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CDA Resolution 88-2COMMUNITY DEVELOPMENT AGENCY RESOLUTION NO. 88- 2 A RESOLUTION OF THE COMMUNITY DEVELOPMENT AGENCY OF THE CITY OF GILROY AUTHORIZING THE BORROWING OF MONIES FROM THE CITY OF GILROY AND THE EXECUTION OF AN AGREEMENT TO REPAY SUCH LOAN AND REIMBURSE THE CITY FOR COSTS INCURRED ON BEHALF OF REDEVELOPMENT EFFORTS WHEREAS, the Community Development Agency of the City of Gilroy (the "Agency") has determined that in order to carry out its redevelopment activities prior to adoption of a redevelopment plan for the Gilroy Community Redevelopment Project Area (the "Project Area"), which was established by City Council Resolution No. 88-6~ adopted on September 19, 1988, and to fund the activities of the Agency until such time that tax increments are available for the support of the redevelopment program, it is necessary that the Agency borrow an amount not to exceed One Hundred Thousand Dollars _ ($100,000.00) from the City of Gilroy; and WHEREAS, it is the understanding of the Agency that such a loan would be repaid out of tax increment funds, as such funds become available to the Agency pursuant to certain terms and conditions as set forth in the Loan and Repayment Agreement attached hereto as Exhibit A and by this reference incorporated herein (the "Repayment Agreement"); and WHEREAS, it is the understanding of the Agency that it will reimburse the City of Gilroy out of tax increment funds for all costs incurred for the benefit of the Agency, pursuant to the terms of the Repayment Agreement. BE IT NOW THEREFORE RESOLVED THAT: 1. The Agency hereby accepts the loan from the City of Gilroy in an amount not to exceed One Hundred Thousand Dollars ($100,000.00) pursuant to the terms and conditions set forth in the Repayment Agreement, and agrees to repay the loan out of tax increment funds as set forth in the Repayment Agreement; RESOLUTION NO. 88-2 2. The Agency agrees to reimburse the City for all costs incurred by the City on behalf of the Agency, including the cost of certain public improvements, pursuant to the terms and conditions set forth in the Repayment Agreement; and 3. That the Agency hereby authorizes the Chairperson of the Agency to execute the Repayment Agreement on behalf of the Agency. Passed and adopted this 19th day of 1988, by the following vote: September , AYES: NOES: AGENCYMEMBERS: GAGE, HALE, KLOECKER, MUSSALLEM, PALMERLEE, VALDEZ and HUGHAN. AGENCYMEMBERS: None ABSENT: AGENCYMEMBERS: None APPROVED: a~Hughan, ATTEST: /Susanne Stein~etz,~gency Secr~y 09/0s/ss #B009/B49702 RESOLUTION NO. 88-2 -2- EXHIBIT A LOAN AND REPAYMENT AGREEMENT The following is an Agreement, dated September 19, 1988, by and between the Community Development Agency of the City of Gilroy, hereinafter called "AGENCY" and the City of Gilroy, hereinafter called "CITY". WI TNE S S E TH WHEREAS, the CITY has determined that it is in the interest of the CITY to establish the Gilroy Community Redevelopment Project Area (the "Project Area") in the CITY; and WHEREAS, on July 13, 1983 the CITY duly adopted Ordinance No. 83-10, establishing the Community Development Agency of the City of Gilroy; and WHEREAS, the AGENCY is vested with the responsibility for formulating and carrying out necessary redevelopment projects within the CITY; and WHEREAS, concurrent with the execution of this Agreement, the CITY is appropriating One Hundred Thousand Dollars ($100,000.00) to the AGENCY for the purpose of carrying out redevelopment activities prior to the adoption of the Gilroy Community Redevelopment Plan (the "Plan") and to fund the activities of the AGENCY with regard to the Project Area until such time that tax increments are available for the support of the redevelopment function; and WHEREAS, said One Hundred Thousand Dollars ($100,000.00) will be used to fund staff time, expenses, overhead costs, consultants contract costs, use of CITY facilities and other related expenses in the formulation, coordination, administration and implementation of the Plan; and WHEREAS, said One Hundred Thousand Dollars ($100,000.00) will be loaned by the CITY to the AGENCY in the anticipation that such costs will be repaid by the AGENCY out of tax increment funds generated within the Project Area; and WHEREAS, the CITY and the AGENCY are each ready and willing to assume the relationship described herein; NOW, THEREFORE, the AGENCY and the CITY, for and in consideration of the mutual promises and agreements herein contained do agree as follows: 1. PURPOSE The purpose of this Agreement is to provide for the repayment by the AGENCY of a loan from the CITY in an amount not to exceed One Hundred Thousand Dollars ($100,000.00). Loan proceeds are to be used for administrative costs and expenses, including consultants' costs, incurred by the AGENCY, all of which are necessary for the formulation, coordination, administration and implementation of a Plan for the Project Area. 2. TERM OF AGREEMENT This Agreement shall be in full force and effect for a period beginning as of the date first above written and continuing until all loans hereunder are repaid and no further CITY loans are required. LOAN REPAYMENT TERMS The AGENCY agrees to repay the loan from the CITY in an amount not to exceed One Hundred Thousand Dollars ($100,000.00) for the AGENCY's costs and expenses in formulating, coordinating, administering and implementing the Plan for the Project Area. The loan shall bear interest at the lesser of twelve percent (12%) per annum, or the maximum interest rate permitted by law. The loan shall bear interest from the date that loan funds are drawn by the AGENCY and shall be repaid solely from tax increment funds generated within the Project Area. It is understood that in the event such tax increment revenues fail to yield enough revenue to repay this obligation, the AGENCY is under no obligation to the CITY to make such repayment from any further funds or resources it may acquire. In the event that the CITY authorizes by appropriate resolution any future loan(s), such loan(s) shall become a debt of the AGENCY and shall be reflected as Attachment 1, which shall be attached to this Agreement and made a part hereof as if fully set forth herein. Such future loans(s) shall bear interest at the rate set forth above. 4. REIMBURSEMENT TO CITY BY AGENCY The AGENCY agrees to reimburse the CITY for all costs incurred by the CITY in furtherance of the Plan for the Project Area. These costs include, but are not limited to, costs to the CITY for consulting services, legal services, staff time and other related administrative expenses. This debt shall bear interest at the rate set forth in Section 3 above. 5. REIMBURSEMENT FOR PUBLIC IMPROVEMENTS If the CITY and the AGENCY so authorize by resolution, the CITY may incur costs for public improvements on behalf of 2 the AGENCY. These costs shall become a debt of the AGENCY and shall be reflected as Attachment 2, which shall be attached to this Agreement and made a'part hereof as if fully set forth herein. These costs shall bear interest at the rate set forth above, and shall be paid to the CITY by the AGENCY in the manner provided in Section 5.1. 5.1. Upon receipt by the AGENCY of a cost certification statement bearing the signature of a duly authorized agent of the CITY and describing in detail all or any part of the costs hereinabove enumerated that have been actually incurred and paid by the CITY, the AGENCY shall cause to pay the CITY within ten (10) days the amount set forth in the statement, provided that sufficient tax increment revenues are available to pay such amount. It is>understood by the Agency and the CITY that such repayment shall be a debt of the AGENCY and shall be repaid solely from tax increments generated within the Project Area. 6. REPAYMENT SUBORDINATION It is agreed by the parties hereto that the repayment to the CITY pursuant to this Agreement is hereby subordinated to any and all payments necessary to satisfy the AGENCY's obligations in connection with any existing or future bonded indebtedness or obligation which may be incurred by the AGENCY for the benefit of the Plan or to the extent necessary for any bonded indebtedness for which the AGENCY has pledged as a security or source of repayment tax increment generated within the Project Area. 7. VALIDITY OF AGREEMENT If any provisions of this Agreement, or the application thereof to any person, party, transaction, or circumstance, is held invalid, the remainder of this Agreement, or the application of such provision to other persons, parties, transactions or circumstances, shall not be affected thereby. IN WITNESS WHEREOF, the Mayor of the City of Gilroy has caused the name of the City to be affixed to this Agreement, and the Chairperson of the Agency as authorized, has caused the name of the Agency to be affixed to this Agreement on the above date. COMMUNITY DEVELOPMENT AGENCY OF THE CITY OF GILROY CITY OF GILROY By By Roberta Hughan Mayor Roberta Hughan Chairperson ~200/B49702 I hereby certify that the foregoing is a full, true and correct copy of a resolution duly passed and adopted by the Community Development Agency of the City of Gilroy, California, at a meeting thereof, held on the 19th day of September, 1988. Secretary (Seal) I hereby certify that the foregoing is a full, true and correct copy of a resolution duly passed and adopted by the Community Development Agency of the City of Gilroy, California, at a meeting thereof, held on the 19th day of September, 1988. (Seal)