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CITY OF SAN BERNCRDINO - REQUEST .oR COUNCIL ACTION
From: Kenneth J. Henderson, Director
.Dept: Community Development
DMe: February 22, 1989
Sft~.-t.~ q:Y'llli NUMBER 649-0012-48
~O~ flf':)QEIGHBORLY SERVICES
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Synopsis of Previous Council action:
None.
Recommended motion:
That the request for loan restructuring, conversion of loan to a grant
or discontinuing foreclosure proceedings, as appropriate, be denied and
staff diredcted to continue implementation of loan collection policy
previously adopted by the Mayor and Common Council (Resolution Number
85-417).
Contact person:
Ken Henderson
Phone:
5065
Supporting data Mtached:
Staff Report
Ward:
1
FUNDING REQUIREMENTS:
Amount:
N/A
Source: (Acct. No.)
N/A
(Acct. DescriPtion)
N/A
Finance:
Council Notes:
75.0262
Allenda Item No
~.2-I
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CITY OF SAN BER~DINO - REQUEST ~ COUNCIL ACTION
STAFF REPORT
Representatives from the Home of Neighborly Services (HNS) have
requested to be placed on the, Common Council agenda for the
purpose of discussing the status of the City's loan with HNS.
On August 20, 1980, the City loaned to HNS $65,000 for the
purpose of rehabilitating HNS's office complex. From the time
the loan was originally funded to July, 1987, the Home was able
to make principal and interest payments eventually fixed at
$338.50 per month. ' In November, 1987, the former HNS executive
director met with community Development Department Loan Officer
and requested a reduction in monthly loan payments by one-half,
a freeze in interest accrual for one (1) year and a possible
one (1) year deferral of payments. In response, staff re-
quested HNS's last two (2) years of Internal Revenue Service
Tax Audit Reports, a current balance sheet and income
statement, and a letter from the Synod of Southern California
concurring with any written
proposal HNS might submit to the City.
For some seven (7) months HNS did not respond to our request
for additional information, even as the delinquent amount grew
longer. Finally, on September 6, 1988, HNS resubmitted in part
its request to reduce its monthly payment to the City from
$338.50 to $200.00. In meeting with HNS representatives, staff
noted that HNS promissory note had been revised and re-executed
on September 17,1983 for the purpose of consolidating certain
HNS debts. It is the revised promissory note that fixed HNS's
monthly pay at the current rate of $338.50. '
Once appropriate information was received, staff conducted a
financial analysis to determine in part HNS's ability to
increase and diversify its revenue base and its ability to
repay its debt to the City. HNS's lack of liquidity, reduction
in funding and increase in salaries coupled with what appears
to be ongoing organizational problems, preclude the infusion of
any new monies from staff's perspective. The following is a
summary of the status of the HNS loan as of February 22, 1989:
Principal and Interest:
Late Charges:
Total Amount Due to Bring
Account CUrrent:
$51,983.32
July 28, 1987
July, 1987
$ 6,431.50
$ 257.21
Loan Balance:
Date of Last payment:
For the Month of:
S 6.618.76
2/22/89
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HNS Staff Report C~inued...
Page -2-
o
Based upon the foregoing, particularly those areas describing
HNS's financial/organizational problems and the apparent vacuum
which exists at the board/executive management level, I recom-
mend adoption of the form motion which rejects reque~ts
additional consideration and instructs staff to continue to
implement the Loan Collection Policy previously adopted by the
Mayor and Common Council.
eve 1 opment
KJH/lab
..2/22/89
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dI cHome. of c::Ne.ighbo-r.ly ~E.'t(JicE., !lnc.
~ gamily alld 'Youth 5J\o~pam1
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February 9, 1989
Executho.e Board of Directors
Non.Profit Orpaizatio
Tax-[)educliblr ~.
839 No. Mt. Vernon A\1:Ih.l
San Bernardino. CA 92411-27'l
(714) 885-349
Charles A. Tolbert
Executive Director
Donald Antonio
Presi~ent
City of San Bernardino
Shauna Clark, City Clerk
300 North "D" Street
San Bernardino, CA. 92418-0121
Wilbur IJruwn
V ice President
George Aguilar
rreasurC:1
Nada Jagc:rson
Secretary
Dear Mrs. Clark;
This is a written request for the Home of Neighborly
Services, to be placed on the City Council Agenda for Mon-
day Feb. 20, 1989 to discuss the Community Development
Block Grant Loan.
Supporting Data will follow.
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L (..) c I ~dministrative Assistante
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