HomeMy WebLinkAboutRESO 5820•
RESOLUTION NO. 5820
RESOLUTION OF TIIE COUNCIL OF THE CITY OF PALO ALTO
AMENDING TH! PALO ALTO COMPREHENSIVE PLAN FOR THE
DEVELOPMENT OF THE CITY OF PALO ALTO
OR •. ---·~NAL , 11~MI '
WHF.REAS, the Planning Commission has conducted a re.view and on
June 25, 1980, held a properly noticed public hearing to consider
amendment to the Palo Alto Comprehensive Plan.
NOW, TIIEREFORE, the Council of the City of Palo Alto does RE-
SOLVE as follows:
SECTION l. The Council finds that changed conditions and the
public interest, health, safety, and welfare require those certain
amendments to the Palo Alto Comprehensive Plan set forth in Section 2
hereof.
SECTION" 2. The Council hereby amends the Palo Alto Comprehen-
sive Plan as fo-llows:
(a) Land Use Map
Vacant site, 1050 Arastraderu Road (APN-142-16-060) from
Research/Office Park to Multiple Family Residential as
shown on Exhibit "A" .attached hereto and inc.orpo-rated
herein.
SECTION 3. The Council hereby finds thac tha adoption of this
Resolution will not cause any significant environmental impact.
INTRODUCED AND PASSED: July 21, 1980
AYES: Eyerly, Fazzino, Fletcher, Henderson, Levy, Renzel
NOES: None
NOT PARTICIPATING: Sher, Witherspoon
ABSENT: Brenner
ATTEST: APPROVED:
~~fJ-f=__;._~r=.____
Director, Planning and
Community Environment
AIWAIN~ CPllN ~ ••• CONTaOU.
··1 \ / Dlt'laU»MllNT
AREA r:J= PROPOScO CDMPREHENSIVE Pl.>N LANO
USE DES\()NATION Ct-t~CrE FROM RE.SEAACH/OPFlt:E
R'AK 10 MU'-TIPLE ~ILY RESIDENTIAL
E:XHIBIT .A ..
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CAllf"OltJilA 14 Cit!' of )'alo )llto
943 0 I
Office of the City Council May 20, 1980
TO: Colleagues
FROM: Councilmember Eyerly
SUBJECT: Single Family Residential Mortgage Revenue Bonds
Housing Revenue Bonds have been of interest to me for some time, but I
have not previously agendized the topic because of the collapse of the
municipal bond market earlier this year and the uncertainty of limiting
federal legislation.
For your infonnation I have enclosed a question and answers paper of the
Smith Barney, Harris Upham & Co. which our staff has provided me.
It is my belief that such revenue bonds could be a viable way to provide
lower cost mortgage money for purchase of single family residential homes
in Palo Alto for people of low and moderate incomes.
The bond market indicates enough strength at this time that I feel the )
Council sho~ld become knowledgeable. I will propose a staff report to
indicate feasibi1fty ..Ai1\! to provide general information and suggestions,
and to indicate the steps necessary to enter this bOnd market.
FRED
Attachment
SMITH BAR.NEY. HARRIS UPHAM & CO.
lNCOllPOIU\.TaD
...
QUESTIQNS AND ANSWERS
. ~ ~ .
350 CAllFORNIA Sillf.ET
SAN FRANCISCO, CAL.IF. 94104
l•H) 9SS·l500
Some of the most conmonly asked questions and answers concern-
ing sinqie-family residential mortgage revenue bonds follow:
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1. Who ·are the principal parties involved in a transaction
in which bonds for single-family residential, mortgages
are issued?
The principkl parties in a transaction are: (1) The City
vhich issues the bonds: (2) the financial organization
which originates and services mortga9es1 (3) the devel-
opers or homebuilders: and (4) the underwriter of the
borida.
2. I• The City liable on the bonds, legally or otherwise?
3.
1~e bonds are special revenue bonds and, as such, The City
ia not liable on the reveuu~ bonds except from the
specified source of revenues~ which in this case is the
mortgage loans and various reserve fundsD The City is
not liable for bond ·~ayments fr~ any other source of
funds. · . ; ..
I• the servicer li~ie···~r{··~~: bonds?
The aervicer is not liable on the bonds~ The servicer is
obligated to originate·.quality 1DOrt9a9es and to service
those mortgages pursuant to the mortgage-purchase and
servicing agreements • ._The servicer is not required to
... k• advances to prevent 4efault on the bonds.
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4. What i• the public purpose for the issuance of the bonds?
There are several public purposes served by the issuance
of the bonds. First and foremost is that by issuing the
bonda, The City ma~es'home mortgage loans available at
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an interest rate of approximately 2% less than the
conventional mortgage rate. This enables more people to
purchnse hanes at less cost, particularly persons in the
iower income brackets, primarily because of the signifi-
cantly lower monthly mortgage payments. Moreover, there
is a stimulntion effect on the local economy because of
the in~reased activities generated by the acquisition of
a signi-ficant number of home.s. ·. · . ·. ,~ ~
s. What are the permissible incomes of the persons who can
par~icipate in thi~ ~ype of program?
There are no incc.Jifte restrictions.
6. What is the aervicer•a compensation in this type of
financing?
The servicer normally receives compensation for carrying
out its two principal activities of originating and .
servicing the mortgage loans. Typically_ the amount of
compensation is essentially what the servicer would
realize if it were originating and servicing mortgage
loans for any type of secondary mart.gage market maker,
such as the Federal National Mortgage Association, the
GOvernment National Mortgage Association or state housin9
authorities. The financial institution will receive from
one to two percent of ·the loan amount for originating a
mortgage, and a service ·fee (including an administration
fee for the extra servicing duties) of 3/8 to 5/8 of 1%
of the annual average outstanding principal amount of
each mortgage loan .. · · : . ·
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7. What are the ini ticil costs·. to the homeowner-mortgagor?
Tho costs to the homeowner. are the same costs that he
would incur if he borrowed money at the conventional
interest rate under a·typical mortgage loan. He has to
pay tho same closing costs and approximately the same
points as charged. in ·the-~ conventional market, and on a
monthly hasis, he must pay the escrow amounts for property
taxes, hazard insurance, mortgage insurance and ·his
mortgage amortization.
e. What are the documents inv-olved in a typical family
1110rtga90 revenue bond financing?
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The principal docum·-·nts involved are: (l) The City's
charter~ (2) the mo.i:·tgage purchase and servicing agree-
ment..n between 'I'he City and the servicer. which sets forth
the requirements foM originating and servicing mortgage
loans; (3) a resolution of The City administered by a
trustee. which. among other things, sets forth the terms
and c·~mditions of the bonds., prescribes the flow of funds
and provides for the redemption provisions of the bonds;
and (4} an official statement which is used by the
underwriter to sell the bonds and describes the essential
facts relating.to the transactions.
What if there are defaults on the mortgages?
It is ~~pected that there will be som~ defaults on the
mortgage loans. The assmnption as to the number of
default~ is based on the historical experiences of the
servicer participating in the program. Normally, mortgage
loans are insured by either a private mortgage insurer,
the Federal Housing Administration or the Veteran's Admin-
istration. The net effect of this in~ .ranee is that even
though there are mortgage defaults, the losses resulting
from such defaults will be minimal.
10. What if delinquencies occur on mortgage loan payments?
It is anticipated that delinquencies will occur on the
mortgage loans, just as it is anticipated that defaults
will occur. Simlarly. the exp~rience of the servicer is
the )J.asis for the determination of the assumption with
respect to the amount of delinquencies. The transaction
is ~ypically structured so that even if a delinquency
rate would be experienced comparable to that experienced
in the depression of the l930's, there would be sufficient
cash flow to pay the debt s~rvice on the bonds. Theoreti-
cally. delinquencies on mortgage loan payments which
would result in an insufficient ilJl'IOunt of mortgage loan
payments to service t.he bonds would be cured by a wi thdra.wal
from the mortgage reserve fund.
11. What types of insurances are involved in the program?
All mortgdycs will be covered by standard and hazard
insurances, paid by the homeowner. special hazard insurance
(in an amount equal to 1% of the original principal amount
of all the mortgage loans made) paid from program revenues.
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12.
ilnd an errors and omissions insuranC'c, pa i.d by the financial
institution. The mortgage loan will also be insured by
the Fed~ral HOUf:ing Administration, the Veteran's Adminis-
tration or a private mort9a9e insurer.
What types of .reserve funds are generally provided for in
the f inancin9 documcnte?
At least three types of reserve funds arc generally provided
for in this typ~ of financing: (1) a mortgag~ reserve fund
(wh~ch is used to pay principal and interest on the bonds
and to make up at1y deficiencies in ca::oh flow from mortgage
payments) generally funded in an amount equal to a small
percentage of the mortgage loans made; (2) a debt service
reserve fund (which is used only to pay principal an~
interest on the bonds) generally in an amount equal to
approximately 150<~ of any future yearly amortization on
the bondn. whjch is funded from bond proceeds~ and (3) an
accumulation reserve fund (which is used to pay principal
and interest or~ the bonds and to make up any deficiencies
in cash flow from mort9a9e payments} generally in an amount
equal to approximately 3/4 of 1% of the original principal
amount of the bonds, which is funded from excess revenues
9eneratc<l by the program.
13. What if the servicer cannot originate all of the mortgage
loans?
Generally, the amount Of the bonds is restricted to the
amount of mortgage lo~ns the servicer can eAt'CCt to
originate within one to two years to protect against
significant market interest rate variations. If it is
not possible to make alf the.mortgage loans. there are
cerlain provisions that may be built into the financing
documents permitting the investment of the unused· moneys
in securities or other obligation~ yielding an amount
sufficicnl to pay debt service on the bonds (although
there in no assurance ·that such investments could neces-
sarily be 1nade). The. inability to originate all the
mort9a9e loans is-a risk~that ia borne by the bon~olders •
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JoN~s :HALL ll1LL & WHITE
ATTORNEYS AT LAW
KENNETH l. JONES
AKOREW C. HALl.,JR.
ROBERT J. HILL
SHARON STANTON WHI'TE
ROBERT O. AUWBREY
CHARL£S F. ADAMS
s·fEPRltN H. CASALEOOIO
Mr. John Hor an
Housing/Transportation Specialist
Department of Planning and
Conm .. mity Environment
City of Palo Alto
250 Hamilton Avenue
Palo Alto~ California 94301
Dear Mr. Horan:
May 6, 1980
:t2~0 UNION BANK BUJI.OlNO
~O CALIPOHN IA STRKl!:T
SAN FRANCISCO 941ll
(41~) 391-~780
R.Ec f I !ll': ,,, .:': '. ~ . ; .~
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IJJJ1is1011 n'f " .. ! :.)'{)
UJ 1u_.,. lfl'1 ·D·) .
r.1f Jr 1J1? /A//'~ r l/J,., • Pursuant to our recent telephone conversations I am returning the form
of resolution provided by E.F. Hutton regarding single family mortgage revenue
bond financing. Apparently their transmission of this resolution is based on
Washington scuttle butt that the transition date may be changed by the Senate
from April 24, 1979 to $Ome later date.
As I indicated to you on the telephone, Senator Long, Chairman of the
~...:.1ate Finance Ccmnittee, has indicated that he proposes to 11 s it on" the
Ullman Bill passed by the House, untn Congress or the administration does
somethihg about tiousing. In the meantime he has encouraged issuers to proceed
with the issuance tJf rrortgage revenue bonds assuring him that he wil 1 "protect
them°'. I Ml not quite sure what he means by th is nor how he proposes to 90
about his protection program but I ttlink it is an area in which conservatism
should be the order of the day.
In My event there can be no harm in the City1s adopting a resolution
indicating an intent to proceed, asst.Jning of course that such intent in fact
exists. Also assuming that the so-called transition rules as adopted by the
House will continue to be controlling, the resolution should meet the
Moffic1al action" requirenent of these rules. Basically the rule is that the
governing body of the \Jnit having authority to issue the bonds must have telken
"official action" with respect to the bonds, indicating an intent to issue the
hoods. The intent must be to zc.ually issue that particular bond issue prior
t~ which the issuing authority lllJSt have fornt.1lated a bond issue proposal.
The report indicates that off1 ci al action would include the adopt ion of
a resolution authorizing the hiring of bond tounse1, bond underwriters, market
analysts, or other perso~s to take steps (such as the preparation of
documents) necessary for the issuance of a particular tax exempt bond issue.
Thus the requirdllents could be satisfied by ttn~ h1r ing of the mentioned
cansultants not only underwriters.
Mr. John Horan
May 6, 1900
Page Two
The action nvst also neet the s1z1ng requirements of the interim
regulations. Generally, these requirements are that there must be
documentation from which the intended size of the issue can be determined, and
the issue cannot exceed the intended size. Presumably the simplest method of
meeting this requirement is for the official action resolution to set forth
the particular amount of bonds, t·ecognizing that this amount becomes a
limitation. Under the present rules the entire arount irust be issued as a
single issue because, according to the staff report, 11only one issue of bonds
can be issued for any one official actionu.
If the Council does intend to issue mortgage revenue bonds and if the
Councilwishes to identify unde!"writers at this time~ the Hutton resolutTon is
adequate. As mentioned above, the sa1r~ result could be obtained by employing
bond counsel, market analysts or other persons as well as underwriters.
i would be glad to provide any other" information or assistance that you
might need.
KIJ:pl
Encl.
Very truly yours,
P .S. I am enclos in~ a copy of the trans it ion rules under the Ullman Bi 11 as
they now exist. Please bear in mind tflat these are House version only and we
still have no fodication as to "'1at rMY/;;~the Senate.
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·memorandum • --
k~' .. •. · TO Board ~!_Sup.!.~-~~r_s ____ , _______ ... --=-~M _Hary_~av~y
:~ .• . s"ll8J£CTRESOLUTION or INTENT TO IMPLEMENT A
~ . ·. •· . ~ MORTGAGE BOND PROGRAM -----
OATE
-. --" r~ n w rn !ID Prepared by Mary Davey
Revlewed by Bob Hilton
Jl-\1~ ~ 4 i980 Submitted by Kary Davey ~
... · . , 1tl~T l~:· ;i:_rr·: ::-;r, for Bi 1l Siegel
Recommended Action (i F p A L U i. t T r·
The County Housing Advisor recommends that the Board of Supervisors adopt
the .i::attached:
~
Resolution of Intent to Implement a Mortgage Bond Pr~ra!l! for
purpose of assistfng persons (with.rn-"the' 80t°fo·12ot of County
income) to purchase or rehabilitate single family homes.
the
median
Fiscal Impact: There is no cost attached to the recommended action.
Reasons for Reconmendation
The Board of Supervisor~· stated position of widening opportunities fo~ home
ownership and home rehabiJltatlon among persons of moderate income (80% to
120t of County medfan income) Js recorded in a variety of places. (See H*HEMO.)
Wlth this program, S & L1 s and banks designated by the County will qualify
applicants for loans of +9%, well belo\-1 present market rate mortgage loans 0
thereby provtdtng hom!! purchase and rehabilitation opportunities for resjdents
otherwtse unable to qualify.
This program meets a documented need among County residents. According to
Jay Jar.is, Chair of the Federal Home Loan Bank Board, only 15t of potential
homebuyers can meet tocay•s monthly mortgage payments. This program will
offer them an opportunity for lower monthly payments and increase the mortgage
money silpply.
!ackground
..
California Assembly Bill 1355 was approved by the Governor on September 27, 1979.
It authorizes all cities and counties to conduct a program of housing finance
for the purpose of mortgage loans to finance home purchase and home rehabilitation.
It requires each city or county to establish certain criteria for the qualJfJcatlons
of persons or families eligible for such assistar.ce {80% to 120% of County median
Income). This blll is specifically designed to permit si~gle family revenue
bond financing used by cities and counties in other stales of the nation.
At present, there Is federal legislation (i-f.R. 3712, the "Ullman 8111") before
Congress to remove the tax exempt status of these bonds on all issues not
authorized before Apri I 24, i979. In effect, this federal legislation wl 11
kill the program In California and alJ over the country unless the tax exemption
provision Is kept.
Board of Supervisors
page 2
12/6/79
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The County has heard form E.F. Hutton that there Is a possibility tne Senate
may amend the cut-off date to December 3~ 1979. Should th~s turn out to
be the case, the County will be able to participate ln this important program
by passing the Resolution of Intent during 1979.
Consequences of Negative Action
The County :nay miss an opportunity to participate in a Home Hortgage Bond
Program by not acting before the end of 1979.
Steps Following Approval
cas
RespQnsible
Clerk of the Board
Action
Obtain Chair's Signature Dec. 18~ 1979
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December 6, 1979 tr-A PLANN iNG MEMO
TO:
FROM:
Kary Davey
Housing Advisor
Toby Kramer
Associate Planner
SUBJECT: Tax Exempt Revenue Bonds
This compilation ts Intended to respond to your request for information on~
previous postttons taken by County Governmental bodies on mortgage f inanclng.
Santa Clara County has for some time sought means to foster the develop-
ment of more housing affordable to low and moderate income households. Both
the adopted Housing Element of Santa Clara County and the reports of the Housing
Task Force, the Industry a~i Housing Management Task Force, and the adopted
1979 Urban County HCD ?~~~. recognize and respond to this need.
l) Th9 Housfng Element of Santa Clara County (adopted October. 1973)
11The County of Santa Clara strongly supports the creation of a
State Housing Finance Agency to help assure mortgage f inanclng for
both subsidized and market rate home loans and construction loans and
wi11 support legislation to establish such an agency".
1t'fhe County of Santa Clara supports the creation of a State Housing
Finance agency and recommends that this agency be impowered and
adeqmttely funded to provide financing for rehabilitation as we11 as
new constructions and to make direct mortgage loans to purchasers
of rehabilitated housing and l'tousing ln older nelghborhoods11 •
2) 1977 -Housing: A Call for Action --Santa Clara County Housing
Task Force
Adopted Policies:
"local governments should permit and assist the private sector to
provide most of the needed houslng fn appropriate locations and to
provide greater private financlng for a wider variety of housing for a
fu 11 range of i ncomes11 •
0 A11 levels of government should collectively provide substantial
public funds to provide she1ter for persons whose housing needs are
ignored or unmet by the private sector".
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Recommended Actions:
11.13 The GoveJmoJt. J.1/1outd be UAged .to (Jll!Jv.lrfe teadeAAlup .i:t 4ecuJLlng
pa(Ma9e 06 gene/Lal obUga.tio11 bon<U .to 6imlnc.t activ.i:tiu 06
.the CHFA 'CaU~o.tn..la Hou.6.ing F.inanc.e. Agenc.y).
When general obligation bonds were on the ballot in 1976,
the Governor never spoke to the issue during the campaign.
The state provides no subsidies for housing and the direct
lending program of the CHFA does not directly address the
needs of Jow or moderate Income persons because construction
costs for new building are not lowered enough by present
Interest rates. General obligation b(•nJs have been authorized
by the legislature and would help lower the cost of new construc-
tion. They have not yet been approved by the electorate.
JV.Al Tile. County 1.hauld act M a 6ac.i.LUa:to11. ~oJt .the .i.6.&uan~e o&
ACaltlu-FoJtan bond-.\ no.It a jo..i.n,t c.il:y/e.ou.n:ty p1to91tam. Thue
bond6 11JOuld make money a.va.llabte 601t ,f.ow ,i.nteJLel.>t: hou.6.iJl.9
Jteha.i;.i.lU:a.tion loan&.
Because of the compllcations and duplication of setting up
many individual Marks-Foran funded programs, the County should
enter Jnto agreement with the cities to prepare the ~roundwork
for a joint effort in all cities and the unincorporated areas
of the county. The County will assig~ the necessary persons
to the task ~f setting up the program, working with local
lending institutions on the bonds and/or notes, developing
agreements with the cities, and coordin~ting the administrative
structure with the CDBG program. The fina) result will be
to authorize the issuance of Harks-Forman bonds by the County
Supervisors after the clty/County agreements have been finalized.
J) September 1979 -Urban County HCO Plan
Comprehensive Needs, Priorities and Strategics Statement
Goal A -Housing Supply (first priority)
"6A -The Urban County should consider investigating the use of
resources other than CDBG to provide new 1ow income housing.
Sta ff w i 1 J review CHFA 1 s Mu 1t1-Fam i 1 y Hous Ing Construct Ion
Program, and the sale of ta~-exempt municipal revenue bonds for
la~ cost housing, and determine their potentlal use In Santa
Clara County''.
Goal H -Housing Deterioration
6H -Attempts should be made to expand the California Housing Finance
Agency's (CHFA) Home Ownership-Home Improvement (HOHi) program
no.~ operating in Campbell. Gilroy and Morgan Hill (and San
Jose) to other cities to provide mortgage assistance and additional
rehabilitation opportunities.
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7H -The Urban County staff should work with the cities to determine
resources identified in the Helghborhood Conservation Resources
Handbook may be appropriate for use 1n Santa Clara County.
Resources and programs found to have ctty support wlll be lncor--
porated Into the comprehensive neighborhood revttalizatlon program.
These resources 1 ncl ude the Marks-Foran Hous t ng Rehab 11 hat Ion
Program financed with local revenue bonds and the Section 8
Substantial Rehabilitation Program •
.It) Novemoer 1979 -Uving Wlthtn Our limits Santa Clara County
Industry and Housing Management lask Force
Objective #3:
Increase and preserve the supply of affordable housing, especially
In areas where there !s an excess of jobs.
Aetfon Recommendations:
Expand exist Ing programs and develop new financing tec.hn iques to help
low/moderate and middle tncome households obtain affordable housing •.
(Implementors: Public and Private lenders)
Summary: The proposed resolution for Santa Clara County to rssue tax-exempt
mortgage revenue bonds to assist in finar.cing low-interest rate single famlly
home Joans ts totally consistent with past policies and recommended actions of
the County to make housing more affordable. Financing is a key Ingredient
fn making unlts more affordable for low and moderate income famfl fes. The
option to Issue local Jy controlled revenue bonds must b·e kept open If the
County and cities expect to play a major role in providing the needed houstng.
3
~ RESOLUTION OF IHTENT ~
TO IHPlEl'tEHT A KOltTGAGE BOHO PROGAAK 9
WH~REAS, the County of SantB t '•r• (the "Issuer") pursu<1llt to PB rt S,
(camienclng ~Ith Section 52000), Division JI of the He•l~h •nd Safety Code
(tti.e "ACT"), h authorized to Issue revenue bori~s to finance single fomlly
residences; and
WHEREAS, the County of SAnt~ tiara has formulated a program to finance
,Ingle fanslly residences end has determined to lmplem~nt such program through
the Issuance of single faml ly mortgage revenue bonds (the "Bond~"); and
WHEREAS, th~ County of Santa Ciara wishes to provide for the hnpl~ntation
of s;uch • program •nd wishes. to •uthurlze the issuance of one or MOre issues of
8or.ds for the purpose of paying the cost of such progra:ii, upon such temt$ and
t;anditlons _,may then be agreed UP'Jfl by the County of Santa Clara.
NOW. THEREFORE, 8£ IT RESOLVED by the Board of Supervisors of the County
of S1nt• Clart':
Section 1. E.F. Kutton i Company, Inc. {"E.f. Hutton") or slmll&r quailfled
underwriter is h~reby authorized to assist th~ County of Santa Claro In the Imple-
mentation of the County's progra111 to finance single family residential ~rtgeges
to be originated by any flnanclel Institution doing business In the County of
Si'nta Clara.
Sect Ion 2. The County of Santa Clar<; doe! hereby authorize t.,c h.suance
•nd sale or-tii"e Bonds, In one or mr.ire series, in such an amount necesstiory to
pay tht! cost of financing the single family residential program, up to an amount
of $250,1)00,000.00, the first of such series In an amount not to e~eeed
$2~,000,000,00 upon such terms and ccr.ditlon' as may be mutually agreed upon
by the County and £.F. Hutton, or a similar qualified underwriter, the hsuance
and sale oj the Bonds to be autnor!zed by resolution or resolutions of the Board
of Supervisors at the me~tf11g or meetings to be held for such r.•urpos(t<;..
Section ). The County Board ?f Supervl5ors is authoriz~d to take all
•ctlon necessary to c~rry owt th~ authority conferred by this ResolutJQn and to
e11ecute ancl tlel Iver al I documents necessary to carry ">lit that ai•thorl ly or to
evidenc!!! tl.e ex ... rclse thl!reof.
Section 4. ThP. Issuance of the Bond~ pursuant to the aforem~nttoned ~rogram
Is sub]ect in •11 respect5 to the approval by the County of Santa tlara. acting
In good faith, of al I o111greements and other document!> reasnr.ably necessary to
complete such Issuance.
Section 5. This Resoh•tlon shllll become effective lnvnedlately upon ll!>
adopt~and appro-val.
PASSED AtlD APPROVFO by the Board of Supervisors of the Co~nty of Santa Clara.
this ---------day of __
• 1979
I t I , l ~ I . • ... ·~ t • \1"1: -m-t-i-e-.-o·t-o"'"fficr.T~ ---
------· 1979.
COUNTY OF SANTA ti.ARA
Oominfc Cortese
Cha I rperson
County Boa~d of Supervl!OOrs
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e A RESOLUTION SUPPORT I NG-
REVENUE BONDS FOR HOHE MORTGAGES
WHEREAS, the Santa Clara County Board of Supervisors
has passed a Resolution of Intent to Implement a Mortgage Bond
Program; and
WHEREAS, the use of revenue bonds would substantially
reduce down payments, allowing families otherwise fo;eclosed
from home ownership to purchase homes; and
WHEREAS, monthly mortgage payments would be brought
within reach of average family budgets through lower interest
rates; and
WHEREAS, additional funds would be made available for
lending, thus redyeing ~onventional housing Interest rates and
help stabflfze the housing market; and
WHEREAS, local tax bases would be enhanced; E<nd
WHEREAS, existing neighborhoods wou1d be rehabilitated;
and
WHEREAS, no new or continuing bureaucracies would be
required~ rather private financial institutions with skill and
experience In making and s~rvtcJng mortgage loans would be
utilized within policy guidelines set by responsib~e local
government~ and
~HEREAS, the loss of any revenue to the Department of
Treasury because of the bonds' tax emempt status is ove1ridden
by the compelling need to provide housing opportunities for
people of moderate income (80% to 120% of area median fncome);
BE IT HEREBY RESOLVED, that the County of Santa Clara
fully supports the use of tax exempt obligations for the purposes
stated above; that such uses be restricted to low and moderate-
Jncome families; that local government be allowed to continue to
develop this alternative source of revenue for the purpose of
attaining balanced communities and viable housing options for
all segm~nts cf our community.
PASSED AND APPROVED by the Santa Clara County Board
os Supervisors. this day of
1980.
COUNTY OF SANTA CLAR~
Dan McCorquodale
Chai rper:son
County Board of Supervisors
BRINGING A BOND ISSUE TO MARKET
BRIJIOIIG l BOND ISStJE TO MARI.ET
lfot until all the ajol'" pr"Ograa d11eiaions have been made can tbe
load Resolution., the Otfioial Statement or the term.s of the 1H2nd 1saue be
finalised. 'fbo\1lh the progru isauea shollld be contronted first, aome of
the vof'lc on the proara-and on the bond issue dooumenta can be done
simltueou.aly.
Ia the prosru dnelopmnt phase, the County. with the ad'Yice ot
its inTeat.ent banker and other advisors, will bave, among other" tl11.nga:
o haluated the economic te&Sib111ty ot the proposed
program;
o Deterained the eligibility requirements ror program
pe.rtioipants;
o Disouaaed tbe program with eligible lending
institutions; and
o DNtted tbe Pl'Ol-'!"UI doouMnta.
To oomplete the proceaa ot preparing and bringing a ttJnioipal
Bond la1u• to market, the steps enumerated in the bypotbetical tllle:
schedule that tollovs mat be acoomplisbed.
THI STEPS llBCESSlRI TO BRING l BOND ISSUE TO MARUT
Days Proa
Date ot Itea
Sale luaber
-20/-40 1.
-20/-40
-201..-0 3 ••
-20/-30 ••
-201-30 s.
PnPil:ATIOR !HD REVIIW OP' BOliV RESOLUTION -
Prepar"ed by Bond Coumel and approved by Issuer,
Underwriter, and ~nderwriterst Counsel.
IMABLISBMDT OF TENTATIVE 'CUMS OF ISSUE -
Deterained by Issuer, Counsel, and Hanqing
UDdel"'Wl'"iter. This include preliainary maturity
aohedule, call features, eto.
PJl.IPAUTIClf OD RBVIBW OF OPPICUL STJ.TIMBMT -
Prepared by Underwriters' Counsel and revi&Ved by
laauer, Underwriter, and Bond Counael •
PltIHTIRG 01 BOit> BDOLUTIOI DD PftBLIMDlJ.RY
Cif iCilL Stlf EidT -
Ordered after completion ot review.
MllTitfG WITB RATING lGDCI -
Would 1n0lude Underwriter, Iasuer, Bond oOunsel,
and Underwriters' Counael.
t)&fl rrom
Oat' ot It.ea
Sal• lullber
6.
.. 151 ... 20
8.
.. 101-12 9 •
.. 101-12 10.
..a1-10 11.
..a1 .. 10 12.
PRl'PlllTIOB AID REVIEW OP BOND PURCB&SI COllTRACT -
Prepared bf trnderNriters' Counsel and NYift'lltd by
Bond Counael, Is.suer. and Manaa1ne Undel"'V!"iter.
PRIPAJtlTtClf AID REVIEW OF AGUBM!B1' lM01IG
WMMR!i --
Prepared by 9ftd9rwri ter-s ' C<"unael and reYieved bf
Managing UndeMn"iter.
BLUB sn SURVEY .um LEGAL Irm:srMEHT MEMOJWmllM -
UauallJ handled by a law t'1rll speoi&liaing in
Blue SkJ legiatration.
IlfVITlttOR TO PROSPECTIVE UllDIRWRITEBS llfD
tiISmlbTfOR or bOCURd'ts ...
Sent by Managing Underwriter after consultation
with, and approval by. Iaauer. Documents
di•tributed include Preliaina!"f Ottioial
atat ... nt and proposed Underwriters doeu11enta.
tJUTRIBUTION 01 PRELIMINARY OFP'ICUL STlTIMDT TO liSTITUf rOilL fiV!Sf oR! -
Handled by Managing Underwriter-•
IRrORM&TIOH MDTDIGS WITH UNDIRWRITDS -
Held in those oi tiea wbere there is a auf"tio1ent
n'Wlber ot potential underwriters. The Managing
ttnderwriter, Issuer, Bond Counael, and
-underwriters' Counsel attend these meetings •
IIFORH&TIOll tmn"DIGS WITH POTllTI&L DSTITU'l'IOUL
lbiiD -
Held in thoae oitiea ..mere there 1a a autriaient
number ot potential institutional buyers. The
ManaaiDC tJndeMtriter, Issuer, Bond Counael, and
Underwriter•' Counsel attend these meetings.
·oays From
Date ot It.ea
sale l'fwlber
13.
-1 • t4
-0 15.
-0 16.
17.
TDTATIYI PRICE OP ISSUE AID SCl.ICIT.lTIOll 01
PRr-!iti D!Ttfottom mwww DD m:tcttlttdl
lSt OJilU! rok f ibSffiSBfp -blPOSHOii lilb h'Hlld lbnet -•
Handled by the Managing Ondef"Wl"iter, but with
additional aol1o1tat1ooa bf tbe other ..mer• of
the tfnder"Writing Aocount.. In all stagu, the
Issuer ia kept advised of price thinking, pr"eaent
indications ot insti tut1onal int•Nst, •rk•t
oonclitiona, etc •
Arter ocnaultation nth, and preliainary approval
by, Issuer, handled by the Managing Undervri ter
at a ... ting ot tbe Underwriting loaount tr"'ith
ve~bal aoceptance or rejeotion by the lle!lbera or
the Account.
RBCIIPT Of ACCPTAHCB FROM trcm!RVlttTDS -
Signed agreement among Onderwr!t•rs received from
eacb aeaber or tbe Underwriting Croup bl' the
Managing Underwriter, stating tbat tbflJ will
partioipat. in the underwriting.
SUBMI5SICll r-. PROPOSAL TO PURCBlSI TO THE ISSUD -
Handled by the Managing Undel"Writ.er in penon at
a ... tine ot the Boe.rd ot the iasuiog agency.
Mcieting uau&llJ takes place 1n the mrning-10:00
a .a. -11 : 00 a .a.-wi tb the :i&1ed.1ate acoeptanae
or reJeotion or tbe proposal by tbe Iaauer.
Sent by the Manq1ng Underwriter to tbe --.rs
ot t.be UndeMfl"iting Group, oon~ ti.Dal
pr1o1ng, coupon rat.e, underwriters' spread,
aa.napMDt tees, and other term or the ottering.
18. BmlD PRIITIIG ORDlllD -
19. PIIITZIU OF TRI FI1UL OITICUL STA?Dar -
D1atr1buted bJ Mlnq1nl Underwriter to ....,.ra or
Undervritina !ooount, i.Dat.itutional inve•tora, Isauer, eto..
Daya fl"'Oll
Date or Item
Sal• lumber
+1 20.
+11'1+21 21.
+15/+22 22.
23.
+30
Deterained and distributed by "9Mgtng
UadeJ'Vriter after tbe propoaal u acoepted.
ill waenta and ocatil"Bationa or ord•rs are
1"9CeiTed by ~s at the opening ot busiMsa
tbe morning tollovi!ll the sale date.
SIGl!BG r.6 IOIDS AID DRY-ROI CLOS!HG ..
Signed bJ ane otf'icial ot tbe Is.suer. The aaa
d&J all doa\aanta are cbeoked by the Bond Counael
and Cotmael tOf" \be Underwr! t!'~ to be certain
nerrtbJ..el is in order.
DBLnm or, .um PllMBft roa, THE m -
Prepared by Hanacing r:aderwriter and distributed
to tbs Nabers ot the Underwriting 1ccount and to
Ute Iaautll'".
PRIPlllnCll OF LIST OP GROUP PUHCBASBS AID SAT.IS
it tmmEJlS OI fill tnmlmntlTING lCCOUllT -
Prepu-ed 'by Managing Underwriter EiDd distributed
to the ~ ot the Underwriting lceount. and to
the Issuer.
PRIPUl'!'IOJI OF Sl1U>ICATE PJlOPIT BDAIDOlll -
Prepared by Nrinagtng UndeMft"it.er and aent to tbs
Issuer.
25.. IWIAGillC UIDEJMtlTBR POLLOW-TKROUGH -
latabUvm1at and aonteoriDC or ~ amt
trading. Continuing intormtion and OJ)lllrating
result• or Issuer are prorlded to rating aceno1••· dealers, 1nait1tutional iDYeators, ate.
-Scbeclule: Brinl&i0 8 a Bond luue to Market UUU -UNDERWRITER
Wiii-iSSUER
ACTIVITY
J. • ••• , ....... 111 ......... ,.... a4 ....
4 ~of ...... "9s11lllMOft .. IMlilM.,Y Oflicla4 ........... .
CCC -BOND COUNSEL
DAYS FROM DATE OF SALE
-40 -JO -ao
-wwuuw i I •llHUUI coccccccccc
I I I I uuuuuuuuuu I ~ t I I ~ uuuuuuuuuu l~ ttuuwul'= I I I
-+---;'-uuuw
alilllllll ccccc
I Uuu
-10 0
I I
I
+10 ..-20
I
I I I
1 ;
I I
\ I
I
!
+30
I ! I l I
I ! I 1111 I l I CCf
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a 1117 k I 0111•-r1re fll °"'919 '9M .... 191Clatt I "· ............ ...,.... ..... . ....., ..... .-........
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. H~Uf:1 .Ji!:f:i!rU::iJ _ u. I~
flab E'~i g-a .. -a~ ,i~ 11:1 !:rl 1111 1 11111 I ~ ~
• 1 s IP 1 If' 1 p a; n • if"' • " -· ~ hi dis l.. Jiff f~h hli~ :J i
liJHir l1t'~f r IHI~ lfS~ 1111:· f i:
a1r11Ji ; ~!, f [J;! iJ!; iti a! :I ~t lnJt! 1!1r i~l'f ;~:s ~h li !_ ~
8' 11 i ~ . . --Ii --~ i -; I! --I!"' I 1 -i 8 ,.. ~ ! =· f,. f 0 lrhaJ ·ol1 t hdi lh d ; D
'li 'it~, ra;1''i !1filfrlM!~ I ~ 5! l.1 ill ll'rJ le I ~~! flf I 0 ~
i ~IP' 1· 11 litJtw firs: l•"f = ~ ff I . I_ ;. lili:rt _.::f· ~ ~
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II '"II . 1111:1. ~-if' ·1111 -r., rl s r s~ri r1a1r I *a
. \
Planning Magazine, May, 1980
The Chica:go Plan
By R~ymond Tatalovich •nJ Eliubeth \\'•:men
Jn July 1978, the city of Chic.u;o nents made reference to the 1<l60s
issu1:d SI 00 miliion in tax-t:"<cmpt precet:le':it of using indu<:.trial ~venue
bondo; to fin.int.:e home mortr,.lges bonds to attract indu ... trit•<; to cities.
for ll'w-and middle-income home-The program was m>t intended to
huvc·rs: A second i-;sue for $150 mil-aid the very poor or the rich but
lion w<ts made in March 1979. rather middle-incumc people. lmpli-
Tht· idea for th•• mortgage bond cit in its de-sign was the assumption
issue ii; credited t<> E. f. Hutton &: · that the entire city would benefit.
Company, which cooperated closely No neighborhood was allocated a
with the city ;;i110 with First Federal quota ,:if mortgages, ncr were funds
Savings & Loan of Chicago. Ulinois's to be tilrgeted to certain .ueas.
!Jr!-(est residenli.11 lender. As a .esult Monitoring was the responsibility
f'i this alliance between the politic.:ii of the Mortgage Revenue Bond Ad-
eslablishment and the financial visory Committee, a m.i.yoral advi-
commu ... ty, Chi<.:ago·s bonds earned sory group :'::"Imposed of six finan-
an AA+ rating from Standard & ciErs. The findings of this group,
Poor. and the dty 5old them ea-;ily. issued in reports to the city councii_.
In its 'Jriginal prupa5al, ChicJgo emphasized the program's successes.
:ret four eligibility requirements for But dissident aldermen. community
participation. A borrower's total groups. and some outside observers
adjusted gross income coukl.not ellt-were less optimistic, charging
ce(;d $40,000 a year, and the home • that too many mortgages went to
for which the loan was secur.-J had purchasers of condominium apart-
to ~ owMr-occupi«I. Single-family ments in atflucnt neighborhoods
h('ruses. condominium apartments, bordering Lake Michigan. Others
and two-to six·urtit apartment poinh:d out that tlie $40.000 income
buiiJings qualified. Finally. the bor-ceiiing of the first bond issue,
n:iwer h.11d to meet conventional coupied with high real estate prices,
mortg.1ge rt'quil'ements. militated against the indusion of
Chicago's program offered an in-lowt'r income applicants.
terest rate of 7.99 pen:ent, compared in fact, about a kurth of the par-
to market rates at the time of 9Vt to ticipants in Chicago's first program
10 perunt Thus, a homebuyer could had annual incomes over $25,000, an
save $.10,000 over the lite of a 560.000. amount ed.rned by .:mlr 4.43 percent
29-year. 10 per~nt mortg<ige. of Chicago families in 1970. !n the
The Chicago program included second bond issue of 5150 million.
several SMfety featuh::. to ensure that the city earmarked 8~ i'erce"t of the
investors would get their money mortgages for applicants with in-
back: a 515 million reserve fund; 20 comes of $29.500 a year or less . .The
percent downpayments; and a re-remaining funds were available to
quire.ment that applicants take out applicants with incomes up to $40,000.
twice the u!'ua! amnunt of mortgage The average mortgage provided
insuranno. The investment bankers under the Chicago program was
received about two percent of the $38,675-generatly with a 20 percent
. bund proceeds tor designing the downp<1ymf!nt. Yet, in 1978, the
program. E. f. Hutton's ftt tor the avuaRe purchase price in thl'
uri~in.tl $100 million bond safe was Chicago 011rea was $77,800 for a new
$2.J million. hou:st? anJ $00.000 for an older house.
One purpose of ChicaRo'o; pro-Thus. it appe;m1 th.lt this program
JtrJm was to Jttract suburl•.mitcs did, in t:ict, ~rve 11 les'i altlacnt
l>.1( ~tu the city .inJ lu dt:tcr the uut-public th.m the conventional murt-
mi~r.itiun of middle-class city resi-gagt< market. Cle.trly. the program
Jmts to the suburbs. A long-term responded ~o a need. Therl! were
purpose W.l" to .ltlrac.:t industry and about 8. 000 applk.inh for the 2.148
.al•l tu the cit)''s t.ix b.i5t'. Propo· mottg.1gt.'S otfered in the first round.
1'"'1'·.~•'"P-,~.; o• o' •. •'•···.,.--··· .. ~ A\-~' '
Did the program encC1urage the
inmi~ration of suburbanites to the
dtyl While d.it.; is still incomplete,
First Federal 5,lVings & loan esti-
ma.tes tha< 3o 4 p~rcent vf the sellers
moved from the city to the suburbs,
whilt> only 31.6 percent of the buy-
ers moved from the suburbs to
Chicago_ The n~mainder of the buy-
ers anJ ~eller~ m1..1\red within the city.
Although the program was not
targeted to spedfic neighborhoods,
a Ji.sproportionate number of mort-
gages went to people buying hom~
in " few neighborhoods. Distribu-
Hon may have been affected by the
fact that applications for the loans
were processed through one savings
and loan institution, First Federal.
which does not have outlets in all
city neighborhoods. But the distri-
bution probably also reflects the
vfltying income distribution in the
city. In some sections; relatively few
families would have qualified for
loan!>. But the advisory committee
applau1ed the fact that each zip code
area in the city received loans
The Chirngo Reporter, a publica-
tion of the Community Renewal So-
ciety, ~private social service agency,
gathered data on over l,OCO of the
mortgages made under the program.
We used this dat.a to determine the
types of neighborhoods that attracted
homebuyers under the plan. We
found that homebuyers tended. to
avoid areas with heavy (over one-
third) concentra ti ens of blacks,
lower (under $15.000) family in-
comes, and less V.?lu;!ble (under z::,cc=; ~h~~~~.,,.; ;~~~!:. T!":~ !::o~,..~
l>hare of mortgages went to neigh-
borhoods with above average num-
bers of Spanish-speaking residents,
however. These neighborhoods are
considered tr<lnsitional areas under-
going some degree of social change.
Thus, we can conclude that the
mortgage program facilitated ethnic
integration. According to the
Chrrago Rtporter, a third of the
mortgages went to blacks and La.ti·
nos. However. the minority appli-
co:ints tend('d to buy homes ou~side
minority m•ighborhoods.
R"""'""" T •t..lot>ltlt ., ""'tttor of tit• C,..t.., for
Ur&can f'ulici-111 L'-'r"'-Univ~n!t11 of Chical(o. Eli-
:.ah.•rlo W•n..., it adiwttt ,,n;,fruor of rolirn•I "' "~··t •II L<1 ..... 1.1.
.A
·~
'
.
'
'
'
--......... -.. ~ .·· ...., .... ..t.J;.·--. ~t .. -
-------------------------------------·----------------
e:~ '< tot
\,I) tll ~a CIO~ 0 c... ~ f=
"lot! '< Ill 'C l"'I 0 Ill OQ OQ t1 l"'I
Ill Ill 'ti 'ti ::r ::r ..... n l"'I ID 11> I-" 't)
(0 m
"1 rt t1 11) 0 (l. l"'I • I I
. -------"' . ---•--~ ·------
--·· Qmrd•§jf l'l!!Jlf . . ·. HP.1!!fi11Ht!r!l!ii t:" ~ .t!JU~i!l!Ulti~iit!t!· !J:Ji~f (!!31! • 11 l1~!t•ftttt1 fiii~ii~l!l 1b:;;~b hl~~f!! p·! "1 ~g_dj , 11!U;1Ht1!iunito ...
e
Jl'.,'f;~liif H l!iif-~Jii if Ii ill: I Q ·I l--11 -~ii!if iit i};; 1 -I e ...•• t _J,1nJ1 t. _ -~-• lu. nrlGlr uw·--~ . 1Irs'r~ ~·;~;~~ [ ~ -
. ir-11n_ :1p,_ifttiiu1;i1 "i"'i"!Pu_:~i _ · ~ ~ :· · -.;. r
· '' =11-•1·1· ·t·. ·tn11g .. it'da~ •. 111111·! ,rn+;· . . . .· .-. ~ . I I I . 1, ·. II I J,:1 .... 1• '' .. If d lllUfJ . . ' i ~11,1 r11t '1, 'ii:ltsil;t!itf-~ Utp1s1! nm!;~~n .. t --~;f IJti bt!lu!:dt Jliltt,itHIJf l!~.-I --;; =mn' -1 nSj i i-.
. . . .......-.-' .. ------. ------
•
e. •
JHCOHE l.THTTS for )'At.0 /\L1'0 mm nousrnG r1:m:RA~I
,Fmai ly
!\ bt• H\'ttlt\n 1nco;:1r-............ -... --·-~ -------~-..-.--.--·
1 $15, 000
2 $17 ,125.
3 $19.250
4 .. $21,375
5 $22, 750
6 ~211, OG5'
1979-80
$12,000
$13~ 700'
~11,100
$18~2~0
$19,250
Pd c:e R:mi•.e of llu .lt
120! Med 1 ;in -<!.~!·-~~07. _!_~-~·. f{/1 -------
$18,000 $22,080 to $33,120
$20,550 $251208 to $37. 812
$23,100 $28J 33G to $42,504
$25.650 $-31, '1611 to-$47,196
. $2:', 300 $33,t~cg \0 $50,232
$28,875 $33,1:20 to $53, 130
~---·----· ---~-----·--------------·----
. .
. !!!:!P-s i :rn UnH S:f.?.e. ---
1-2 1 bcdroo:r.
2 bedroom
3 bedroom
' L tending Jn?lt f.tutlorrn '-'lll, on th<;! .ov<?ragc, lc•an ·to liouschold::; if tht!ir
•umtwl J11comc cqtinls 28Z of their houninr:. cosls. (R:mgc ;ls 25% to 38%,
dcrc-ndiuG on individunl c1.rcum!>t nnccs -no. of 'WDl!C earners, other debt,
job flt nh!lity.) . · . · . •· · ··
2. ltocnco,;ucrn nssoe1.~t1ou dues include ltisvnmcc c.nd nvcrase around $60 •
l. Lonu 1.t• 12. 3/4"'1., 90:1: of hou!~C: Vitluca 30 years .• * . . .
4. UtJJ.itici; not included in houoing costn.
,· ·. ..
J>ep~rttuent of l'lanninc rmd: Coomau.,ity En.v1.1onmcnt
J•nJ.o Alto
· Octobt~r 23; l.979
...
' ..
* Price ranae of unit may be higher if' interest rates due to tax-free ·bonds are
lower tlian those' in assumptiqn no. ~, abov~.
*
:K 170
., "'
•
Vol. II No. 1 July 2. 1980 the independent newspaper for Redwood CitJ
City has shortage
:of sewage capacity
Rt'dwood City is pressing ahead with a request to
t•:itpand its new sewage treatment plant, now under
.'onstruction. because when the plant opens in April 1981,
1 he city wm already be ex"--eeding its sewage limits.
During a joint study session held un Monday; June JO
between the City Council and the planning commission,
Director of Public Works FTank Addiego and City
Manager James Fales ouUined the city's sewage situation
in ~ specially prepared report
The city has applied for grants that would fund the
e:itpansion o( the plant in 1984-85 and give the city extra
sewage capacity. which would allow for increued
de'lo·elopment. Redwood Shores and the Port of Redwood
City are the only areas which have excess capacity.
Overall, this means lhe city is in better shape than any
other surrounding city, said Falt$.
Fates said tbat a study is now under way to determine
whether any sewer uten came onto the city's system
illegally in recent years, or if an)' users are discharging
illegal amounts of waste into the system. He thints that
there may be such violaton in the Fair Oaks Area.
, Because of outdated monitoring equipment used in
the early lf'l'O's. the city's sewage needl were
inaccurately. calculated. said Addiego. The result of that
error means that the city hall will be dilcharging more
sewage into the new plant than it. was allocated by the
South Day Systems Authority, the agency that controls the
plant.
"We were shorted Crom the very heginning." s111d
Fales. who blamed it on the ~tate go~·ernment's "policy to
restrict growth." The new plant is being primarily funded
by stale and federal grants. which cover more than S7
percent of the (:osts. The cities of Redwood City, San
Carlos, Belmont and Menlo Park are all sharing in lhe
remaining cost.
Fales said he believe1 "extra capacity could lie
squeezed out" of the new p!ant through l{ood
management, which may alleviate the city'~ sttorUall.
The city's sewage limits are expressed in th~
categories: millions of gallons per day, pounds of
suspended solids rrss'. and pounds of bioch~m ic!il
oxygen demand f BODl. Alt!lo\lgh the city ha:; LM million
gallons per day extra volume, it falls short in the other two
categories. Through some plant modi£ic;,itions curtentl)'
under way, end changes to the Diamond Shamrock
chemical plant, the city will break even in the BOO
category l:iut still exceed its TSS limits.
Since Redwood Shores and the port ure not utili:tin~
their full sewage capacity, the plant wi!l be able ta cope
with the city's exti·a sewage temporarily. City
administrators hope that the plant's modifi~alions will be-
made in time to absorb the-city's excess TSS. Good plant
management might also take care of the city, said Fales.
by .\natole Uurld11
Council policy on housing
)< The city may issue IUIC mi!lion in tax free a "policy statement, not a legal commitment." The
rtt"ftlue bonGI to finance the construction u1 single £amily. resolution has a three year limit, after which time it
i;,nd multi-unit hm•ir>g. expires.
U) wianimous vote, with Councilman Robert Spillers The action was taken because of a pending federal bill
absent, the Council pased the resolutic:m at a special that would prohibit cities from issuing tax free revenue
meetin& on June 30. bonds if they had not stated their intention to do so b)· July
Councilman William Rhodes expreued concern thlt I, 1980.
the city was committing itself to such a major . City Manager James Fales '\aid the action will ··buy
development or redevelopment project, espeeiaUy in light the city time" in order to figure QUt whelher ii wants to go or the city's limited sewage capacity. the revenue bond route to rehabilitate \lr .ftvt>lop new
City .Attorney David Schrlcker said the resolution wu housing projects.
Trim grade. school budget passes
Though the Redwood CUy Elementary School District
has uniil JuJy i4 to approve it! budget, district tn;stees
came one step closer to that pl when they paned a $12.7
mm~ t~tative ~ctaet_}~t ~ June ~ beard ~~i.nt.
Trustee Orrjn Cross queslioned the s-ito,mo allocated
for sub&Utute teachers, 11oting that, "at iS5 a day for 1:ach
subslit'llte, the flguft provide-& for 12 substitute day! for
every teacher in \he district. '11lat s&?ml" h11£h to me." . . .