HomeMy WebLinkAboutMINUTES - 07132004 - HA.3 HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA LLA
TO: BOARD OF COMMISSIONERS TI •
FROM: Robert McEwen, Executive Director
DATE: July 13, 2004
SUBJECT: APPROVE A LINE OF CREDIT WITH WESTAMERICA BANK NOT TO EXCEED
$1,000,000 FOR THE HOUSING AUTHORITY OF THE COUNTY OF CONTRA COSTA
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
1. RECOMMENDED ACTION:
APPROVE e revolving line of credit to the Housing Authority from Westamerica Bank not to
exceed $1,000,000 with a one year term, and AUTHORIZE the Executive Director and Deputy Executive
Director to ,'<i ,1, all documents necessary to open this line o f credit, including a promissory notain the form
attached hereto.
ll. FINANCIAL IMPACT:
Approval of this action will provide the Housing Authority of the County of Contra Costa the
administrative authority to open a line of credit to protect against any overdraft conditions that may arise
from time to time. Initial interest on this line of credit will be 4% periodically adjustable according to the
lenders cost of funds index. The line of credit will be paid off through the recapture of funds due to the
Housing Authority from the U.S. Department of Housing and Urban Development (HUD) and through the
Housing Authority's general budget. This line of credit will forestall the liquidation of other investments
that would have to be sold at a discount in order to meet the Housing Authority's cash demands. There is
no cost to the County General Fund.
Ill. REASONS FOR RECOMMENDATION/BACKGROUND
The Housing Authority provides rental subsidies to approximately 6800 low-income families
through the Section 8 Housing Choice Voucher(NCV) program, the largest program operated by the
Housing Authority, Recent changes in how HUD funds housing authorities for the HCV program have
placed financial strains on this agency.
• HUD's new methodology for establishing reimbursement of Housing Assistance Payments, the
money paid to landlords on behalf of eligible low-income families, does not fully reimburse the
Housing Authority for it's actual costs. This $500,000 shortfall to date is expected to grow, although
at a slower rate, in the next few months until administrative changes made by the Housing Authority
reduce the average cost of issuing a voucher down to the HUD cap.
CONTINUED ON ATTACHMENT: X SIGNATURE
RECOMMENDATION OF EXECUTIVE DIRECTOR RECOMMENDATION OF BOARD
COMMITTEE
APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ON _- ' f�-'01/ APPROVED AS RECOMMENDED / C fE
VOTE OF COMMISSIONERS
I HEREBY CERTIFY THAT THIS IS A
UNANIMOUS (ABSENT , %r : TRUE AND CORRECT COPY OF AN
AYES: NOES:_ ACTION TAKEN AND ENTERED ON THE
ABSENT: ABSTAIN: MINUTES OF THE BOARD OF
COMMISSIONERS ON THE DATE SHOWN.
x P
ATTESTED ?H f r
JOHN- EETEN,CLER OF
THE BOARD OF COMMISSIONERS
AND COUNTY ADMINISTRATOR
BY DEPUTY
H:\RobertMcEwan\MSOF'FICE\WINWORD\Board Orders\130-1-ine of Credit 07I304.doc �_
sq
• HUD awes the Housing Authority$2,2 million. This amount is the agency's year-end settlement
statement that was presented to HUD about six weeks ago and represents NCV program casts
incurred but not paid by HUD during the FYE 3/31/04. We have been assured by HUD that our
settlement statement has been approved and that payment will be made soon.
IV. CONSEQUENCES OF NEGATIVE ACTION.
Should the Board of Commissioners elect not to approve this action, the Housing Authority could
experience periodic cash flow problems that would lead to unpaid obligations.
JUL. 2.2004 12:15PM WESTAMER T CA B€ W NO.B5B P.2
PROMISSORY NOTE
ME .
., 0191
. . N .
I;eforonces in the shaded area we for Lenders use only and do not limit rho appk"Dolly of this document to any particular lose or hem.
,any€tam aboays conta€Wino,y'.n has been otteIOW tliue to text lanqth limltattlona.
ftrrctwer. HOUSING AUTHORITY OF CONTRA COSTA Lender: WESTAMERfOA BANK
COUNTY FAIRFIELD CREDIT ADMINISTRATION
5133 WUOILLO STREET 2400 HILBORN ROAD,SECOND FLOOR
MAPTINEZ,CA 04553 €AIRFIELD,CA 24553
—
Principal Arinoti t. $1,000,000.00 Initial Rate: 4.260% oat# of Nate: July 1, 2004
PROMISE To PAY. HOUSING AuTitio RI'TY OF CONTRA COSTA COUNTY(.'eorrower°)Promises to pay to WESTAMERIOA BANK("Lender"),
Or order,In lawful money of the United States of America,the Principal amount of one Million&f7Nt00 Dollars(0,000,000.00)or So much as
may be outstanding,together with Interest on the unpaid outstanding principal balance of each advance, Interest shall be calculated from the
date of each advance until repayment at each advance,
PAYMENT. borrower will pay this loan In one Payment of all outstanding principal plus all accrued unpaid Interest on March 31, 2005, to
addition,Borrower will Pay regular monthly payments of all accrued unpaid Interest due as of each payment chats,beginning July 31,20ft4,with
all subsequent Intertest payments to be due on the last stay of each Month,fuer that. Unless otherwise agreed or required by applicable law,
psyment4 will be,applied first to any accrued unpaid Interest; alert to principah, then the any unpaid collection costs:and than to any fate
charges. The annual Interest rats for Oft Note Is computed one 3651360 basis,that is,by applying the ratio of the annual Interest rata over a
year of 360 clays,multiplied by the outstanding prinelpal balance,multiplied by the actual number of days the principal balance Is outstanding,
tdorrower will pay Leakier at Lsnder'4 address shown above or at such other place as Lender may sleaaignata In writing,
VARIABLE IN'T'EREST RATE, The interest rate on this Not$ Is subject to change from time to time based on changes In an index which Is Vis
Westsmoriea Bank's Index Rests(the`Index`). The BarWe index Rats is established by Sarik In Its soft Rafeei headquarters office as of the date of We
Note,and as of each date that Baal may aatust such index Fate. Loans may be made by Bank at above or below the Index Rate. Londar will tell
Burrawor the ctirrom index nits Capon Botrower's raquast The Interest rate change will not occur more often than each Day, Borrower un(terstanda
that Landor May maker loans based an other rates as weff. The index currently is 4,250%, The Interest rates to be applied to the unpaid principal
taatanIIt of this Note will be at a rate equal to the Index.resulting In an Initial rate of 4.2£OVc NOTICE: Under no circumstances wlll the interest
rate on this Nota be more than uta maximum rats allowed by applicable law.
PREPAYMENT;MINIMUM INTEREST CHARGE. in any avant,even upon full prepayment of thf3 Note,Borrower understands that Lanoar is eniitleed
to a minimum Inlafaat chargee of$MOO. Other than Sonoww's obligation to Pay any minimum interest charge,Borrower may pay without penalty off
or a portion of dee amount owed earner than lt Is due. Early paymants will not, unless agreed to by Lender In writing, rallove Sarrower of Borrowar's
obligation to continue to make payments of accrued unpaid Interest, Rolhor,early payments will mouce the principal balance duo. Borrower agrees
not to wind Lander payments marked"paid In full%"without raeourme",or abet Iangue99. It Borrower sends such a payment,Lander tray accept it
without Insing any of Lender's rights under this Note, and 010trower will remain obligated to pay any further amount owed to Lender, All written
cornmunications concerning disputed amounts.including any check or other payment instrument that indicates that the payment constitute$"payment
In full" of the smaunt owed or that Is tendered with other conditions of firn#tai,ons at as full Satisfaction of a disputed amount must be mailed or
delivered W: WEST'AMERICA BANK,LOAN SERVICES,P.O.13OX 1100,MAC 4A,lE SUISUN,CA 94585-1190.
LATE CHARGE. it a payment fs 15 days or more later,aotrower will bre chargod ZOOM.of the regularly scheduled payment.
IN'#EREV AFTER DEFAULT. upon default, tate variable interest rata an this Now shall Immediately Increase to 4,000 percentage pokits over tho
Index,it p4rmlttad under applicable law.
DEFAULT. Esch of the following Shall constitute an avant of default(°Event of WWII)under this Nota:
Payment Default. gatrower falls to make any payment when due under this NOW
Other f ataufta. Borrower fails to comply with or to perform any other term,obligation,covenant or condition canralned In this Note or in any of
the rotated documonts or to comply"kh or to perform any term,obligation,covenant or condition contetrred in any other aorearrisnt between
Lender and Borrower,
False Statafnanis. Any warranty,representation or 3tatatne11i mado or furnished to Lander by Borrower at on Borrower's twhalf under this Note
of the rotated documents Is false or tritaivadtng in any material respect,elther now or st the time made or turntsnod or becomes false or misleading
at any"a thweaftar.
tnsolvehcy. Tina dissolution or termination of Borrower''&existence ss a going bualnoss,the Insolvency of Borrower,the aploatniment of a rsoelver
for ally putt of Borrower's property, any assignment for the benefit of creditors, any type of creditor workout, or the comrnencomwit of any
proceeding under any bankruptcy or Insolvency jaws by or against Borrower.
Creditor or Forfeiture Proceedings. Commencement or 1erecka6ure or forfeiture proceedings, whethat by judicial proceeding, soff•help,
repossession or any other method,by any Creditor of Borrower or by any governmental agency agetlntt any collateral securing the loan. Tnis
includes a garnishment of any of Boerowar'e account,,Inoiuding deposit accounts,with Lender. However.this Event of Oafaurt Shall not apply If
there is a goad Wth dispute W Borrower as to the Yalld#ty 0r taason01e11433 of the claim which is the bash`of the creditor or forfeiture proceeding
end It Scrtowor gives Leader written Miles of the Creditor or farfeftur#pnxaedtng and deposits with Lender Montag or a surety bond for the
cr oditor or forfeiture proceeding,In an amount determined by Lender,In Its 4019 discretion,as being an adequate reseryo or bond for the dispute,
Events Affecting Guarantor. Any of the preceding events ooccur'&with respect to any guarantor,endorser,autety,of accommodation party of.any
of the indobtadness of any guarantor,endorser,Surety,Or accommodation,party dial or becomes hscompstant,or revokes or disputes the validity
at,or liability under,any guaranty of the indebtedness evidenced by this Note. In the event of a death,Lander,at its option,may,but shalt not be
roqutrad to,permit lhts guaranwes estate to assume unconditionally the obligations arising under the guaranty In a manner sail:factory to Lander,
and,in doing$0,Cuts any Ellen of Ctelauh.
Change in Ownership. Any change In ownership of twentydive percent(25%)or more of the common stock of Borrower.
Adverbs Change. A material adverse change occuls In Bwmwer's floanelal condition, or Lender believes the prospect of psymertt or
performance of this note Is Impaired.
Cure Provisions, h any default,otter than a defsuft In payment Is curable end If Borrower has not been given a notice of a breach of the same
provision of this Now witrtin tris preceding twowe,(12)months,it may be cured(end no event of defeult will have occurred) It 9orrowor, after
receiving written rotates from lender demanding outs of such dalav#b (1) aures tate default wlthln fifteen(15)days,0r (2) M the Cur#requires
mors than fifteen (15)(toys, Im,"d#ately Initiates stops which Lender deems in Lender's 3016 discretion to be sufficient to cuts the default and
JUL.. 2.c 004 12:15PM WESTAMERICA BANK NO.955 P.3
PROMISSORY NOTE
Loan No: 212.60320 (Continued) Page 2
thereafter continues and complains all reaaonebla and necessary steps sufficient to produce compllance as soon as reasonably pract-cal.
LENDER'S RIGHTS. Upon default,tender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately
due,and then Borrower wilt pity that amount.
ATTORNEYS'FEES,EXPENSES. Lendar may hire of pay someone state to help collssct this Note If Botrowar aces not pay. Borrower will pay tender
that amount. This litctudes,subject tis any limits under applicable law,Lender's anorneys'fees and Landers legal expens6s,whether or not there is a
lawsuit, Inctuding attorneys'fees, expenses for bankruptcy prooeadings(including efforts to modify or vacate any automatic stay or injunction), and
appeals. Borrower also will pay any court tsoata,In addition to all lather sums provided by law.
JURY WAIVER. Lender and Borrower hereby waive the right to arty jury trial In any action,Pmetteding, or counterclaim brought by either
Lander or Borrower against the other.
GOVERNING LAW. 'fhfsa Nota will be governed by, construed and enforced In accordance with federal law and the taws of the State of
California. This Note has been acoeptad by Lender to the State of 0altforrile.
CHOICE OF VF-NUF. If thors is a lawsuit,Burrower agrees upon Laandete request to submit to the Jurisdiction of the courts of SOLANO County,State
of California,
DISHONORED 1rEM FEE. Borrower will pay a fee to Lender of S15.0D it Borrower makes a payment on Sortower's loan and the check or
preauthortxad charge with which Borroww pays is later dishonored.
LINE OF CREDIT, This Note evIdendes a revolving titre of credit. Advar+ces under this Mote(pay be requested orally by Borrower or as provided in
this paragraph. Lender may, but need not, require that all oral requests be confirmed in writing, AN communications, Instructions,or directions by
telephone or othermise to lender etre to be directed to Lendae# office shown above. The following persons Currently are authorized to request
advances and authorize payments under'the One of credit until lander receives from Borrower,st Landers address shown above,wrltten notice of
(evocation of thew stnhaflrys ROBERT McEWAN,CORP SEC i EXEC DIRECTOR of HOUSING AUTHORITY OF CONTRA COSTA COUNTY; and
RUDY TAMAYD,OEP EXEC DIRECTOR of MOUSING AUTHORITY OF CONTRA COSTA COUNTY, Borrower agrees to be iiable for alt sums either,
(A) advanced In accordance with the instructions of an authorized person w (M crackled to Any of Borrowers accounts with tender. The unpaid
ptinCipal balance owing on this Note at any time may be evidenced by endorsements on this Note or by Lender's Internet records, Including CWy
computer piirit-oats. Lender will have no otsllgtttfan to advanoo funds under this Nota it, (A) Borrower or any guarantor,is In default under tho terms of
this Note or any agreament that Borrower or any guarantorf'has with Lender,Including any agreemattt inste in connection won the signing of this Note;
(6) Borrower or,any guarantor tosses doing business or Is Insolvent; (C) any guarantor creaks,claims or otherwise attempts to Ipttit,modify or revoke
Such guarantor's guarantee of this Neste of any other loan with Lander,or (D) eomlwar has applied funds provided pursuant to this Note for purposes
other than torose authorised by Lander.
cHOICf OF VENUE.. THIS PROVISION SUPERSEDES THE CHOICE OF VENUE NOTED ABOVE AND IS SPECIFIC TO THIS PROWSSORY
NOTE, IF THERE IS A LAWSUIT, BORROWER AGREES UPON LENDER'S REOUES'T fib SUBMIT TO THE JURISD=ION OF THE COURTS OF
CONTRA COSTA COUNTY,STATE OF CALIFORNIA.
JURY WAIVER,THIS PROVISION ON THE PROMISSORY NOTE SHALL BE DELETED IN ITS ENTIRETY, THIS EXCLUSION IS SPECIFIC TO THIS
PROMISSORY NOTE.
SUCCESSOR INTERESTS, The terms of this Notal shalt be binding upon Borrower,and upon Borrower's halts,paraoftal rsprasanGttivaa,ellCC$S$8r$
and assigns,and shall hives to the benefit of Lender end its successors and assigna.
NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING AGENCIES, Please notify us If we report any tnaccursto
fnlorntatbM about your acctsunt(s to a coraumer reporting agency. Your written notice describing the specific inacewracy(les)should be sent to us at
the following address;WESTA RICA BANK LOAN SERYLS P,O.BOX 1190,MAC#A-1E SUISUN,CA 94596-119D
GENERAL PROVISIONS, Lander my detay or forgo enforcing any offs this Car wemedlss under this Nots without losing them. Botrower and any
mer Person who signs, guarantees of endorses this Note, to the extent allowed by law, waive arty applicable statute of Ihtr}tations, pfesentmsnt,
demand to(payMant,and no**of dishonor. Upon any change in the teams of this:Note,and unless otherwise expressly stated in wrifing,no party
who signs this Note, whether as maker,guarantor,accommodation maker or endorser,shelf be released from liability. All such parties agree that
Lender may renew or extmnd(repeatedly and for any length of tune)this loan or release arty party or guarantor of cofleleral:of Impair,fail to realize
upon or perfect Lsirider's security Interest in the Collateral;and take any other ecilon deemed necessary by f endat without the consent of or notice to
anyone. All such partielt also agree that Lender may modify this loan without Brie consent of or notice to anyone other than the parry with whom the
modification is made, The obligations undar this Note are joint and several.
PRIOR To 314Nff+G THIS NOTE, BORROWER READ AND UNJ>ERSTOOD ALL THE PROVISIONS OF THIS NOTE,INCLUDING THE VARIABLE
INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.
BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.
BORROWER'
i OU$1140 AUTHORITY OF CONTRA COSTA COUNTY
6
fly, By-,
a AN, S C p Y:TIUDY TAMAYO,-DEPUTY-EXEMVIi7MFWCTOR o
of HOUSING AUTHORITY OF CONTRA COSTA HORSING AUTHORITY OF CONTRA COSTA
COUNTY COUNTY
These ciOCUMents MUSt be Signed
Prior to
"m No tawwrew..s,7=14,Gy,.wbrrlF+.AWirefiwt.I.,lip.M, ='..4 T I14,0**
4
in Order to be valid. if of-t signed
by that deter they will expire
JUL. 2.2004 12.15PM W STA ERICA BANK NO.958 P.4
DISBURSEMENT REQUEST AND AUTHORIZATION
VAN 1.11 lei
Rafaranoes In the shaded sire*.Ara for Lendaee use Only and do net limit iha appppUcabillty vl this dr�nrnsnt m any particular
loan or#tam.
An it4M ahava t ontatnun b*an omitted due tis taart tan llRdtatlon3=
Btarr roam HOUSING AUTHORITY OF CONTRA COSTA Lander: WES'IAMERiCA BALK
COUNTY FAIRFIELD CRE01T ADMINISTRATION
$133 ESTUDILLO aTREE 2400 HILMORN ROAD.SECOND FLOOR
MARTINEZ,CA 94553 FAIRFIELD,CA 945$$
LOAN TYPE. This Is a Variable Rata Nvndisolosabis Revolving Line of Credit Loan to a Corporaticin for$1,000,000.00 due on March 31,2005, The
raterems,rata(Wsstanlat Ca Bank's Index Plate,Currently 4,2501%),resulting to an initial rate of 4.250.
PRIMARY PUf4POSE OF LOAN, 'fits+primary purpose of this loan 18 for:
(
Personal,Family,or Houtsahoid Purpo*as or Pasvnal Investmi nt-
gu:lns4s(Including Weal Estates Inv"lment).
SPECIFIC PURPOSE. The specific purpose of this loan Is: SUPPORT CURRENT ASSETS.
DISBURSEMENT INSTRUCTIONS. ISorTower ulxlerslanda tt'utt no toen prvcsade will be dIsbumad unbt all of Lander's conditions for making the loan
have been satisfied. Please disburse the loan Procasdc of'$1,000,000.00 as follows:
Undisburasd Funds: $1.000,000.00
Nota Principal: $7,000.000.04
CHARGES PAID IN CASH. Borrower has paid or will pay In cash as agreed the fallowing Charges:
Prepaid Finance Charges Paid In Casthi $0,00
Other Charges Paid In Cash-. 5150,40
$150.00 DOCUMENTATION FEE
Total Charges Paid in Cash. $150.00
FINANCIAL. CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND WARRANTS TO LENDER THAT THE
INFORM411ON PROVIDED ABOVE IS TAVE AND CORRECT AND THAT THERE HAS BEEN NO MATERIAL ADVERSE CHAN13E IN
00RROWERt'S fINANC:IAL CONDITION AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS
AUTHORIZATION IS DATED JULY 1,200+x.
BORROWER:
HOUSING AUTHORITY OF CONTRA COSTA COUNTY
By: By:
RczwAFT,—V5Aj5 SEC ERM—DIRECTOR Ci, of
of HOUSING AUTHORITY OF CONTRA COSTA HOUSING AUTHORITY OF CONTRA COSTA
COUNTY COUNTY
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wJ(1 r40 r„Wq�+'.ue,wml Gw.XlXrI MWiw 1�i,NMr.1,r.VNi7,�► M ggrar wr.a .cF ItNn1lrWutlA�R'fAawsu+a,w nn,at PMi
JUL. 2,2004 12:15PM WESTAMERICA BANK NIS.558 Pd5
NOTICE OF FINAL AGREEMENT
lip
low
Roterances in the shaded arae riro for Wndar's use only and do not limit the APresbfllty of hila dts�►mont tc eny partrcuiar ksarr err Item.
#tern above contta#nln "",has fawn omlttad due to text ten timitalk",
Borrower. HOUSING AUTHORITY OF COMA COSTA Lender: WESTAMERICA SANK
COUNTY FAIRFIELD CREDIT AGMNISTRATION
3133 ESTUDILLO I rMEr 2400 H#LOORN ROAD,SECOND FLOOR
MARTINEE,CA 04853 FAIRRELO,CA ti+S3
BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT. (A) THE WRITTEN LO
AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, {B} THERE ARE N
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THE WRITTEN LOAN AGREEMEN
MAY NOT BE C014T`RADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUEN
ORAL AGREEMENTS OR UNDERSTANDING$ OF THE PARTIES.
As used In this Notice,the following taints have the toltowing manningst
Wan, The?arm"Loan'mown the following described loan: a Variable Rate Nondisclasebte Revolving Lina of Credit Latin to a Corporatlon
for$1,040,000.00 due on W0131,200 The reference rine(weatamedca Bank's Index Rate,Currently 4.250°,0,resulting in an initial rate of
4.250.
Loan ASresmmettt. The tette 'Loan Agreement" means one or more ptorn#ses, promissory notes, agrearnants, undertakings, security
aprssm4nts,deeds of trust or other documents,or comm trnents,or any combination of those actions or documents,relating to the lawn,
Inctuding MOW fimilation the Wowing,
LOAN DOCUMENTS
Promise"Note Dlibursement Request and Al f Wi:a#Ion
Notice of Final AWsorr'iont
t7RMR TO DRAW(Must be returned with ooarding pkq.)
pattlax, The term`Partes"moans WESTAMERICA BANK and any and all aniitlos or Individuals who are obileated to repay the loan or
nave pledged property as security for the Loam,including without#imiltabon the following:
Burrower: HOUSING AUTHORITY Of CONTRA COSTA COUNTY
Fath Party who slww k+stow,other than t ILWAMERICA RANK,acknowledges,represents,end wefrsnts to WESTAMERICA BANK that It his
received,read and understood this Notice of Anal Agreement. TNs Notice Is dated July 1,20"
BORROWER:
HOUSING AUTHORITY CIF CONTRA COSTA COUNTY
13y,0SERT W&-=N,-MRV 3W7 IRM EMP V By:
O,DtMT-=CVrVrs OIT41MR G
of HOUSING AUTHORITY OF CONTRA COSTA HOUSING ALIT HOAtTY OF CONTRA COSTA
COUNTY COUNTY
LENDIIA.
WESTAMERICA SANK
X
Authorized gnor
wpYerr,�,.,,rr,v.,►.awmt 4s."4WtlMww ur irr.aa, �n�w+r+r�L ts��rrtww�.trrtttuaui.re rM.7 Nth two