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City of San Leandro <br />Meeting Date: September 4, 2018 <br />Resolution - Council <br />Agenda Section:File Number:18-391 CONSENT CALENDAR <br />Agenda Number: <br />TO:City Council <br />FROM:Jeff Kay <br />City Manager <br />BY:Tom Liao <br />Community Development Director <br />FINANCE REVIEW:David Baum <br />Finance Director <br />TITLE:RESOLUTION of the City of San Leandro City Council to Substitute Collateral for <br />the Section 108 Guaranteed Loan from the United States Department of Housing <br />and Urban Development (HUD) for the Construction of the San Leandro Senior <br />Community Center by Designating as Collateral $190,635.20 in the City’s <br />General Fund Restricted Reserve <br />WHEREAS, the City previously applied for and received a two million five hundred <br />thousand dollars ($2,500,000) Section 108 guaranteed loan from the United States Department <br />of Housing and Urban Development (“HUD”) for the construction of the San Leandro Senior <br />Community Center (“Section 108 Loan”); and <br />WHEREAS, as part of the Section 108 Loan, the City executed a promissory note <br />numbered B-08-MC-06-0017, whereby the City promised to repay the Section 108 Loan <br />(“Section 108 Loan Note”); and <br />WHEREAS, repayment of the Section 108 Loan Note is to come from federal Community <br />Development Block Grant (“CDBG”) Funds provided to the City; and <br />WHEREAS, the terms of the original Section 108 Loan required the City to record a deed <br />of trust against the Senior Community Center property as collateral for the Section 108 Loan <br />Note. However California law prohibits the City from recording a lien against publically owned <br />property; and <br />WHEREAS, since the City has never provided the deed of trust on the Senior Community <br />Center property, HUD requests that the City provide alternate collateral in the event that CDBG <br />Funds are not available to the City for loan repayment; and <br />WHEREAS, the City has proposed, and HUD has agreed, that the City can provide <br />restricted General Fund Reserves as collateral; and <br />Page 1 City of San Leandro Printed on 8/28/2018 <br />187