Consent 1.E.
Regular City Council Meeting
- Meeting Date:
- 04/11/2011
- TITLE
- YMCA Proposal to Pay Principal Only on Two Outstanding Revolving Loans
- PRESENTED BY:
- Patrick M. Weber, Financial Services Manager
- Department:
- City Hall Administration
Presentation:
PROBLEM/ISSUE STATEMENT
City Council approved two loans for the YMCA. The first loan was approved on 03/27/96 in the amount of $157,000 with a maturity date of 04/01/08. The second loan was approved on 09/01/00 in the amount of $250,000 with a maturity date of 09/01/05. The two loans are delinquent with a combined Principal balance of $269,109 and accrued interest of $138,941.
The YMCA has submitted a proposal to the Revolving Loan Fund Committee requesting that the accrued interest be written off and remaining Principal be paid in full. The committee voted by phone to recommend that the City Council accept the YMCA’s proposal.
The YMCA has submitted a proposal to the Revolving Loan Fund Committee requesting that the accrued interest be written off and remaining Principal be paid in full. The committee voted by phone to recommend that the City Council accept the YMCA’s proposal.
ALTERNATIVES ANALYZED
Accept the YMCA offer and retire the outstanding debt or don’t accept the YMCA proposal and risk never getting any settlement on the loans.
FINANCIAL IMPACT
The $269,109 would become available for future loans in downtown. Writing off the accrued interest would not have any adverse affects on the Revolving Loan Fund.
RECOMMENDATION
The Revolving Loan Fund Committee and staff recommend accepting the YMCA offer to pay the $269,109 principal balance and write off of the accrued interest.