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HomeMy WebLinkAbout78-Community Development ....'CrWOF SAN _RNiRDlNO - RB.UBST it. COUNCIL ACTION. ":1 i>t)n: ,OIpt: . Dae: Kenneth J. Henderson, Director ~.-.QWAb ~AN NUMBER 649-0012-48 . 80MB p38EIGHBORLY SERVICES _ f9 21 \'lI ~ Community Development PeJ:lruary 22, 1989 SynopIiI of Previous Council action: None. Rlicomrnend8d motion: o That the request for loan restructuring, conversion of loan to a grant or discontinuing foreclosure proceedings, as appropriate, J:le denied and staff diredcted to continue implementation of loan collection policy previously adopted J:ly the Mayor and Common Council (Resolution NumJ:ler 85-417). . Contact penon: Ken Henderson Staff Report Phone: WlII'd: 5065 Supporting data lIttach8d: FUNDING REQUIREMENTS: 1 Amount: N/A Source: (Acct. No.1 (Acct. DescriDtionl N/A N/A Finll/lce: Q,ncil' Notes: 3'JD~.. CITY. OF SAN _RN&DINO. - REQueST F&. COUNCIL ACTION o Q jO 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: Loan Balance: Date of Last Payment: For the Month of: $51,983.32 July 28, 1987 July, 1987 $ 6,431.50 $ 257.21 Principal and Interest: Late Charges: Total Amount Due to Bring Account CUrrent: S 6.618.76 2/22/89 o .HNS Staff Report continued... Page -2- o c:> 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 requests additional consideration and instructs staff to continue to implement the Loan Collection Policy previously adopted by the Mayor and Common Council. velopment KJH/lab 2/22/89 c:> o ,0 ~fit .i" ~'.' ~,~ . , ';",.i o I I . .>:- ", o o r 0 c:JI cJ.I.ome of .:::::Nei9hbo'tty ~e'tlJicE, 2!::IV 9amily and ryouth <,:Aog'lam1 ~. ;, ~ (,harle. A. rolberl Executiw Director ! [f nc. February 9, 1989 NOll-Profit Orpnilatio Tax-Deductible 501,(' 839 No. Mt. Vernon A\'Cfl\.l San Bernardino. CA 92411-271/ (7141885-3491 Executive Board of Directors Donald Antonio Prcsijlenl Wilbur Brown Vice President George Aguilar T rcasurc. Nada Jagerson Secretary City of San Bernardino Shauna Clark, City Clerk 300 North "D" Street San Bernardino, CA. 92418-0121 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. ~ 0:: ..... -I (..) >- .... c::s I (:I UJ c: m ~ .' 'c. o - penni Sweetenbu g dministrative Assistante I! .. United Presbyterian Settleme_l!t Ho~~!