HomeMy WebLinkAbout05-24-1993 Item #8CITY OF NEWPORT BEACH
Marine Department
May 24, 1993
TO: MAYOR AND CITY COUNCIL
FROM: Marine Department
Agenda Item No. 8
C -2370
SUBJECT: INTEREST RATE REDUCTION ON BALBOA YACHT BASIN
STATE LOAN
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BY THE CITY CC_
CITY OF NEWPORT !: L'.fA l i
MAY 2 41993
APPRQVD 7 n.
Recommendation: If desired, approve Resolution No.
authorizing the Mayor and City Clerk to approve an amendment to the
City's contract with the California State Department of Boating and
Waterways for the Balboa Yacht Basin Reconstruction Loans.
The amended contract reduces the interest rate from 6.0% to 4.5% on
the unpaid balance commencing December 1, 1992.
Discussion: The City Council, in November 1982, and in August 1983
contracted with the Department of Boating and Waterways for a loan
in the amount of 2.5 million dollars and 800,000 dollars to rebuild
the Balboa Yacht Basin Marina. The repayment schedule began on
August 1, 1987 and August 1, 1988. The loans were originally
amortized over 30 years with an interest rate of 7.9% per annum.
The State of California, in 1988, reduced the interest rate on the
outstanding loans from 7.9% to 6.0%. Now, due to the current trend
in lending rates, the Boating and Waterways Commission at their
meeting of November 1992, approved an interest rate reduction to
4.5% for all local assisted loans currently having an interest rate
greater than this amount.
The current interest and principal payment at 6% amounts to
$268,598. The new principal and interest at the 4.5% level will be
$236,372, for a net saving of $33,226.
David Harshbarger
Marine Director
Attachment: Third Amendment to Contract