HomeMy WebLinkAboutRES NO 100-99100-99
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
BAKERSFIELD AUTHORIZING THE MAYOR TO EXECUTE
A PROMISSORY NOTE FOR LOAN OF $2,100,000.00 FROM
CITY'S EQUIPMENT MANAGEMENT FUND TO CITY'S
STATE GAS TAX FUND.
WHEREAS, annually the City of Bakersfield receives $3.5 million in gas tax monies
from the State of California; and
WHEREAS, this gas tax money is placed in the City's State Gas Tax Fund and is
used exclusively to repair, repave, maintain and construct roads in the City of Bakersfield;
and
WHEREAS, in 1998, the weather conditions were such that the City's streets
suffered more damage than had previously been anticipated; and
WHEREAS, it is more fiscally prudent to repair the streets now than to defer the
repair until the future; and
WHEREAS, currently, the State Gas Tax Fund does not have adequate funds to
accomplish the repair work that is needed to prevent the damage from getting any worse;
and
WHEREAS, the City's Equipment Management Fund currently contains a fund
balance which would enable a loan to be made without impacting the City's equipment
maintenance and replacement; and
WHEREAS, the loan would be for a period of five (5) years, would accrue interest
at the rate of six percent (6%) per year and would be repaid in $500,000.00 annual
installments commencing July 15, 2000 and continuing thereafter until the entire amount,
with interest, has been repaid to the Equipment Management Fund; and
WHEREAS, currently, a portion of the City's State Gas Tax allotment is pledged to
secured repayment of bond indebtedness, the annual allotment is such that the loan
repayment would not be affected.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF BAKERSFIELD as follows:
1. The above recitals are true and correct;
-- Page 1 of 2 Pages --
The Mayor is authorized to execute the Promissory Note evidencing a loan
from the City's Equipment Management Fund to the City's State Gas Tax
Fund. Such Promissory Note is attached hereto as Exhibit "A".
I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the
Council of the City of Bakersfield at a regular meeting thereof held on JUN 8 0 19~ ,
by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
COUNCILMEMBER CAI~,~;(3N ~MOND, MAGGARD, COUCH, ROWLES, SULLIVAN, SALVAGGIO
COU NCiLMEMBER_N'__~i~J E.
COUNCILMEEMBER I,,JO N ~--
COUNCILMEEMBER N~3 N ~_
of the
APPROVED JUN 3 0 199'9
MAYOR of Bakersfield
APPROVED as to form:
BART J. THILTGEN
City Attorney
JANICE SCANLAN
Deputy City Attorney
s:~council~resos~gastax.wpd
-- Page 2 of 2 Pages --
EXHIBIT "A"
PROMISSORY NOTE
(With Interest)
(Date)
1. PARTIES
"Borrower" means City of Bakersfield's State Gas Tax Fund. "Lender" means
City of Bakersfield's Equipment Management Fund.
2. BORROWER'S PROMISE TO PAY
In return for a loan received from Lender, Borrower promises to pay the sum of
TWO MILLION ONE HUNDRED THOUSAND AND 00/100 DOLLARS ($2,100,000.00
U. S. ) (this amount is called "principal"), with interest, to the order of the Lender. The
term of this loan is five (5) years and this loan matures on July 15, 2004 ("Maturity
Date").
3. INTEREST
Interest shall accrue at the rate of six percent (6%) annually on the unpaid
principal.
4. PROMISE TO PAY SECURED
Borrower's promise to pay is secured by a pledge of the State Gas Tax monies
to be received by the City of Bakersfield's State Gas Tax Fund.
5. MANNER OF PAYMENT
The Borrower agrees to pay the entire unpaid principal amount loaned
hereunder in five payments of $500,000.00 commencing July 15, 2000 and annually
thereunder until the entire principal amount and all accrued interest has been repaid.
6. BORROWER'S RIGHT TO PREPAY
Borrower has the right to make payments of principal at any time.
Borrower may make a full prepayment or partial prepayments without paying
any prepayment charge.
Lender will use all prepayments to reduce the amount of principal that is owed
under this Note. If Borrower makes a partial prepayment, there will be no changes in
the Maturity Date.
7. OBLIGATIONS OF BORROWER UNDER THIS NOTE
The Borrower is fully, obligated to keep all of the promises made in this Note,
including the promise to pay the full amount owed.
BY SIGNING BELOW, Borrower accepts and agrees to the terms and covenants
contained in this Note.
Borrower
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