2000 AGN JUN 20 I07 - Laserfiche WebLink

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City Council Report — Cooperation Loan Agreement June 20, 2000 Page 2 of 3 approved assistance for both redevelopment projects, totaling some $170,000 in financial assistance. The Agency approved the assistance in both instances as long as there was no affect upon the funding and construction of the SARCAC public improvement projects. To fund the $170,000 in assistance, Agency staff indicated that there may be sufficient capital to fund the assistance through the interest income from the bonds and possible cost savings on the projects. However, to insure that all projects could be funded in the event of any cost overruns, the Agency may need to seek reimbursement for certain traffic related projects on the SARCAC list that were part of the City's Traffic Impact Study and eligible for funding by the City's Traffic Impact Fee collections. Those SARCAC projects eligible for reimbursement through the City's Traffic Impact fund include: Location Amount Signal Modification - Hunts Lane and Steel Road $ 73,200 Signal Modification - Washington Street and Hunts Lane $ 73,200 Signal Modification - Washington Street and Reche Canyon $ 73,200 New Signal - Hunts Lane and Cooley Lane $146,400 Total $366,000 Attached as Exhibit "A" to the Resolution is a proposed Cooperation Loan Agreement (the "Loan Agreement") by and between the City of Colton and the Redevelopment Agency for the City of Colton, which would provide for a reimbursement of up to $400,000 in traffic funds to the Agency in consideration for the Agency advancing the associated costs for the construction of those SARCAC qualifying projects noted above. The loan agreement would provide for interest to accrue at a rate of 7% per annum on the unpaid balance. The loan would be for a maximum term of 10 years. Repayment of the Loan would take place in ten annual installments and would be secured by a pledge of the City's Traffic Impact Fee Fund. The City's obligation to repay the Loan shall at all times be subordinate to any outstanding or hereafter outstanding bonds, notes or other forms of indebtedness of the City that are payable in whole or in part from the monies on deposit in the Traffic Fund or from other legally available funds of the City.. Additionally, the Loan shall not constitute a prior lien on the monies currently on deposit in the Traffic fund or other legally available funds of the City. Financial Impact The City would create an outstanding annual obligation to repay up to $400,000 from the existing Traffic Impact Fund balance and other legally available revenues. The City would pledge to make annual appropriations from the Traffic Fund and other legally available funds to repay the loan. However, the City will not pledge the City's general taxing powers to secure the Loan. Additionally, the annual installment payments shall be subordinate to any existing or future bonds, notes or indebtedness that are payable in whole or in part from the Traffic Fund. Repayment of the Loan will be subject to annual appropriations to fund other traffic improvement projects. Depending upon the amount of Traffic Fees collected annually, there may be a negative impact in the funding and construction of other traffic improvement projects.