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File #: 19-2308    Version: 1 Name: Loan Agreement
Type: Administrative Item Status: Administrative
File created: 9/17/2019 In control: Town Council
On agenda: 10/1/2019 Final action:
Title: Consider Adoption of Resolution 19-3586 Approving Partial Prepayment of State Water Resources Control Board Loan Agreement No. 13-802-550, Project No. C-06-7846-110 in the Amount of $1,152,031 and Resulting FY 2019/20 Budget Adjustment.
Attachments: 1. Resolution
Yountville Town Council Staff Report


DATE: October 1, 2019

TO: Mayor and Town Council

FROM: Celia King, Finance Manager; Steven Rogers, Town Manager

TITLE
title
Consider Adoption of Resolution 19-3586 Approving Partial Prepayment of State Water Resources Control Board Loan Agreement No. 13-802-550, Project No. C-06-7846-110 in the Amount of $1,152,031 and Resulting FY 2019/20 Budget Adjustment.
Body

DISCUSSION/BACKGROUND
In June 2014, the Town of Yountville obtained a low-interest loan from the State Water Resources Control Board (SWRCB) for the purpose of completing improvements to the wastewater treatment system. By agreement, the Veterans Home of California contributes an equal share of the costs of these improvements. The California Department of Veterans Affairs had not determined if they desired to make a payment in full or participate in the debt financing and make annual debt payments at the point in time the Town needed to finalize the loan agreements. As such, the loan agreement amount reflected the full amount as if the Veterans Home was participating in debt financing. When the loan was then secured, the Veterans Home paid its 50% share of the project construction costs in the amount of $1,387,936 in full, directly to the Town. This payment has been held in the Wastewater Treatment Capital Recovery Fund (63) and used over time to contribute to the annual loan principal payments to the SWRCB.

As the Town has the ability to prepay all or a portion of the outstanding principal balance of the SWRCB loan without penalty, staff recommends forwarding the remainder of the Veterans Home share to the SWRCB, rather than continuing to hold the funds and pay over time. The results of this action will be that the term of the loan will be revised to reflect a shortened amortization schedule, producing a savings in total interest paid. This savings amount is estimated to be approximately $250,000.

The Town currently holds $1,152,031 of the Veterans Home p...

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