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Home My WebLink About05- Development Department DEVELOPMENT DEPARTMENT OF THE CITY OF SAN BERNARDINO REQUEST FOR COMMISSION/COUNCIL ACTION FROM: KENNETH J. HENDERSON SUBJECT: REDEVELOPMENT AGENCY Executive Director LINE OF CREDIT DATE: March 30, 1994 --------------------------------------------------------------------------------------------------------------------------------------------- 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 1, 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. --------------------------------------------------------------------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) MOTION: 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. Further, that the Executive Director be authorized to enter into negotiations with First Interstate Bank of California to establish a certain line of credit. Administrator KENNETH J. HE ERSON Executive Director --------------------------------------------------------------------------------------------------------------------------------------------- Contact Person(s): Kenneth J. Henderson/Mike Trout Phone: 5081 Project Area(s): All Ward(s): 1-7 Supporting Data Attached: Staff Report; FUNDING REQUIREMENTS: Amount: $N/A Source: N/A Budget Authority: N/A --------------------------------------------------------------------------------------------------------------------------------------------- Commission/Council Notes: ------------------------------------------------------------------------------------------------------------------------- KJH:RMT:lag:04-01-0Lcdc COMMISSION MEETING AGENDA MEETING DATE: 04/04/1994 Agenda Item Number: _ DEVELOPMENT DEPARTMENT Request for Commission/Council Action Redevelopment Agency Line of Credit Page Number -2- ---------------------------------------------------------------------------------------------------------------------- Synopsis of Previous Commission/Council/Committee Action(s) 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 17, 1992, the Community Development Commission approved a one-year extension of the Lines of Credit with Wells Fargo Bank. On March 11, 1993, the Redevelopment Committee recommended to the Community Development Commission approval of this item. On March 22, 1993, the Community Development Commission approved a one-year extension of the Lines of Credit with Wells Fargo Bank. One February 21, 1994, the Community Development Commission directed staff to determine if better terms for a $10,000,000.00 line of credit, than those of certain lines of credit with Wells Fargo Bank, were available in the open market and to obtain a 30-day extension from Wells Fargo Bank, on the March 1, 1994 maturity date, for certain lines of credit. On March 7, 1994, the Community Development Commission received and filed a status report indicating staff efforts in obtaining more favorable terms for a $10,000,000.00 line of credit. -------------------------------------------------------------------------------------------------------------------------- KJH:RMT:lag:04-01-0I.cdc COMMISSION MEETING AGENDA MEETING DATE: 04/04/1994 Agenda Item Number: DEVELOPMENT DEPARTMENT STAFF REPORT --------------------------------------------------------------------------------------------------------------------- Redevelopment Agency Line of Credit As directed by the Community Development Commission, staff has contacted E.H. Wood & Associates for the purpose of determining which lending institutions were of sufficient size to accommodate a $10,000,000.00 line of credit. E.H. Wood & Associates had previously contacted over fifteen (15) west coast lending institutions, including local institutions such as Bank of San Bernardino, Commerce Bank, Riverside National Bank and Chino Valley Bank. It was determined that the only institutions of sufficient size were Bank of America, Union Bank and First Interstate Bank of California. Large east coast banks were also afforded the opportunity to respond to the Agency's request and, for a variety of reasons chose not to do So. Staff has sent inquiries to these three (3) lending institutions concerning a $10,000,000.00 line of credit. Only Bank of America and First Interstate responded to staff's initial request. In each case, these lending institutions will require 2-3 weeks to review three (3) years of Agency financial statements in order to provide the Development Department a proposal letter for the line of credit. On March 24, 1994, Bank of America and First Interstate Bank provided staff with proposal letters concerning terms and conditions concerning a $10,000,000.00 line of credit. The proposal letter from Bank of America was rejected due to the proposed interest rate being higher than the current rate offered by Wells Fargo Bank. The proposal letter from First Interstate Bank was accepted due to the proposed interest rate being .125% lower than the current rate offered by Wells Fargo Bank. Staff invited Wells Fargo Bank to either match or better the proposed interest rate of First Interstate Bank. Wells Fargo Bank has committed to match the proposed interest rate offered by First Interstate Bank. Old Interest Rate New Interest Rate Prime minus .5% Prime minus .625% All other terms and conditions of existing Wells Fargo Bank line of credit would remain. -------------------------------------------------------------------------------------------------------------------------- KJH:RMT:lag:04-01-01.cdc COMMISSION MEETING AGENDA MEETING DATE: 04/04/1994 Agenda Item Number: _,�_ DEVELOPMENT DEPART A ENT STAFF REPORT Redevelopment Agency Line of Credit March 29, 1994 Page Number Two --------------------------------------------------------------------------------------------------------------------- With respect to First Interstate Bank, staff has conducted promising discussions with bank personnel regarding a second line of credit. The Agency currently has over $9 million on deposit with First Interstate. More detailed discussions must be conducted in order to tie down the line of credit interest rate and factors affecting same and First Interstate's line of credit collateral requirements (initial discussions indicate the possibility of a ratio less than dollar-for-dollar). Additionally, staff feels that the establishment of line of credit with First Interest Bank, with the same basic terms and conditions Wells Fargo Bank, will provide the Agency with two (2) lending institutions of sufficient size to provide for future needs. Staff recommends adoption of the form motion. NOW, KENN TH J. AENDERSON, Executive Director Development Department ------------------------------------------------------------------------------------------------------------------------- KJH:RMT:1ag:04-01-0Lcdc COMMISSION MEETING AGENDA MEETING DATE: 04/04/1994 Agenda Item Number: