HomeMy WebLinkAboutR03-Economic Development Agency
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eDBVELOHIKRT DBPAR'.rlotur OF THE.
CITY OF SAB BBIllWIDIBO
REOUEST FOR COMMISSIOI!I/COUl'fCIL ACTlOI!I
From:
KENNETH J. IIENDERSOI!I
Executive Director
WELLS FARGO LID OF
CREDIT BX7B1ISIOI!I
Subject:
Date:
February 10, 1992
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Synopsis of Previous Commission/Council/Committee Action(s):
On July 2, 1990, the Community Development Commission authorized the
execution of a Letter of Acceptance for a Line of Credit with Wells
Fargo.
On October 01, 1990, the Community Development Commission authorized the
negotiation of an agreement with Wells Fargo Bank for investment
services.
On December 10, 1990, the Community Development Commission authorized
lines of credit with Wells Fargo Bank.
(Synopsis of Previous Actions continued to Page l!Iumber "2")
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Recommended Motion:
(Communitv DeveloDlDent Commission)
That the Community Development Commission authorize a one year
extension of certain Lines of Credit with Wells Fargo Bank and
authorize the execution of said documents.
AdmjJtrator
~r~OI!l. Executive Director
Development Department
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Contact Person:
Ken Henderson/Barbara Lindseth
Phone: 5065: 5081
Project Area:
All
Ward(s): 1 throu2h 7
Supporting Data Attached:
Staff Reoort
FUNDING REQUIREMENTS:
Amount:
I!I/A
Source:
Budget Authority:
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Commission/Council l!Iotes:
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KJH:BJL:lag:1679A
COMMISSIOI!I MBBTII!IG AGBI!IDA
Meeting Date: 2/17/1992
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Agenda Item l'Iumber:
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DBVELOPMEl'lT DEP~.
REQUEST FOR CO~SSION/COUftCIL ACTION
Wells Fargo Line of Credit Extension
Page -2-
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Synopsis of Previous Commission/Council/Committee Actions Continued...
On April 17, 1991, the Community Development Commission authorized the
Executive Director to make certain financial guarantees with regard to the
West Side Plaza Project.
On June 3, 1991, the Community Development Commission authorized the
amendment of certain lines of credit with Wells Fargo Bank and the
execution of certain documents in connection therewith.
On February 6, 1992, the Redevelopment Committee recommended approval of
of a one year extension of the Lines of Credit with Wells Fargo Bank.
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KJH:BJL:lag:1679A
CO!!tIISSION ImBTIlIG AGElfDA
Meeting Date: 2/17/1992
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Agenda It_ l'IuIIIber:
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DEVBLOPMENT DEPARnmrr
STAFF REPORT
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Wells FarRo Line of Credit Am....d"'ent
The firm of Wood-Husing and Associates was directed to assist the
Department with the maximization of yields the Department can earn on
its investment portfolio by undertaking a review of the cost, risk and
rate of return from alternate investment strategies available,
consistent with the Department's existing investment policies. The
firm was also directed to maximize the leverage which that portfolio
gives the Department in obtaining loanable funds from the banking
community by assisting in negotiating with Wells Fargo Bank a maximum
line of credit for use on redevelopment projects.
As approved on July 2, 1990 by the Commission, and as amended on June
3, 1991, the Line of Credit was designed to extend credit to the
Department in the aggregate principal amount of $11,000,000. Of this
$11,000,000, $1,000,000 is an unsecured line of credit payable at prime
rate to be repaid at the Department's terms, with a maturity date of
February 1992. The remaining $10,000,000 is a secured line of credit
payable at prime rate minus .50% to be repaid at the Department's
terms, with a maturity date of February 1992, and with collateral of
secured interest in cash or cash equivalents of not less than the line
commitment. There are no commitment or loan fees, but the Department
will maintain the ratio of cash or cash equivalents to the Unsecured
Line of Credit Commitment of not less than 1.5 at any time.
As collateral, $10,000,000 was approved by the Commission to be
invested through Wells Fargo Bank Investment Services. These funds are
tax increment funds, not bond proceeds, and the funds are invested in
accordance with the Department's Investment Policy. Investment of
these funds with Wells Fargo meets the requirement that the Department
maintains the ratio of cash or cash equivalents to the unsecured line
of credit at any time, and secures the remaining draws on the
$10,000,000.
In addition, the Commission adopted benefit resolutions (5266 and 5292)
authorizing the deposit of funds from the Southeast Industrial Park
project area to be invested with Wells Fargo as collateral for the
lines of credit issued to the Northwest and South Valle project area.
Said benefit resolutions are still in effect; however, the Lines of
Credit will expire on March 1, 1992 (Wells fargo has granted the
Department a thirty (30) day extension pending final approval).
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KJH:BJL:lag:1679A
COMMISSION MEETING AGENDA
"eeting Date: 2/17/1992
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Agenda Item Number:
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DEVELOPMENT DEPARTMENT STAFF REPORT
Line of Credit With W. Fargo Bank
February 10, 1992
Page Number -2-
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Staff recommends extension of the Line of Credit, because the Line is
critical to the completion of the West Side Shopping Plaza project, the
BAB Development and the Portugal and Neal Development.
On February 6, 1992, the Redevelopment Committee considered this matter
and recommended approval to the Community Development Commission.
Staff recommends adoption of the form motion.
Director
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KJH:BJL:lag:1679A
COMMISSION MEETING AGENDA
Meeting Date: 2/17/1992
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Agenda Item Number: