HomeMy WebLinkAboutCM Employment Agr.; Chris Gray; Fire Chief; AmendmentCITY OF �%�� •
Agenda Item No: 7
Meeting Date: September 17, 2007
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: CITY MANAGER I j
Prepared by: Ken Nordhoff, City Manager Approval:,)6
City Manager
SUBJECT: ADOPT A RESOLUTION RESCINDING RESOLUTION NO. 11197
REGARDING HOUSING ASSISTANCE FOR DEPARTMENT DIRECTORS; ADOPT
RESOLUTIONS AUTHORIZING THE MAYOR AND CITY MANAGER TO:
a) EXECUTE AMENDMENT TO EMPLOYMENT AGREEMENT WITH FIRE CHIEF
CHRISTOPHER GRAY, AND
b) EXECUTE A HOME LOAN AGREEMENT WITH FIRE CHIEF CHRISTOPHER GRAY
RECOMMENDATION: Adopt Resolutions as presented
BACKGROUND:
Over the last decade, the City has provided housing loan assistance to Department Director
candidates who are moving from outside of Marin, and who plan to live in the community they
serve — San Rafael. Home loans were last granted by the City in the late nineties for the former
City Manager and a former Police Chief. The City has successfully recruited for Department
Director positions since that time, and has been able to successfully recruit highly skilled and
qualified candidates, without necessitating a home loan.
With the departure of Fire Chief Martin in 2005, the City was fortunate to find a retired Fire
Chief to serve the San Rafael community for an interim period. John Montenero has been
leading our Fire Department for the past two years. This past spring, William Avery and
Associates conducted an executive search across the State and outside of California. An
extensive and inclusive internal process resulted in the selection of Christopher Gray to serve
as San Rafael's new Fire Chief.
At your August 6th meeting, you presented Chris to the community and approved an
employment agreement. That agreement included provisions for home loan assistance. This
staff report is seeking your approval to rescind a resolution regarding housing assistance for
department directors that is no longer relevant or helpful in recruitment of high ranking
managers in the present home purchase market in San Rafael and therefore has been
determined to be inadequate. In addition, separate resolutions are provided that modify Mr.
Gray's employment agreement and establish a home loan that reflects the level of housing loan
assistance that the City Attorney and I have negotiated, under your direction, with Mr. Gray.
?-3-31 FOR CITY CLERK ONLY
F27-lfi iT
Council Meeting:Z/7/0
Disposition:
1) ADOPTEDRESOLUTION NO. 12349 - RESOLUTION RESCINDING RESOLUTION NO.
11197 WHICH ESTABLISHED HOUSING ASSISTANCE FOR DEPARTMENT DIRECTORS
2) ADOPTED RESOLUTION NO. 12354 -RESOLUTION APPROVING AND AUTHORIZING
THE MAYOR AND THE CITY MANAGER TO EXECUTE AN AMENDMENT TO A FIRE
CHIEF EMPLOYMENT AGREEMENT BETWEEN THE CITY OF SAN RAFAEL AND
CHRISTOPHER GRAY
3) ADOPTED RESOLUTION NO. 12351 - RESOLUTION APPROVING AND AUTHORIZING
7HE MAYOR AND THE CITY MANAGER TO EXECUTE A HOME LOAN AGREEMENT
BETWEEN THE CITY OF SAN RAFAEL AND CHRISTOPHER R. GRAY, FIRE CHIEF
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2
ANALYSIS:
Resolution No. 11197 was put into place to set both policy and parameters around the level of
housing loan assistance that might be provided to Department Director candidates.
Unfortunately, the terms and conditions contained in this 2002 Resolution are both impractical
and obsolete. The price of housing in San Rafael has increased substantially over the past five
years. Interest rates have risen. The nationally home mortgage crisis has hampered the
housing resale market, and much higher scrutiny is being placed on borrowers by lenders.
The City has worked hard to bring a top notch Fire Chief to San Rafael. It has been clear since
Mr. Gray was our preferred candidate that he would relocate to our community and he and his
family expressed a strong desire to live in San Rafael. With your direction, I have worked
alongside the City Attorney to establish a home loan that meets Mr. Gray's needs, but also
protects the City's investment and interests in this transaction.
The Home Loan attached includes all of the protections that we have used in similar home
loans. The Gray's are currently in escrow to sell their home in Glendale. They are also in
escrow to acquire a home in the Villa Real neighborhood in San Rafael.
I have attached three (3) resolutions that will consummate the City's negotiations with Mr. Gray
regarding a home loan. By separate action, I ask that you rescind the 2002 resolution, modify
Mr. Gray's employment agreement to reflect the amount of the loan ($600,000), and approve
his home loan agreement. The loan will be protected by life insurance and includes monthly
repayment of principal and interest. In addition, the loan will be in first position on the property,
and will be limited to 50% of the appraised value of the new San Rafael home currently in
escrow.
FISCAL IMPACT:
The City will draw down up to $600,000 of general Fund reserves. The interest rate paid to us
will be consistent with our investment rate in LAIF — which now stands at 5.25%.The rate will
thereafter be adjusted annually to reflect any changes in the LAIF rate No impact will occur to
our operations as a result of approving the Resolutions and making the home loan.
ACTION REQUIRED:
Adopt Resolutions.
OPTIONS:
1. Allow the 2002 Resolution No. 11197 to stand, which is not recommended and would
require a substantial renegotiation of the home loan agreement presented.
2. Rescind and Modify Resolution No. 11197 as set forth in the attached resolution, to
permit necessary flexibility in recruitment, while continuing to require City Council
approval for Home Loan and/or other components of compensation negotiated.
3. Modify or deny the home loan to Mr. Gray,
ATTACHMENTS
WACity Managers- WorkFile\Council Material\Staff Reports\07\fire chief home loan rpt.doc
RESOLUTION NO. 12349
RESOLUTION OF THE CITY OF SAN RAFAEL
RESCINDING RESOLUTION NO. 11197 WHICH ESTABLISHED HOUSING
ASSISTANCE FOR DEPARTMENT DIRECTORS
WHEREAS, median prices of Bay Area homes have continued to escalate
substantially over the last five years; and
WHEREAS, it has become increasingly common, and necessary, for local
governments to offer housing assistance for key managers; and
WHEREAS, San Rafael's Department Directors' compensation is competitive,
still housing prices continue to present formidable hurdles in connection with recruiting
for these positions and often prove prohibitive to top candidates from out of the area;
and
WHEREAS, the City has provided housing assistance in the past to the City
Managers and the Police Chiefs; and
WHEREAS, in 2002, the City Council adopted Resolution No. 11197, which
identified several department director positions who could potentially be eligible for
housing assistance; and
WHEREAS, Resolution No. 11197 also described a series of specific terms
relating to provision of housing assistance, some of which are no longer relevant in
today's current department director recruitment market and in the face of practical
realities encountered in the purchase of a residence in Marin County for certain
Department Directors the City may need to recruit; and
WHEREAS, Resolution No. 11197 was established at the time the City was
recruiting for a specific Department Director position, and the established criteria put
into place never materialized into a housing assistance loan for this individual, and
WHEREAS, the City recognizes that a number of Department Directors will be of
retirement age in the next several years, and it is important to be able to recruit the best
possible candidates to fill these positions; and
WHEREAS, the City Council wishes to have flexibility in meeting the housing
assistance needs of individual Department Director candidates, based upon a variety of
factors in place at the time when individual position recruitments are actually taking
place.
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of San
Rafael rescinds Resolution No. 11197, which was adopted on November 4, 2002
intending specifically thereby to free the City Manger to negotiate with qualified
candidates on an ad hoc basis and to make recommendations to the City Council in
connection with specific housing assistance components of a recruitment package, as
circumstances reasonably dictate, all subject to the full advice and consent of the City
Council
/, 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 City Council of said City held on Monday, 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
"
Je4A-n7WM.LeoncinJ,' City Clerk
WACity Managers- WorkFile\Council Material\Resolutions\2007\CSR reso rescinding Dept Director Housing.doc
RESOLUTION NO. 12350
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF SAN RAFAEL APPROVING AND AUTHORIZING
THE MAYOR AND THE CITY MANAGER TO EXECUTE
AN AMENDMENT TO A FIRE CHIEF EMPLOYMENT
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 to allow the CITY to provide a greater amount in housing
assistance to GRAY than originally contemplated; and
WHEREAS, both parties desire that the remainder of the Fire Chief Employment
Agreement remain unchanged;
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 an Amendment
to the Fire Chief Employment Agreement dated August 6, 2007, 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
JE E M. LEONCINT, City Clerk
W:\City Managers- WorkFile\Council Materia1\Reso1utions\2007\CSR Fire Chief -RASO re amend to agent 9-10-07.doc
AMENDMENT
TO FIRE CHIEF EMPLOYMENT AGREEMENT
BETWEEN THE CITY OF SAN RAFAEL
AND CHRISTOPHER R. GRAY
This Amendment to Agreement is made and entered into this 17th day of September, 2007
by and between the CITY OF SAN RAFAEL (hereinafter "CITY"), and CHRISTOPHER R.
GRAY (hereinafter "GRAY" or "FIRE CHIEF").
RECITALS
WHEREAS, the CITY and GRAY entered into an 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 larger housing assistance loan to
GRAY than originally negotiated; and
WHEREAS, both parties desire that the remainder of the Fire Chief Employment
Agreement remain unchanged;
AGREEMENT
NOW, THEREFORE, the parties hereby agree as follows:
1. The first sentence of Paragraph 7 Q of the Agreement is amended to read as follows:
"Housing Assistance Loan --The City is willing to provide the Fire Chief with a housing
assistance loan, up to the total amount of $600,000.00."
The remaining language of this section shall remain unchanged.
2. All other covenants, terms and conditions of the original Agreement shall remain
unchanged and in full force and effect.
1
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day, month
and year first above written.
CITY OF SAN RAFAEL
Al Boro, Mayor
AL
Ken i4brdhoff, City Manager r
ANNE M. LEONCINI, City Clerk
R . 114 LVA
n
Gary Ragghtanti, City Attorney
W:\City Managers- WorkFileTersonneffire Chief Recruitment\CSR Fire Chief-Amdmt to Empl Agmt 4-10-07.doc
2
Im
RESOLUTION NO. 12351
Is
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:
NOES:
Councilmembers:
ABSENT:
Councilmembers:
Cohen, Heller, Miller, Phillips and Mayor Boro
None
None
JEAW-nEONCINi, City Clerk
W:\City Managers- WorkFile\Council Material\Resolutions\2007\CSR Fire Chief-RESO home loan.doc
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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 Junipero 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
Gray — Home Loan Agreement Page 3
security interest in the subject real property.
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.
3
M
Im
Gray - Home Loan Agreement Page 4
CITY OF SAN RAFAEL
Dated:
c'!I
Dated:
Datcd:c. Z007
A
Dated:
, zPa
ATTEST:
ANNEM. �LEON�CINI��
City Clerk
ALBRTJ. BOZ6, Mayor
Jden'N- Tdhoff, City Manager -
IST PHEk R\-dkAY ire Chief
GRAY do hereby
consent and agree to the terms and
provisions of this Agreement.
Nwbju�96WHLVAP
OARYV, PA'GGfil,&&TI
City Attorney
Agenda Item No:
Meeting Date: November 4, 2002
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: City Manager
Prepared by: Rod Gould, City Manager City Manager Approval: 0
SUBJECT: HOUSING ASSISTANCE FOR DEPARTMENT DIRECTORS
RECOMMENDATION: Staff recommends that the Council approve guidelines for housing
assistance for department directors.
BACKGROUND: As the median prices of Bay Area homes have escalated in the last decade, it
has become increasingly common for local governments to offer housing assistance for key
managers. Recent newspaper articles indicate that the median price of a home in San Rafael is
greater than $625,000. Although department directors' salaries are competitive in the market,
such housing prices can prove prohibitive for top candidates from out of the area.
In 1996, the City Council offered housing assistance to the City Manager moving from Southern
California to San Rafael. A year later, similar assistance was provided the newly hired Police
Chief moving from Central California. Recently, Public Works Director Dave Bernardi
announced his plan to retire next spring and assume a new position with the Marin Builders
Exchange. This will necessitate an external and internal recruitment. Several other department
directors will be reaching retirement age in the next several years. It is prudent to seek Council
approval of guidelines for limited housing assistance for department directors in order to be able
to recruit the best candidates for such key positions.
ANALYSIS: Staff recommends the City offer loans as second mortgages for the purchase of
owner -occupied residences within the City of San Rafael. Such loans would be available to the
positions of Assistant City Manager, Police Chief, Fire Chief, Community Development Director,
and Public Works Director. Each of these positions serves as Section Chief in the Emergency
Operating Center (EOC) in time of emergency. It is a public benefit that these directors live
within the City of San Rafael in time of emergency. The City may consider offering to pay for a
portion of closing costs for other department director positions.
FOR CITY CLERK ONLY
r
File No.: % -! 13 -.
Council Meeting: !�
s
Disposition: ADOPTED RESOLUTION NO 11197 -RESOLUTION ESTABLISHING HOUSING ASSISTANCE
FOR DEPARTMENT DIRECTORS (as amended at the request of City Attorney Gary
Ragghlanti): Staff Report - Page 2:
(Mayor Boro and Counclimember Phillips b.. -- -U
The loan would be repayable, In interest only, in monthly installments to C& or its
designee.
A preliminary title report acceptable to the City Attorney must be provided, as well a
evidence of insurance covering llabllity, fire and other perils, at the close of escrow,
The loan would become due and payable:
- within 90 days ofseparation from City service regardless of cause
u within 90 days of demand by the City, regardless or cause
• within 90 days of relocation of principle family residence
immediately upon divorce or marriage
Immediately in case of alienation of title to the property securing the loan
upon the occurrence of any other event or circumstance negotiated between
the applicant and the City
SAN RAFAEL CITY C04ACIL AGENDA REPORT / Page: 2
The terms of the loan would be as follows:
• Loan amount would not exceed 20% of the gross sales price of the home.
• A variable interest rate would be set at 1 % above the current rate of return in the Local
Agency Investment Fund (LAIF), and would be adjusted annually.
• The loan would be repayable, in interest only, in monthly installments to a mortgage
company of choice by the City.
• The borrower would name the City of San Rafael as beneficiary on term life insurance
equal to the amount of the loan.
• A preliminary title report acceptable to the City must be provided, as well as evidence of
insurance covering liability, fire, and other perils at the close of escrow.
• The loan becomes due and payable within 90 days of separation from City service,
regardless of cause; or, immediately in case of alienation of title of property used to
secure the loan; or, within 90 days of demand by the City, regardless of cause for
demand; or, if the department director relocates his/her principle family residence.
• The term of the loan would be five years, balance to be paid in full.
• Borrower may, at any time, pay all or a portion of the principal amount of the loan without
pre -payment penalty.
• The loan would be non -transferable and non -assumable.
Such loans would be negotiated and administered by the City Manager with eligible directors.
Mayor Boro has reviewed these guidelines and finds them satisfactory.
FISCAL IMPACT: Such medium-term loans at 1 % over the City's typical investment interest
rate would be of little financial consequence to the City. Although a portion of the fund balance
would not be as liquid, the 90 -day call provision for any reason provides the City access to its
investment in the event of fiscal crisis. The ability to attract and retain top quality department
directors is crucial to the fiscal and operational performance of the City d' San Rafael.
OPTIONS:
• Approve the housing assistance guidelines for department directors, as described.
• Modify and approve the guidelines for department director housing assistance.
• Reject the proposed housing assistance guidelines and direct staff to propose new
guidelines.
• Send the matter back for further study.
ACTION REQUIRED: If Council concurs with staff's recommendation, the appropriate action
would be a motion to approve a resolution authorizing the City Manager to negotiate and
administer certain limited housing assistance for eligible department director positions.
Im
RESOLUTION No. 11197
Im
RESOLUTION OF THE CITY OF SAN RAFAEL
ESTABLISHING HOUSING ASSISTANCE
FOR DEPARTMENT DIRECTORS
WHEREAS, median prices of Bay Area homes have escalated in the last
decade; and
WHEREAS, it has become increasingly common for local governments to offer
housing assistance for key managers; and
WHEREAS, San Rafael's department directors' salaries are competitive, yet
housing prices can prove prohibitive to top candidates from out of the area; and
WHEREAS, the City has provided housing assistance in the past to the City
Manager and the Police Chief; and
WHEREAS, a number of department directors will be of retirement age in the
next several years, and it is important to be able to recruit the best possible candidates
to fill these positions; and
WHEREAS, the Assistant City Manager, Police Chief, Fire Chief, Community
Development Director, and Public Works Director serve as section chiefs in the
Emergency Operations Center (EOC) in time of emergency; and
WHEREAS, it is a public benefit that these directors live within the City of San
Rafael in time of emergency.
NOW, THEREFORE, BE IT RESOLVED the City Council of the City of San
Rafael authorizes the City Manager to negotiate and administer limited housing
assistance for key department directors, including Assistant City Manager, Police Chief,
Fire Chief Community Development Director, and Public Works Director. Housing
Assistance shall be provided in the form of loans as second mortgages for the purchase
of owner -occupied homes in the City of San Rafael, with terms set forth as follows:
■
■
The terms of the loan would include, but not be limited to the following:
• Loan amount would not exceed 20% of the gross sales price of the home.
• A variable interest rate would be set at I% above the current rate of return
in the Local Agency Investment Fund (LAIF), and would be adjusted
annually.
• The loan would be repayable, in interest only, in monthly installments to
City or its designee.
• The borrower would name the City of San Rafael as beneficiary on term
life insurance equal to the amount of the loan.
• A preliminary title report acceptable to the City Attorney must be provided,
as well as evidence of insurance covering liability, fire, and other perils, at
the close of escrow.
• The loan would become due and payable;
-within 90 days of separation from City service regardless of cause
-within 90 days of demand by the City, regardless of cause
-within 90 days of relocation of principalfamily residence
-immediately upon divorce or marriage
-immediately in case of alienation of title to the property securing
the loan
-upon the occurrence of any other event or circumstance
negotiated between the applicant and the City of San Rafael
• The term of the loan would be for five (5) years, balance to be paid in full.
• Borrower may, at any time, pay all or a portion of the principal amount of
the loan without pre payment penalty.
• The loan would be non -transferable and non -assumable.
1, 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 City Council of said City held on Monday, the fourth day of November,
2002 by the following vote, to wit:
AYES: COUNCILMEMBERS: Heller, Miller and Vice -Mayor Cohen
NOES: COUNCILMEMBERS: None
ABSENT. • COUNCILMEMBERS: Phillips and Mayor Boro
f
Jea ne . Leoncini, City Clerk
The terms of the loan would include, but not be limited to the following:
• Loan amount would not exceed 20% of the gross sales price of the home.
• A variable interest rate would be set at 1 % above the current rate of return in the Local
Agency Investment Fund (LAIF), and would be adjusted annually.
• The loan would be repayable, in interest only, in monthly installments to City or its
designee.
• The borrower would name the City of San Rafael as beneficiary on term life insurance
equal to the amount of the loan.
• A preliminary title report acceptable to the City Attorney must be provided, as well as
evidence of insurance covering liability, fire and other perils, at the close of escrow.
• The loan would become due an payable;
-within 90 days of separation of from City service regardless of cause
-within 90 days of demand by the City, regardless of cause
-within 90 days of relocation of principle family residence
-immediately upon divorce or marriage
-immediately in case of alienation of title to the property securing the loan
-upon the occurrence any other event or circumstance negotiated between
the applicant and the City
• The term of the loan would be for five (5) years, balance to be paid in full.
• Borrower may, at any time, pay all or a portion of the principal amount of the loan
without pre -payment penalty.
• The loan would be non -transferable and non -assumable.
RE: PAGE 2 of Staff Report RE: SRCC AGENDA ITEM NO. 6 -
NOTE: Above wording, recommended by City Attorney Gary T. Ragghianti,
was approved by the City Council at regular meeting of 11/18/02.
(Councilmember Phillips and Mayor Boro absent)
