HomeMy WebLinkAbout25R - AGMT TERMINATE AGMTREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
AUGUST 18, 2008
TITLE:
TERMINATE AGREEMENT WITH SOUTHLAND
ECONOMIC DEVELOPMENT CORPORATION
FOR THE EMPOWERMENT ZONE WORKING
CAPITAL LOAN PROGRAM
,~~~~2.
CITY MANAGER
RECOMMENDED ACTION
Terminate the agreement with
for the Empowerment Zone
understanding that any net
accounts receivables would
Corporation.
Southland Economic Development Corporation
Working Capital Loan program with the
proceeds from the judgment and any other
be returned to the Santa Ana Empowerment
SANTA ANA EMPOWERMENT CORPORATION BOARD ACTION
At its regular meeting of July 23, 2008, by a vote of 12:0 (Arjonilla,
Carricchi, Martinez, Medrano, Price, Rama, Reyna, absent), the Santa Ana
Empowerment Corporation Board recommended that the City of Santa Ana
terminate its agreement with Southland Economic Development Corporation
for the Working Capital Loan program with the understanding that any net
proceeds of the judgment, and any other accounts receivables would be
returned to the Santa Ana Empowerment Corporation.
DISCUSSION
On April 19, 1999, prior to the creation of the Santa Ana Empowerment
Corporation (SAEC), the City Council authorized the funding of a Working
Capital Loan program utilizing Federal Empowerment Zone funds. An
agreement for $250,000 was executed by the City with Southland Economic
Development Corporation to develop and administer a revolving working
capital loan program for businesses located in the Empowerment Zone.
Southland drew down $199,357.97 of the $250,000 available pursuant to the
agreement for three loans.
All but one loan have been repaid in full, and no new loans have been
issued since 2004. The loan pool experienced one default. Southland was
CLERK OF COUNCIL USE ONLY:
APPROVED
^ As Recommended
^ As Amended
^ Ordinance on 1S` Reading
^ Ordinance on 2"d Reading
^ Implementing Resolution
^ Set Public Hearing For_
CONTINUED TO
FILE NUMBER
25R-1
Terminate Agreement with Southland EDC
August 18, 2008
Page 2
diligent in its oversight of the loan and eventually filed for, and has
received, a judgment from the court against the business and its owner.
Due to the lack of activity in this program, staff has met with
representatives from Southland and recommends terminating the agreement
with the provision that Southland continue to pursue its collection of
the outstanding judgment with all net proceeds being returned to the
SAEC.
FISCAL IMPACT
Southland Economic Development Corporation will remit any remaining loan
funds, which are estimated to be $40,000 after servicing fees and
expenses. Funds will be deposited to account number 129-01-5799.
APPROVED AS TO FUNDS AND ACCOUNTS:
Cynt a J. Nelson Francisco Gutierrez
Deputy City Manager Executive Director
for Development Services Finance & Management Services Agency
Community Development Agency
CJN/LAS/DS/mlr
081808 TerminateContract-SouthlandEDC
25R-2