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File Number: 16-336 <br />The Davis Street Primary Care Clinic (the PCC) provides medical services, especially to very <br />low and low income households in the community. Its service delivery model integrates with <br />its social services; for example, sick children, including those who are customers in DSFRC’s <br />child care facilities, have access to medical care at the PCC; patients seen in the PCC with <br />uncontrolled diabetes can consult with nutrition counselors at the adjacent Food Bank and <br />guided toward selecting healthier meal choices. The addition of the PCC, directly attached to <br />a dedicated Family Resource Center, provides another community resource, especially for the <br />most at need. <br />DISCUSSION <br />DSFRC seeks to amend the maturity of its current loan from the City of $1.5 million to <br />leverage other funds to cover operating costs for the next 18 months of operation of the PCC. <br />The lag-time for initial reimbursement to new FQHC’s has been averaging nationwide at 18 <br />months, after which time, FQHC’s are reimbursed on a quarterly basis. Due to delays in <br />opening, the first significant reimbursement to the PCC is not expected until the end of 2016. <br />As security for the Amended Loan, the City continues to hold a first deed of trust on 1190 <br />Davis Street, which is used by DSFRC as a child care center. A May 2014 appraisal of 1190 <br />Davis Street valued the land and real property at $1.8 million. <br />As of June 30, 2015, it is the City’s understanding that DSFRC had other long term debts <br />totaling $2.3 million. These other debts bear interest of 4.5% to 4.9%. One of these debts <br />with Wells Fargo Bank (Bank) requires a debt service coverage ratio of 1.15 to 1. This <br />covenant has not been met and the Bank has decided to take no action against DSFRC, <br />according to Note 8 in its 2015 audit. <br />The City Manager recommends that the City Council authorize him to negotiate and execute an <br />amendment to the term of the City’s loan to DSFRC, subject to approval as to form by the City <br />Attorney. <br />Page 2 City of San Leandro Printed on 6/28/2016