOR THE FISCAL YEAR 2010-2011 STREET RESURFACING IMPROVEMENTS PROGRAM WHEREAS, the City of National City has an on -going Street Resurfacing Program that includes repairs of curbs, gutters, sidewalks, driveways, pedestrian crossings, and provides traffic stripping and signage; and WHEREAS, the City Engineering Division desires to implement a Street Resurfacing Project for fiscal year 2010-2011 because to defer the repair and resurfacing of streets would lead to higher costs in the future due to worsening pavement conditions and escalating construction costs; and WHEREAS, the street resurfacing program for fiscal year 2010-2011 will cost approximately $4,043,000 utilizing carry-over TransNet funds in the amount of $1,000,000; Proposition 1 B funds in the amount of $908,000; and Proposition 42 Replacement funds in the amount of $635,000; and WHEREAS, the Engineering Division desires to borrow the remaining balance of $1,500,000 through an interim loan from the Sewer Funds as follows: • The principal amount of the loan will be $1,500,000. • Funds will be transferred from the Sewer Fund into Street Resurfacing Project Accounts 511-409-580-598-6035 and 307-409-580-598-6035 as necessary. • The interest on the loan shall be at the rate of 0.75% per annum on the unpaid balance, totaling $40,102.64. • The loan will be repaid with interest, using the graduated payment schedule below: June 30, 2011 June 30, 2012 June 30, 2013 June 30, 2014 June 30, 2015 TOTAL: $11,250.00 Tax Increment Funds $340,000.00 Tax Increment Funds $420,000.00 Tax Increment Funds $350,000.00 TransNet (Prop A) Funds $418,852.64 TransNet (Prop A) Funds 31, 540,102.64 WHEREAS, taking advantage of the debt financing from sewer funds gives the City the opportunity to resurface a large number of street sections in one year resulting in long- term -cost savings that will more than compensate for the interest and other costs paid on the debt. Resolution No. 2010 — 140 Page 2 NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of National City hereby authorizes a five-year loan from sewer funds in the amount of $1,500,000 for the National City Street Resurfacing Improvement Program with an interest rate of 0.75% per annum in the amount of $40,102.64 on the unpaid balance. The loan shall be paid back using Tax Increment funds and TransNet (Proposition A) funds using a graduated payment schedule beginning in 2011 and ending in 2015, as set forth in the attached Exhibit A. PASSED and ADOPTED this 22nd day of June, 2p10. Ron 1Clforrison, Nfayor ATTEST: Mike Dalla, City Olerk APPROVED AS TO FORM: George H. Eiser, III City Attorney Loan Amortization Schedule Loan amount Annual interest rate Loan period in years Number of payments per year Start date of loan Optional extra payments $ Lender name: Sewer Service Fund Pmt No. Payment Date 1 6/30/2011 $ 2 6/30/2012 3 6/30/2013 4 6/30/2014 5 6/30/2015 Beginning Balance 1,500,000.00 $ 1,500, 000.00 1,171,250.00 760,034.38 415,734.63 Enter values $ 1,500,000.00 0.75 % 5 1 6/30/2010 Scheduled Payment 11,250.00 340,000.00 420,000.00 350,000.00 418,852.64 Graduating Payment for $1.5M Loan summary Scheduled payment $ 306,783.62 Scheduled number of payments 5 Actual number of payments 5 Total earty payments $ - Total interest $ 40,102.64 Total Payment $ 11,250.00 $ 340,000.00 420,000.00 350,000.00 418,852.64 Principal - $ 328,750.00 411,215.63 344,299.74 415,734.63 Interest Ending Cumulative Balance Interest 11,250.00 $1,500,000.00 $ 11,250.00 Ti 11,250.00 1,171,250.00 22,500.00 TI 8,784.38 760,034.38 31,284.38 TI 5,700.26 415,734.63 36,984.63 Prop A 3,118.01 0.00 40,102.64 Prop A INTER -FUND LOAN AUTHORIZATION The purpose of this document is to formalize the interim use of Sewer Fund monies as a funding source to expand the City's Street Resurfacing Program for FY 2010-2011. The principal amount of the loan will be S1,500,000. Funds will be transferred from the Sewer Funds into Street Resurfacing Project Accounts 511-409-580-598-6035 and 307-409-580-598- 6035 as necessary to expand the Street Resurfacing Program for FY 2010-2011. Interest on the loan ($40,102.64) shall be at the rate 0.75% per annum on the unpaid balance. The loan shall he repaid with interest, using a graduating payment schedule. Payments 1, 2, and 3 totaling $771,250, will be paid using Tax Increment Funds, and payments 4 and 5 totaling $768,852.64 will be paid using TransNet (Prop A) funds. Repayment Schedule June 30, 2011 June 30, 2012 June 30, 2013 June 30, 2014 June 30, 2015 TOTAL: $11,250.00 S340,000.00 S420,000.00 S350,000.00 $418,852.64 $1,540,102.64 Tax Increment Funds Tax Increment Funds Tax Increment Funds TransNct (Prop A) Funds TransNet (Prop A) Funds The detailed Loan Amortization Schedule for the Graduating Payment is attached hereto as Exhibit "A". ATTEST: Mike Dalla, City Clerk AUTHORIZED BY: Ron Morrison, Mayor APPROVED AS TO FORM: George H. Eiser, III City Attorney Loan Amortization Schedule loan amount 5 Annual interest rate Loan period in years Number of payments per year _ Start date of loan Optional extra payments $ Lender name:. Sewer Service Fund Pmt No. Payment Date 1 6/30/2011 2 6/30/2012 3 6/30/2013 4 6/30/2014 5 6/30/2015 Beginning Balance $ 1,500,000.00 1,500,000.00 1,171,250.00 760,034.38 415, 734.63 Enter values 1,500,000.00 0.75 5' 1 6/30/2010 Scheduled Payment $ 11,250.00 340,000.00 420,000.00 350,000.00 418,852.64 Graduating Payment for $1.5M Loan summary Scheduled payment: $ 306,783.62 Scheduled number of payments 5 Actual number of payments 5 Total early payments $ - Total interest __$ 40,102.64 Ending Cumulative Total Payment Principal Interest Balance Interest S 11,250.00 $ - $ 11,250.00 $1,500,000.00 $ 11,250.00 Ti 340,000.00 328,750.00 11,250.00 1,171,250.00 22,500.00 TI 420,000.00 411,215.63 8,784.38 760,034.38 31,284.38 Ti 350,000.00 344,299.74 5,700.26 415,734.63 36,984.63 Prop A 418,852.64 415,734.63 3,118.01 0.00 40,102.64 Prop A Passed and adopted by the Council of the City of National City, California, on June 22, 2010 by the following vote, to -wit: Ayes: Councilmembers Morrison, Sotelo-Solis, Van Deventer, Zarate. Nays: None. Absent: None. Abstain: None. AUTHENTICATED BY: RON MORRISON Mayor of the City of National City, California n City Clerk of the City of National City, California By: Deputy I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of RESOLUTION NO. 2010-140 of the City of National City, California, passed and adopted by the Council of said City on June 22, 2010. City Clerk of the City of National City, California By: Deputy