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HomeMy WebLinkAboutCC Resolution 12351 (Fire Chief Home Loan)RESOLUTION NO. 12351 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL APPROVING AND AUTHORIZING THE MAYOR AND THE CITY MANAGER TO EXECUTE A HOME LOAN AGREEMENT BETWEEN THE CITY OF SAN RAFAEL AND CHRISTOPHER R. GRAY WHEREAS, the City of San Rafael ("CITY") and Christopher R. Gray ("GRAY" or "FIRE CHIEF") entered into a Fire Chief Employment Agreement, dated August 6, 2007 by which CITY employed GRAY as its Fire Chief; and WHEREAS, the CITY and GRAY have determined it is necessary to amend the Fire Chief Employment Agreement so that CITY may provide a greater amount in housing assistance than originally thought necessary; and WHEREAS, the CITY has taken action under a separate Resolution to amend the Fire Chief Employment Agreement to reflect the new level of housing assistance to be provided to GRAY; and WHEREAS, the CITY and GRAY desire to enter into a Home Loan Agreement in order to provide GRAY with housing assistance while simultaneously appropriately protecting the City's investment and financial interests in making the housing loan available to GRAY. NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of San Rafael hereby approves and authorizes the Mayor and the City Manager to execute a Home Loan Agreement between the City of San Rafael and Christopher R. Gray, in the form attached hereto and incorporated herein. I, Jeanne M. Leoncini, Clerk of the City of San Rafael, hereby certify that the foregoing Resolution was duly and regularly introduced and adopted at a regular meeting of the San Rafael City Council held on the 17th day of September, 2007, by the following vote to wit: AYES: Councilmembers: Cohen, Heller, Miller, Phillips and Mayor Boro NOES: Councilmembers: None ABSENT: Councilmembers: None JEA Mth_ LEONCINI, City Clerk WACity Managers- WorkFile\Council Materia1\Reso1utions\2007\CSR Fire Chief-RESO home loan.doc CITV OF SAN RAFAEL WHEREAS, the City of San Rafael has hired Christopher R. Gray (hereafter "Gray") and entered into an Agreement to employ him as the Fire Chief for the City of San Rafael (hereafter "City"); and WHEREAS, it is necessary and determined to be appropriate to assist in facilitating the employment of Gray, to aid in the acquisition of a place of residence within the City; and WHEREAS, the City has determined that it will make available to Gray a sum up to Six Hundred Thousand ($600,000) dollars, as a loan, to be secured by a First Deed of Trust, for the purchase of residential real property located within the City of San Rafael, to be used as his principal family residence. NOW THEREFORE, IT IS HEREBY AGREED that the City, shall loan to Gray a sum up to Six Hundred Thousand ($600,000) dollars at an interest rate and on terms set forth hereinafter, which said funds shall be used solely and exclusively for the acquisition of Grays' principal family residence, pursuant to the terms and conditions set forth hereinafter. 1. City agrees to loan to Gray a sum up to Six Hundred Thousand ($600,000) dollars to assist in the purchase of a single-family residence for Gray and his family, which residence must be located within the territorial boundaries of City. The exact amount of the loan shall depend upon the final agreed purchase price of the residence purchased by Gray, but in no event shall the sum exceed Six Hundred Thousand ($600,000) dollars. 2. Gray agrees to pay a minimum of fifty (50%) percent of the purchase price of the home he acquires at time of close of escrow. 3. Gray shall repay City the principal sum lent to him by City, together with interest thereon, at the rate set forth in Paragraph 4. herein, said payments to consist of principal and interest payments amortized and described further in this paragraph and over a total period not to exceed thirty (30) years. Payments shall commence at close of escrow in connection with purchase of a residence by Gray, and continue monthly thereafter pursuant to the following payment schedule: Principal and interest shall be payable to City each month following close of escrow in connection with purchase of the Gray residence. Payments shall be amortized over the life of the loan, which shall be no longer than thirty (30) years in duration and which exact time period shall be determined and agreed upon by the parties prior to close of escrow All payments hereunder shall be made by such method as the City and Gray shall mutually approve. 4. It is intended that the interest rate to be paid on this loan shall be variable, but always be equal to the yield of the latest quarter -to -date LAIF rate earned by the City's investment portfolio, with the following exception: The loan rate shall remain fixed between each Gray — Home Loan Agreement Page 2 September 1, through August 31, and shall only be adjustable annually, based on the then amount of quarterly LAIF rate earned by the City's investment portfolio. The initial interest rate to be charged shall be 5.25 % and shall remain in effect through August 31, 2008; on September 1, 2008, and on each September 1st following, the interest rate charged to Gray shall be adjusted based upon the then reported quarter -to -date LAIF rate on the City's investment portfolio. This rate shall continue for the succeeding twelve (12) months, and there shall be no adjustment in the interest rate charged to Gray. 5. It is expressly understood by the parties hereto that the loan proceeds shall be used exclusively for the purchase of a principal place of residence for Gray and his family, located at 32 Ju ni pero Serra Avenue , San Rafael, California. Should Gray choose to relocate his principal family residence at some future time, or fail to occupy the property as his principal place of residence, all sums due and owing to City by Gray shall become immediately due and owing in full. 6. Prior to actual funding of the loan by City, Gray shall provide to City, for review and approval of the City Attorney, all of the following: A. A written appraisal from a City -approved appraiser, appraising the property to be acquired by Gray in an amount equal to at least 130% percent of the principal amount of the loan. B. A preliminary title report and commitment to provide a policy of title insurance indicating that Gray will be obtaining title to the subject property in a condition acceptable to City. C. Evidence that Gray has obtained appropriate policies of insurance covering liability, fire and other required perils, covering the subject real property and the improvements thereon, or evidence that said policies of insurance shall be issued and will be in force upon the close of escrow. 7. Gray may at any time pay all or a portion of the principal amount of this Note without the imposition of any prepayment penalty. 8. City may, at its sole option, designate an institutional or private Trustee or Administrator as its exclusive representative to collect the Note and administer the loan, provided that it shall first give written notice of said designation to Gray. 9. Gray shall be solely responsible for the payment of all taxes and insurance applicable to the subject real property at his own expense, and he shall, at his option, make such payments directly, or through the City or its designated Trustee or Administrator. Gray shall at all times while the loan remains outstanding, provide current evidence of payment of taxes and maintenance of fire and other peril insurance sufficient in amount to adequately protect City's 2 Gray — Home Loan Agreement security interest in the subject real property. Page 3 10. The Note and loan described herein is expressly non -transferable and non -assumable. In addition to the requirements of the Deed of Trust securing the Note, it is further agreed that the principal, plus all accrued interest thereon, shall be due and payable in full six (6) months following the first to occur of any of the following: A. The termination of Gray's employment with City, for any reason whatsoever. B. The death of Gray. C. Determination by or failure by Gray to occupy the subject real property as his principal place of residence. D. The physical or mental incapacity of Gray, such as to render him unable to perform his work for City for a period of twelve (12) consecutive months. 11. In connection with the provisions of Paragraphl0 (B) hereinabove, Gray agrees, during the entire term of this Note, that he shall maintain in full force and effect a policy of term life insurance in an amount sufficient to pay off the outstanding balance, principal and interest of the loan upon his death; in connection herewith, Gray agrees to provide City with a copy of such policy or a statement from his insurer evidencing the existence of said policy in full force and effect. Failure to maintain said policy of insurance in full force and effect throughout the entire term of this note shall be considered an event of default under the Note entitling City to accelerate payment of all sums then remaining owed on such Note. City agrees to reimburse Gray for all premium payments due under said policy of insurance 12. With regard to paragraph 10 (C) hereinabove, it is further expressly understood and agreed by Gray that Gray himself must personally utilize the subject real property as his principal place of residence at all times during the term of this Agreement and the Note to City's benefit referred to herein, in order for this Agreement to remain in full force and effect. Failure by Gray to so utilize the subject real property shall be considered an event of default under the Note entitling City to accelerate payment of all sums then remaining owed on said Note. 13. Any dispute between the parties concerning the terms or provisions of this Agreement shall be determined by binding arbitration conducted by a single arbitrator agreed upon by the parties; or, failing agreement on selection of an arbitrator, by an arbitrator appointed by the presiding judge of the Marin County Superior Court or his/her designee. The arbitrator appointed shall be empowered to award the prevailing party their reasonable attorney's fees and costs. Gray - Home Loan Agreement CITY OF SAN RAFAEL Dated: // / �� -7 Dated: 1 i Dated: . % zm7 Page 4 ALB RT J. B ,Mayor KenNioTdhoff, City Manager J�-'al-s4PHEkire Chief GRAY do hereby consent and agree to the terms and provisions of this Agreement. Ir Dated: _ zc0? ". (Spon. ) ATTEST: APPROVED AS TO FORM: 1 �VHANNE�M. LEONCINI City Clerk r, �ARY RAGGHIANTI City Attorney October 2, 2007 OLD REPUBLIC TITLE COMPANY 545 Fourth Street • San Rafael CA • 94901 • (415) 454-8300 • FAX (415) 453-3563 City of San Rafael 1400 Fifth Ave. P.O. Box 151560 San Rafael, CA 94915-1560 Re: Your Loan No.: Borrower: Christopher R. Gray and Cynthia Gray Escrow No.: 0435008163 -MC Property: 32 Junipero Serra, San Rafael, CA 94901 The escrow covering the new financing on the above referenced property has been closed. The document securing your loan was recorded on 10/2/2007. In connection with the completion of this escrow, we are enclosing the following: 1. Certified Copy of HUD -1 Settlement Statement 2. Original Note We appreciated the opportunity to work with you in this transaction and hope that it was handled to your satisfaction. We look forward to working with you again in the near future. If you have any questions, please feel free to contact me. Sincerely, Maryanne ooper Escrow Officer enclosures: as noted above T (7 MC/sw A. Settlement Statement B. TYPE OF LOAN 1. ❑FHA 2. ❑FmHA U.S. partment of Housing and Urban Development OMB No. 2502-0265 OLD REPUBLIC TITLE COMPANY 3. ®Conv. Unins. 6. File Number 7. Loan Number B. Mortgage Insurance 0435008163 -MC I 1 Case Number 4. ❑ VA 5. ❑ Conv. Ins. C. NOTE: This form is furnished to give you a statement of actual settlement costs. Amounts paid to and by the settlement agent are shown. Items marked "(p.o.c.)" were paid outside the closing; they are shown here for informational purposes and are not included in the totals. D. Name and Address of Borrower E. Name and Address of Seller F. Name and Address of Lender Christopher R. Gray and Cynthia Gray (See Attachment to Hud Statement) City of San Rafael 32 Junipero Serra 1400 Fifth Ave. P.O. Box 151560 San Rafael, CA 94901 San Rafael, CA 94915-1560 G. Property Location *p' H. Settlement Agent 32 Junipero Serra , . - Old Republic Title Company San Rafael CA 94901eP!t;9.:^ y Place of Settlement ! I. Settlement Date 545 Fourth Street 10/2/2007 3. SUMMARY OF BORROWER'S TRANSACTION 100. GROSS AMOUNT DUE FROM BORROWER 101. Contract sales price 102. Personal property 103. Settlement charges to borrower (line1400) 104. Appraisal Fee to Marsh & Associates 105. Adjustments for items paid by seller in advance 106. City/town taxes to 107. County taxes to 108. Assessments to 109. HOA Proration 10/02/07 to 01/01/08, 89 days @ $0.27; 110. 111. 112. 113. 114. 120. GROSS AMOUNT DUE FROM BORROWER 200. AMOUNTS PAID BY OR IN BEHALF OF BORROWER 201. Deposit or earnest money (see attached) 202. Principal amount of new loan 1st 203. Credit Buyer from Hull Homes 204. Credit Buyer from Bradley R/E for City Inspection Adjustments for items unpaid by seller 210. City/town taxes to 211. County taxes 07/01/07 to 10/02/07 212. Assessments to 213. Credit Buyer from Seller for City Inspection work 214. 215. 216. 217. 218. 219. 220. TOTAL PAID BY/FOR BORROWER 300. CASH AT SETTLEMENT FROM/TO BORROWER 301. Gross amount due from borrower (lm 120) 302. Less amounts paid by/for borrower (une220) 303. CASH ❑ FROM ® TO BORROWER 1.200,000.00 5,310.00 400.00 24.72 1.205,734.72 573,816.71 600,000.00 30.000.00 873.00 San Rafael, CA 94901 K. SUMMARY OF SELLER'S TRANSACTION 400. GROSS AMOUNT DUE TO SELLER 401. Contract sales price 402. Personal property 403. 404. 405. Adjustments for items paid by seller in advance 406. City/town taxes to 407. County taxes to 408. Assessments to 409. 410. 411. 412. 413. 414. 420. GROSS AMOUNT DUE TO SELLER 500. REDUCTIONS IN AMOUNT DUE TO SELLER 501. Excess deposit (see instructions) 502. Settlement charges to seller (line 1400) 503. Existing loan(s) taken subject to 504. 505. 506. 507. 508. 509. Adjustments for items unpaid by seller 510. City/town taxes to 31340.39 511. County taxes to 512. Assessments to 2,872.40 513. 514. 515. 516. 517. 518, 519. 1,210,902.50 520. TOTAL REDUCTION AMOUNT DUE SELLER 600. CASH AT SETTLEMENT TO/FROM SELLER 1,205,734.72 601. Gross amount due to seller (line 420) (1,210,902.50) 602. Less reductions in amount due seller (line 520) Section 5 of the Real Estate Settlement Procedures Act (RESPA) requires the following: • HUD must develop a Special Information Booklet to help persons borrowing money to Finance the purchase of residential real estate to better understand the nature and costs of real estate settlement services; • Each lender must provide the booklet to all applicants from whom It receives or for whom it prepares a written application to borrow money to finance the purchase of residential real estate; • Lenders must prepare and distribute with the Booklet a Good Faith Estimate of the settlement costs that the borrower is likely to incur in connection with the settlement. These disclosures are manadatory. MC/sw 5,167.78 603. CASH ❑ TO ❑ FROM SELLER Section 4(a) of RESPA mandates that HUD develop and prescribe this standard form to be used at the time of loan settlement to provide full disclosure of all charges Imposed upon the borrower and seller. These are third party disclosures that are designed to provide the borrower with pertinent Information during the settlement process In order to be a better shopper. The Public Reporting Burden for this collection of Information is estimated to average one hour per response, Including the time for reviewing Instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. This agency may not collect this Information, and you are not required to complete this form, unless It displays a currently valid OMB control number. The Information requested does not lend Itself to confidentiality HUD -1 (3-86) RESPA, HB 4305.2 Attachment to HUD Statement ===== Continuation from Pagel ===== BUYER ADJUSTMENTS AMOUNTS PAID BY OR IN BEHALF OF BORROWER DEPOSIT OR EARNEST MONEY -- LINE 201 Christopher Gray and Cynthia Gray 10,000.00 Christopher R. Gray and Cynthia Gray 25,000.00 Christopher R. Gray and Cynthia Gray 536,816.71 Christopher R. Gray and Cynthia Gray 2,000.00 PRINCIPAL AMOUNT OF NEW LOAN(S) -- LINE 202 City of San Rafael 1400 Fifth Ave. P.O. Box 151560 San Rafael, CA 94915-1560 Loan No.: Position: 1 Principal amount 600,000.00 Escrow No Loan No.: NAME OF SELLER 0435008163 -MC Siamak Motahari, Trustee of The 2001 Siamak Motahari Revocable Trust, under instrument dated April 24, 2001 SELLER ADJUSTMENTS Escrow No.: 0435008163 -MC L. SETTLEMENT CHARGES 700. Total sales/broker's commission based on price $ Division of commission (line 700) as follows: 701. 702. 703. Commission disbursed at settlement 704. 800. ITEMS PAYABLE IN CONNECTION WITH LOAN 801. Loan Origination Fee 802. Loan Discount 803. Appraisal Fee 804. Credit Report 805. Lender's Inspection Fee 806. Mortgage Insurance Application Fee 807. Assumption Fee 900. ITEMS REQUIRED BY LENDER TO BE PAID IN ADVANCE 903. Hazard Insurance premium for 12 mos. to State Farm Insurance 1000. RESERVES DEPOSITED WITH LENDER 1100. TITLE CHARGES 1101. Settlement or closing fee to Old Republic Title Company 1106. Notary Fees to Maryanne Cooper 1108. Title insurance to Old Republic Title Company (includes above items numbers:) 1102, 1103, 1108, Endorsements and Additional Title Fees, if any 1109. Lender's Coverage Liability Amount $600,000.00 Premium $0.00 1110.Owner's Coverage Liability Amount $1,200,000.00 Premium $2,376.00 1200. GOVERNMENT RECORDING AND TRANSFER CHARGES 1201. Recording fees: Deed $ 20.00 Mortgage $ 21.00 1202. City/county tax/stamps: Deed $ 3,720.00 Mortgage $ 1203. State tax/stamps: Deed $ Mortgage $ 1204. 1205. Certification of Trustee 1300. ADDITIONAL SETTLEMENT CHARGES 1301. 1302. 1303. First American Home Buyers Protection - Home Warranty 1304. Doc Prep Deed to Old Republic Title Company 1305. Overnight Service Fee to Old Republic Title Company 1306. 1307. 1308. 1309. 1310. Releases $ Paid From f Borrower's Funds At Settlement 1,088.00 1 1,220.00 20.00 2,376.00 41.00 480.00 50.00 35.00 Paid From Seller's Funds At Settlement 1400. TOTAL SETTLEMENT CHARGES (enter on lines 103, Section 3 and 502, Section K) 1 5,310.00 1 0.00 To the best of my knowledge, the HUD -1 Settlement Statement which I have prepared is a true and accurate account of the funds which were received and have been or will be disbursed by the undersigned as part of the settlement of the transaction. Escrow Officer Date MC/sw DO NOT DESTROY THIS ORIGINAL NOTE: WHEN PAID, THIS ORIGINAL NOTE, TOGETHER WITH THE DEED OF TRUST SECURING SAME, MUST BE SURRENDERED TO TRUSTEE FOR CANCELLATION AND RETENTION BEFORE RECONVEYANCE WILL BE MADE, NOTE SECURED BY DEED OF TRUST, $600,000.00 San Rafael, California September 14 , 2007 On or before THIRTY (30) YEARS after date, for value received, CHRISTOPHER R. GRAY, and Cynthia Gray, his wife, promise to pay to the CITY OF SAN RAFAEL, a Municipal Corporation, or order, at San Rafael, California, the sum of Six Hundred Thousand ($600,000.00) Dollars with interest on the unpaid principal amount at a rate hereinafter more fully set forth; principal and interest payable monthly on the third (3rd) day of each and every month commencing November 3, 2007 and continuing monthly thereafter for a period not to exceed thirty (30) years, through October 3, 2037. The interest rate to be paid on this Note shall be variable but always equal to the yield of the latest quarter -to -date LAIF rate earned by the City's investment portfolio, with the following exception: the loan rate herein shall remain fixed between each November 3`a and shall only be adjusted annually based on the then quarterly LAIF rate of return earned by the City's investment portfolio. The initial interest rate hereunder shall be 5.25 % per annum and shall remain in effect through October 3, 2008; on November 3, 2008 and on each November 3rd following, the interest rate charged to GRAY shall be adjusted based upon the then reported quarter -to -date LAIF rate of return on the City's investment portfolio. This rate shall continue thereafter for the succeeding twelve (12) months until the next adjustment date, and there shall be no adjustment in the interest rate charge to GRAY during said period. Principal and interest accrued thereon shall be payable in full six (6) months following the first to occur of any of the following: (a) termination of GRAY's employment with City for any reason whatsoever, (b) the death of GRAY, (c) determination by GRAY not to occupy the subject real property as his principal place of residence, or (d) the physical or mental incapacity of GRAY such as to render him unable to perform his work for City for a period of six (6) consecutive months. This Note is expressly non -transferable, non -assignable, and non -assumable. GRAY agrees that during the entire term of this Note, he shall maintain in full force and effect a policy of term life insurance in an amount sufficient to pay off the then outstanding balance, principal and interest, of this loan upon death. In connection herewith, and throughout the term of this Note, GRAY agrees to provide City with a copy of such policy of insurance or a statement from his insurer evidencing the existence of said policy of insurance and that it remains in full force and effect, together with an assignment of policy proceeds, in a form acceptable to City, sufficient to, at all times, pay off the then remaining outstanding balance plus accrued interest, of said Loan. Failure to maintain said policy of life insurance in full force and effect during the entire term of the Note shall be considered an event of default under the terms of this Note entitling City to accelerate payment of any and all sums remaining due and owing hereunder. Should default be made in payment of principal or interest under this Note when due, the whole sum of principal and interest then owing under this Note shall immediately become due at the option of the holder of this Note. Principal and interest shall be payable in lawful money of the United States only. If action be instituted on this Note, the undersigned promises to pay such sums as the court may fix as reasonable attorney's fees to City. This Note is secured by Deed of Trust of even date to Old Republic Title Company as Trustee. CHEC OPWR. A ' J, CYNTHIA GRAY 2