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RESOLUTION NO. 43-11
A RESOLUTION OF
THE CITY COUNCIL OF THE TOWN OF LOS ALTOS HILLS
AMENDING THE CITY COUNCIL ADOPTED 2011-12 BUDGET
IN THE AMOUNT OF $1,244,708.42 TO PREPAY
LEASE AGREEMENT#04-070-AF DATED SEPTEMBER 16,2004
FOR THE CONSTRUCTION OF THE TOWN HALL FACILITY
AND AUTHORIZING THE CITY MANAGER TO
TRANSMIT PAYMENT TO THE LENDER, CITY NATIONAL BANK
WHEREAS, the City Council of the Town of Los Altos Hills approved and adopted the
Operating and Capital Improvement Program Budgets for the Town of Los Altos Hills for fiscal
year 2011-12 on the 16th of June 2011 which includes $195,964.90 for debt service on the Town
Hall facility; and
WHEREAS, the Town borrowed $2,000,0000 in 2004 for the construction of the Town Hall
facility at an interest rate of 4.65% with a final maturity on the 16th of September 2019, attached
hereto as EXHIBIT A; and
WHEREAS, in accordance with Section 9.2 of the financing agreement the Town may prepay
the unpaid principal balance in accordance with the Prepayment Option price set forth in
Appendix B of the financing agreement and attached hereto as EXHIBIT B; and
WHEREAS, low risk investments in compliance with the City Council adopted Investment
Policy and as authorized under California Government Code Section 53601 are currently
yielding significantly less than 1.00%per year; and
WHEREAS, the Finance and Investment Committee reviewed opportunities to invest Town
funds with PFM Asset Management at their special meeting on September 12, 2011 and voted
unanimously to recommend that the City Council use accumulated unreserved, undesignated
fund balance to pay off the Town Hall loan thereby realizing considerable interest savings when
compared to continued investment in approved securities; and
WHEREAS, the Town's General Fund budgeted unrestricted, undesignated fund balance was
projected to be $2,974,600 on June 30, 2012 and sufficient liquid funds are available to make the
prepayment;
NOW THEREFORE, the City Council of the Town of Los Altos Hills does hereby resolve as
follows:
1. The City Council does hereby approve an amendment the Town of Los Altos Hills'
adopted Operating and Capital Improvement Program Budget for the fiscal year
2011-12 to prepay the outstanding debt for the construction of the Town Hall facility
in the amount of$1,224,708.42.
Resolution No.43-11 Page 1
2. The City Manager is hereby authorized transmit the prepayment to the lender, City
National Bank.
The above and foregoing resolution was passed and adopted by the City Council of the
Town of Los Altos Hills at a special meeting held on the 15th day of September, 2011 by
the following vote:
AYES: Summit, Larsen,Mordo, Waldeck
NOES: None
ABSTAIN: None
ABSENT: Radford
BY: )
�,
Ginger it, Mayor
ATTEST:•- ..
/ '
- Deborah Padovan, City Clerk
Resolution No.43-11 Page 2
• • Exhibit A
$2,000,000
LEASE AGREEMENT
dated as of September 16, 2004, by and between the
TOWN OF LOS ALTOS HILLS
and Municipal Finance Corporation
EXHIBIT A
Maturity
(September 16) Principal Amount Interest Rate
2019 $2,000,000 4.65%
Resolution No.43-11 Page 3
0 Exhibit B
APPENDIX B
SCHEDULE OF LEASE PAYMENTS
PM (1) Lease •
T Payment Lease (2)Prepayment
It Date Payment Option Principal Interest
1 9/16/2005 $93,000.00 $0.00 93,000.00
2 3/16/2006 97,982.45 51,482.45 46,500.00
3 9/16/2006 97,982.45 52,679.42 45,303.03
4 3/16/2007 97,982.45 53,904.21 44,078.24
5 9/16/2007 97,982.45 55,157.49 42,824.96
6 3/16/2008 97,982.45 56,439.90 41,542.55
7 9/16/2008 97,982.45 57,752.13 40,230.32
8 3/16/2009 97,982.45 59,094:86 38,887.59
9 9/16/2009 •97,982.45 1,584,081.13 60,468.82 37,513.63
10 3/16/2010 97,982.45 1,520,968.92 61,874.72 36,107.73
11 9/16/2010 • 97,982.45 1,456,389.34 63,313.31 34,669.14
12 3/16/2011 97,982.45 1,390,308.30 64,785.34 33,197.11
13 9/16/2011 97,982.45 1,322,690.87 66,291.60 31,690.85
14 3/16/2012 97,982.45 1,253,501.33 67,832.88 30,149.57
15 9/16/2012 97,982.45 1,182,703.14 69,409.99 28,572.46
16 3/16/2013 97,982.45 1,104,816:44 71,023.78 26,958.67
17 9/16/2013 97,982.45 1,031,051.23 72,675.08 • 25,307.37
18 3/16/2014 97,982.45 955,570.99 74,364.77 23,617.68
19 9/16/2014 97,982.45 878,335.83 76,093.75 21,888.70
20 3/16/2015 97,982.45 799,304.96 77,862.93 20,119.52
21 9/16/2015 97,982.45 718,436.61 79,673.25 18,309.20
22 3/16/2016 97,982.45 635,688.08 81,525.65 16,456.80
23 9/16/2016 97,982.45 551,015.64 83,421.12 . 14,561_33
24 3/16/2017 97,982.45 462,087.01 85,360.66 12,621.79
25 9/16/2017 97,982.45 373,868.26 87,345.30 10,637.15
26 3/16/2018 97,982.45 283,598.42 89,376.08 8,606.37
27 9/16/2018 97,982.45 191,229.80 91,454.07 6,528.38
_28 3/16/2019 97,982.45 96,713.62 93,580.38 4,402.07
29 9/16/2019 97,982.45 0.00 ._ 95,756.06 2,226.39
TOTALS: $2,836,508.60 $2,000,000.00.. $836,508.60
NOTES:
(1) Lease payment#1 is due on the first anniversary of the Lease Closing date and subsequent payments
are due semi-annually thereafter.
(2) Prepayment Option amount is exclusive of the Lease Payment due on the same date. The Schedule of
Prepayment Options include a prepayment premium,calculated as follows:
Payment# Premium
9 thru 15 2.00%
16 thru 23 1.50%
24 thru 28 1.00%
Resolution No.431/11 Page 4