Resolution 2019-70RESOLUTION NO.2019-70
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY
ADOPTING A POLICY FOR THE PROVISION OF HOUSING LOANS
TO NEWLY APPOINTED CITY OFFICERS, DEPUTY CITY
ADMINISTRATOR, DEPARTMENT HEADS AND/OR DEPARTMENT
DIRECTORS
WHEREAS, the recruitment and hiring of qualified high-level management employees is
essential to the efficient operation of the government of the City of Gilroy ("City"); and
WHEREAS, housing costs, the relative unavailability of new housing, and current housing
financing conditions in the San Francisco Bay Area, and particularly in the City and adjacent cities,
continue to be a significant disincentive to persons relocating to this area and an obstacle to the
recruitment and hiring of qualified high-level management employees; and
WHEREAS, these conditions are not only an obstacle to recruiting and hiring qualified high-
level employees, but also tend to discourage those employees from living in the City; and
WHEREAS, the City Council believes that the interests of the City would be best served by
encouraging new City Council appointed officers, deputy city administrator and department heads
and/or department directors to live inGilroy to ensure their ready availability and familiarity with the
Community; and
WHEREAS, the City regularly invests its funds in a variety of financial securities are varying
earning rates, some of which may be below current mortgage rates; and
WHEREAS, a portion of the City's reserves may be utilized to accomplish the intent of the
City Council to promote the recruitment and hiring qualified high-level employees and to encourage
those employees to live in the City of Gilroy and still produce equivalent investment income; and
WHEREAS, the City Council desires to adopt a policy and guidelines to provide financing
assistance in appropriate cases to newly appointed City Council officers, deputy city administrator,
department heads and/or department directors to assist those employees in purchasing a residence
within the City; and
WHEREAS, in order to continue to promote the objectives described in this resolution, the
City Council desires to create the Executive Recruitment Housing Program to provide housing
assistance to accommodate changing market conditions and hiring needs; and
that:
NOW, THEREFORE BE IT RESOLVED, that the City Council of the City of Gilroy
SECTION 1
The City Council finds that the recruitment and hiring of qualified high-level employees to fill the
positions of newly appointed City Council officers, deputy city administrators, department heads
and/or department directors (hereinafter "Employee or Employees")is of key importance to the
RESOLUTION NO.2019-70
4836-9460-7530v2
JK04706083
0)
functioning of the City government, that it is in the interest of the City to encourage such
Employees to live within the City, that the provision of housing assistance may, in certain cases,
enhance the ability to accomplish these purposes, and that housing assistance can be provided
without significantly affecting the financial status of the City.
SECTION 2
The City Council hereby declares that it is the policy of the City, in appropriate cases, to assist
Employees to reside within the City by making available, as an additional benefit of
employment, a secured loan of City funds to acquire local housing when necessary to secure the
Employee's service. The need for housing assistance shall be reviewed on an individual basis
and shall not be available as a matter of right to any newly appointed Employee. In addition, the
terms of any loan offered pursuant to this policy shall be negotiated based upon the individual
circumstances surrounding the appointment of each Employee, provided that the loan terms are
consistent with the provisions of this resolution.
SECTION 3
Loans made pursuant to this policy shall be available only upon the following terms and
conditions, and any consistent terms and conditions deemed reasonable by the City:
a) Eligible Positions. Only Employees after the adoption of this resolution are eligible for
housing loans under this program.
b) Employment Agreement Required. Loans shall be a benefit of employment in
consideration for an Employee's services, documented in a separate written agreement
entered into at or near the time of initial appointment. Employees offered housing loans
must purchase housing within the first twelve (12) months of the employment start date
or shall be ineligible to receive a housing loan under this program. Such loan agreement
shall be reviewed by the City Attorney as to form and approved by the City Council.
c) Loan Amount. Loans shall not exceed $800,000 as of October 1, 2019 and may be
adjusted annually according to the San Francisco Area Consumer Price Index (CPI-U) as
of October 1 of each subsequent year.
d) General Loan Requirements. Loans offered pursuant to this program shall be available
only under all of the following conditions:
(i) The loan is solely for purchase of residential property within the City
(ii) The new home shall be used as the principal residence of the Employee;
(iii) Loans are conditioned on future performance of substantial service by the
Employee and shall be due and payable in full upon sale or transfer of the
property by the Employee and within six (6) months of either the termination for
any reason of the Employee's employment with the City or termination of the use
of the property as the principal residence of the Employee, whichever occurs first.
If the Employee should retire on disability or die during the period of the loan, the
RESOLUTION NO. 2019-70
4836-9460-7530u2
JH104706083
3
loan shall be due and payable in full within six (6) months of the date of disability
or death;
(iv) Loans shall not be assignable or transferrable; and
(v) At the time of purchase, the loan to appraised value of the residence should not
exceed 80%.
e) Tax Treatment of Loans. Employees are strongly encouraged to seek independent advice
from their own tax professional regarding the tax implications regarding the loans issued
pursuant to this policy.
(f) Loan Security. Loans shall be secured to the satisfaction of the City Administrator, City
Attorney, and Director of Finance and evidenced by a promissory note secured by a Deed
of Trust.
(g) Interest Rate. Loans shall have a fixed interest rate and shall be established in accordance
with the rate of return of the California Local Agency Investment Fund (LAIF)
administered by the California State Treasurer and will be based on the prevailing LAIF
rate of return on the last valued date prior to making the loan. In no event shall any loan
be for a term exceeding 30 years.
(h) Refinance Requirements. If at any time during the term of a loan, commercial or other
applicable financing becomes available at or below the interest rate applicable to the
City loan, the employee shall refinance and retire the City loan.
(i) Source of Loan Funding. Loans shall only be made from City funds which would
otherwise be available and invested in financial securities with varying rates of return.
SECTION 4.
In hiring and appointing the Employee, the City Administrator is authorized to act in
accordance with the policy described in this resolution as necessary to fulfill recruitment and
hiring needs for those Employees. The City Administrator is authorized to determine in each
case whether to offer housing assistance as an additional benefit of employment and the terms of
any assistance provided. Any loan shall be consistent with the provisions of Section 3 of this
resolution, however, the City Administrator may impose additional and/or more restrictive
conditions than those in Sections 3.
PASSED AND ADOPTED this 21St day of October, 2019 by the following roll call vote:
AYES: COUNCILMEMBERS:
TUCKER, and VELASCO
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
BRACCO, LEROE-MUNOZ, TOVAR,
BLANKLEY, MARQUES
NONE
RESOLUTION NO. 2019-70
4836-9460-7530v2
JH104706083
APPROVED: 44-,
Roland Velasco, Mayor
ATTEST:
Freels,
RESOLUTION NO. 2019-70
4836-9460-7530v2
JH104706083
I, SHAWNA FREELS, City Clerk of the City of Gilroy, do hereby certify that the
attached Resolution No. 2019-70 is an original resolution, or true and correct copy of a city
Resolution, duly adopted by the Council of the City of Gilroy at a regular meeting of said held on
Council held on the 21 st day of October, 2019, at which meeting a quorum was present.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of
the City of,Gilroy this 28"' day of October, 2019.
SL Free s,
City Clerk of the City of Gilroy
(Seal)