TO:
Honorable Mayor and Members of the City Council
THROUGH:
Bruce Moe, City Manager
FROM:
Julie Bondarchuk, Acting Finance Director
Libby Bretthauer, Financial Services Manager
Marcelo Serrano, Budget & Financial Analyst
SUBJECT:Title
Consideration of a Request to Waive Repayment of the COVID-19 Loan Provided to the Oceanographic Teaching Station (OTS) Roundhouse Aquarium (Acting Finance Director Bondarchuk).
(Estimated Time: 10 Mins.)
DISCUSS AND PROVIDE DIRECTION
Line
_________________________________________________________
Recommended Action
RECOMMENDATION:
Staff recommends that the City Council discuss and provide direction regarding a request to waive repayment of the COVID-19 loan provided to the Oceanographic Teaching Station (OTS) Roundhouse Aquarium.
FISCAL IMPLICATIONS:
As part of the City’s COVID-19 Business Loan Program, OTS applied for and received a loan of $10,000 in April 2021. Under the terms of the agreement, loan recipients agreed to repay the loan amount along with interest over a three-year period after the COVID-19 emergency ended. The interest rate on the loans was set based on the Local Agency Investment Fund (LAIF) rate at the time that the City Council approved a motion ending the COVID-19 Emergency plus 0.5%.
On December 20, 2022, City Council approved a motion to end the COVID-19 Emergency on February 28, 2023. Per the loan documents, the interest rate for the loan was determined to be 2.57%, based on the Local Agency Investment Fund (LAIF) rate for December 2022 (2.07%) plus 0.5%. Repayment for OTS’ loan was set to begin May 1, 2023, with monthly payments of $288.92. Per the terms of the loan, OTS would have paid $10,401.12 for principal and interest over the three-year repayment period of the loan.
BACKGROUND:
The City Council has developed a process to allow individual Councilmembers to request, with the support of at least two other Councilmembers, that items be placed on a future agenda for City Council discussion. At the May 16, 2023, meeting, Mayor Montgomery and Mayor Pro Tem Franklin requested that an item be placed on a future agenda for the City Council to consider a waiver request for the repayment of the COVID-19 Loan provided to the OTS. At the June 6, 2023 City Council meeting, a third Councilmember concurred with placing this request on the agenda for Council consideration.
DISCUSSION:
On December 15, 2020, the City Council established a $250,000 fund for a COVID-19 business loan program to assist local small businesses that operate in the City of Manhattan Beach. The amount of assistance ranged from $2,500 to $10,000 with an interest rate on the loans based on the Local Agency Investment Fund (LAIF) rate plus 0.5% at the time that the City Council approved a motion ending the COVID-19 Emergency.
The application period opened on January 27, 2021. Staff received 20 applications for loans and, after review, approved 14 businesses to receive loans from the City. The program distributed a total of $125,000 to the 14 recipients with one business receiving a loan for $5,000, four businesses receiving loans of $7,500, and the remaining nine organizations receiving loans of $10,000. OTS was the only non-profit to apply for and receive a loan through the program.
On December 20, 2022, the City Council approved a motion to end the COVID-19 Emergency on February 28, 2023. Per the agreed-upon conditions of the loan, the rate was determined to be 2.57%, based on the Local Agency Investment Fund (LAIF) rate for December 2022 (2.07%) plus 0.5%.
The repayment period for the loans began on May 1, 2023, and all loan recipients began receiving monthly repayment invoices. OTS’ repayment schedule requires monthly payments of $288.92. Should the request to waive loan repayment be approved, the total amount forgiven would be $10,401.12, which reflects the total that OTS would have paid, including interest, over the three-year repayment period of the loan.
Staff recommends that the City Council discuss and provide direction regarding a repayment waiver request for the COVID-19 Loan provided to the Oceanographic Teaching Station (OTS) Roundhouse Aquarium.
PUBLIC OUTREACH:
The City has fully complied with the Brown Act in notifying the public that this item would be considered at this meeting.
ENVIRONMENTAL REVIEW:
The City has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under Section 15378 of the State CEQA Guidelines; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary.
LEGAL REVIEW:
The City Attorney has reviewed this report and determined that no additional legal analysis is necessary.