HomeMy WebLinkAboutCC RESO 2011-160•
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RESOLUTION NO. 2011 — 160
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY
APPROVING THE REDEMPTION OF $204,361 IN CDBG FUNDS
HELD AS STATE AND LOCAL GOVERNMENT SECURITIES
FOR THE U.S. DEPARTMENT OF HUD SECTION 108 LOAN USED
TO FUND THE CONSTRUCTION OF FIRE STATION 34,
APPROVING THE REALLOCATION OF $48,500.00 IN CDBG FUNDS FROM
THE REMAINING BALANCE OF A FISCAL YEAR 2010/2011 ALLOCATION
TO THE CHRISTMAS IN JULY REHABILITATION PROGRAM TO COVER
$252,861.50 OF INTEREST DUE ON THE SECTION 108 LOAN
IN FISCAL YEAR 2011/2012, AND APPROVING AN INTERIM ALLOCATION
FROM GENERAL FUND CONTINGENCY RESERVES OF $77,930.25
TO COMPLETE THE INTEREST PAYMENT OF $126,430.75 DUE ON
JULY 25, 2011, TO BE REPAID FROM THE PROCEEDS OF SAID SECURITIES
WHEREAS, in 2003, the City of National City secured a loan of $6.9 Million from the
U.S. Department of Housing and Urban Development ("HUD") to construct a fire station facility on
the northwest corner of East16th Street and D Avenue in National City ("Fire Station 34"); and
WHEREAS, the HUD Section 108 guaranteed loan program ("HUD 108 Loan")
allows the City to pledge Community Development Block Grant ("CDBG") entitlement funds for
repayment of the loan; and
WHEREAS, the City has pledged CDBG entitlement to pay for HUD 108 Loan
payments as an eligible use of funds; and
WHEREAS, the City set up a Partial Defect cuit.e au Ow With the HUD 103 Loan
Trustee to be held in order to avoid losing control of CDBG Program Income funds; and
WHEREAS, HUD 108 Loan Agreement noted that any funds used to defease a
HUD 108 Loan are to be held as State and Local Government Securities ("SLGS") instead of cash;
and
WHEREAS, the City purchased $1,094,028.00 in SLGS and placed said funds in a
Partial Defeasance Escrow for HUD 108 Loan repayment; and
WHEREAS, the City is required to make interest payments of $252,861.50 in Fiscal
Year 2011/12; and
WHEREAS, the City can redeem as cash and reappropriate $204,361.00 of SLGS
held in the Partial Defeasance Escrow for prepayment of the HUD 108 Loan Principal on August
13, 2013, calculated at $210,000 with accrued interest to pay instead the interest due in Fiscal
Year 2011/12; and
WHEREAS, the City can reallocate $48,500.50 in unexpended CDBG funds that
were not used by a CDBG activity known as the Christmas in July Housing Rehabilitation Program
funded for Fiscal Year 2009/10 and 2010/11 to cover the remainder of HUD 108 Loan payments
due in Fiscal Year 2011/12.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
National City hereby approves the redemption of $204,361.00 in CDBG funds held as State and
Local Government Securities purchased under a Partial Defeasance Escrow for the U.S.
Department of HUD Section 108 Loan used to fund the construction of Fire Station 34.
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Resolution No. 2011 —160
July 19, 2011
Page Two
BE IT FURTHER RESOLVED, that the City Council of the City of National City
hereby approves said redemption to partially cover the interest due on the HUD 108 Loan in
Fiscal Year 2011/12 instead of using the redeemed funds to prepay the HUD 108 Loan principal
by $210,000.
BE IT FURTHER RESOLVED that the City Council of the City of National City
hereby approves the reallocation of $48,500.50 in CDBG funds from the remaining balance of a
Fiscal Year 2010/11 allocation to the Christmas in July Rehabilitation Program to partially cover
$252,861.50 of interest due on the Section 108 Loan in Fiscal Year 2011/2012.
BE IT FURTHER RESOLVED that the City Council of the City of National City
hereby authorizes an interim allocation from General Fund Contingency Reserves of $77,930.25
to complete the interest payment of $126,430.75 due on July 25, 2011, to be repaid from the
proceeds of said Securities.
PASSED and ADOPTED this 19th day of July,
on M rrison, Mayor
• ATTEST:
hael R. Dalla
Mi , ity Clerk
C
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PPROVED AS TO FORM:
dia
Atto
ilva
Passed and adopted by the Council of the City of National City, California, on July 19,
2011 by the following vote, to -wit:
Ayes: Councilmembers Morrison, Natividad, Rios, Sotelo-Solis, Zarate.
Nays: None.
Absent: None.
Abstain: None.
AUTHENTICATED BY: RON MORRISON
Mayor of the City of National City, California
9
. , , Z. 1," IA
City ierk of the City 4f National City, California
By:
Deputy
I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of
RESOLUTION NO. 2011-160 of the City of National City, California, passed and
adopted by the Council of said City on July 19, 2011.
City Clerk of the City of National City, California
By:
Deputy