TO:
Honorable Mayor and Members of the City Council
FROM:
Bruce Moe, Acting City Manager
SUBJECT:Title
Home Loan for New City Manager
APPROVE; APPROPRIATE
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Recommended Action
RECOMMENDATION:
Staff recommends that the City Council: a) approve the home loan (secured promissory note) for the new City Manager in the amount of $1.7 million, and b) appropriate $1.7 million from the available General Fund balance.
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FISCAL IMPLICATIONS:
Funds are available in the General Fund for this loan, and will come from moneys deposited in the State Local Agency Investment Fund (LAIF) which are currently earning .233%. The loan will be fixed for three years at .733% (LAIF plus .5%) and, as a result, will have a neutral impact on the City's portfolio yield. Additional loan details are listed within this report.
Please note that the loan funds had been previously added to the fiscal year 2014-2015 budget in anticipation of the loan being executed in the new fiscal year. However, with the loan proceeds scheduled to be utilized in fiscal year 2013-2014, an appropriation in the current year is necessary. The fiscal year 2014-2015 allocation has been removed from next year's budget.
BACKGROUND:
City Council hired its new City Manager, Mark Danaj, at the May 20th Council meeting. Among the provisions, Mr. Danaj's contract calls for a low interest rate home loan for a maximum amount of $1.7 million for the purchase of a residence in Manhattan Beach or within a reasonable distance from the City. Housing assistance provisions are common when hiring a City Manager in areas with high housing costs, such as Manhattan Beach.
Mr. Danaj has made an offer (which has been accepted) on a home in Manhattan Beach. As a result, the housing assistance provision of his contract needs to be exercised in order to complete the home purchase.
DISCUSSION:
The basic loan provisions are as follows:
- The...
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