CC Resolution No. 99-089RESOLUTION NO. 99-089
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO
AUTHORIZING EXECUTION OF AGREEMENT BETWEEN THE CITY OF
CUPERTINO AND CAROL A. ATWOOD REGARDING HOUSING
ASSISTANCE
WHEREAS, there has been presented to the City Council a proposed Agreement between
the City of Cupertino and Carol A. Atwood regarding housing assistance; and
WHEREAS, the terms, conditions and provisions of the agreement have been
reviewed and approved by the City Attorney.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
Cupertino hereby approves the aforementioned agreement and authorizes the Mayor and
the City Clerk to execute said agreement on behalf of the City of Cupertino.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Cupertino this 5th day of April, 1999 by the following vote:
Vote
Members of the City Council
AYES:
NOES:
ABSENT:
ABSTAIN:
BURNETT, CHANG, JAMES, STATTON, DEAN
NONE
NONE
NONE
ATTEST:
APPROVED:
Mayor, City of/Cu~-~rtino
AGREEMENT BETWEEN THE CITY OF
CUPERTINO AND CAROL A. ATWOOD
REGARDING HOUSING ASSISTANCE
This Agreement is executed this __ day of ,19 , by and
between the City of Cupertino, a municipal corporation, hereinafter referred to as
"City" and CAROL A. ATWOOD, who has been employed as Director of
Administrative Services by City, hereinafter referred to as "Atwood."
Recitals
Whereas, City has employed Atwood, as its Director of Administrative Services;
and
Whereas, City, pursuant to city council Resolution No. 99-070, encourages
department heads to reside within Cupertino corporate limits to ensure their
ready availability and familiarity with the community; and
Whereas, the costs of housing within the city limits are substantially greater than
surrounding areas; and
Whereas, City and Atwood have met and discussed compensation and realize that
due to extremely high costs of housing within Cupertino, City must assist
Atwood in obtaining suitable housing in Cupertino; and
Whereas, Atwood contemplates the purchase of a single-family residence within
Cupertino, hereinafter referred to as "the residence."
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
Purpose
The purpose of this Agreement is to set forth those understandings reached
by the City and Atwood regarding housing assistance.
Terms of Employment
Nothing contained herein shall be construed to provide Atwood a contract
of employment with the City. City, through its City Manager, continues to
maintain its sole authority to retain or dismiss its Director of Administrative
Services, from employment. The exercise of such authority by City shall
not establish in At-wood a cause of action for money damages due to a loss
of housing assistance provided herein. Nothing herein is intended to create
any obligation to provide housing assistance for any person or persons
except Atwood herself.
Terms of Housing Assistance
A. Loan
Atwood may obtain, upon request, a loan by City to Atwood not to
exceed 5 times her gross salary to be used for the purchase of a
residence of Atwood's choosing within the City of Cupertin0; provided
that said loan not exceed 90% of the purchase price.
Said loan shall be evidenced by a promissory note in favor of City
secured by a first deed of trust encumbering the residence. Said
promissory note shall be for a term of 40 years and shall bear a fixed
rate of interest, where the interest rate shall be the 1 lth District cost of
funds prevailing immediately prior to making of the loan.
Said residence shall be occupied by Atwood as her primary residence
and shall not be occupied as a residence by other persons not in her
family without written consent of City.
At any time during the term of the loan, commercial or other financing
becomes available at or below the interest rate applicable to the city
loan, Atwood shall refinance and retire the city loan.
Atwood elects a 2% (200 basis point) deferral fi.om the 11th District
cost of funds rate for a period of five years fi.om the date of the
inception of the loan. At the conclusion of the 5 years, the interest rate
will revert to that originally set forth in the note, or the interest rate
then prevailing under the program for fixed rate loans, (1 lth District
cost of funds) whichever is lower. When the loan becomes due, or is
otherwise retired, the value of the deferral described above, shall be
paid off at that same time. The value of said deferral shall earn no
interest.
D. Atwood may prepay at any time all, or a portion, of this loan without
penalty.
Atwood shall repay said loan in equal monthly installments of principal
and interest and shall authorize City to make automatic payroll
deduction to cover payments with respect to the City's loan. Such
payroll deduction shall have priority over all other deductions except
PC/DIR/RES/A/H32999 2
those required by law. City will provide Atwood a year-end statement
showing the amount allocated paid to principal and the amount paid as
interest.
F. Notwithstanding any provision to the contrary, the promissory note shall
become immediately due and payable upon sale or transfer (except for a
transfer into a living trust or other probate or tax mechanism where
Atwood and her spouse remain primary beneficiaries.)
Equity Sharing
1) In addition to said loan above described, City shall contribute a
sum of not to exceed 30% of the bona fide purchase price to be used
to purchase the residence. Payment of this sum shall entitle City to a
proportionate share in the equity of the residence as provided herein.
Title to the residence will be held by City and Richard T. and Carol
A. Atwood, (in community property), as tenants in common.
2) Atwood shall be responsible for taking out and maintaining, at
her sole cost, fire, casualty, and liability insurance on the residence
with coverage and terms, and in an amount, which are satisfactory to
city and naming the City, as additional insured thereunder, as
beneficiaries in proportion to the City's equity interest. In the event
that the parties agree that earthquake insurance is appropriate and
available, the parties shall bear the cost of said insurance based upon
their respective interests in the equity.
3) Atwood shall be responsible for making all necessary repairs and
maintenance to the residence, provided, however, that with respect to
any specific repair or project (e.g., roof, painting, fencing) whose
cost is greater than $2,500, the parties shall share the cost of said
repair in proportion to their respective equity interests at the time the
repairs are made. Prior to commencing any repairs costing $2,500 or
more, Atwood will confer with City to obtain agreement as to said
repair.
4) No remodeling of, or improvements to, the residence may be
made withot~t written consent of the City.
At any time, Atwood may provide to the city manager a written
request listing proposed specific improvements she intends to make
PC/DIR/RES/A/H32999 3
to the residence. With respect to each specific improvement, the city
manager may:
a) Approve the improvement and agree that the City shall
contribute to the cost of the improvement based upon its equity
share.
b) Approve the improvement, but refuse to contribute to the
cost of the improvement. In that event, the cost will be borne solely
by Atwood and said cost will be added to her share of the equity.
c) Not approve the improvement with the exercise of
reasonable discretion.
5) The parties will share real property taxes and assessments on the
same basis as their respective equity interests in the residence.
Closing Costs
City shall pay or reimburse Atwood for 50% of her closing costs as
the purchaser of the residence.
Sale or Transfer of the Residence
A) Atwood, at her sole option, may sell the residence at any time based
upon a market price which is mutually agreeable to the parties.
B) Upon sale, the proceeds shall be distributed as follows:
1) Necessary costs of sale.
2) The parties will share the balance on the same basis as their
respective equity interests in the residence, as adjusted for the value
of any improvements described in Paragraph 3G4 above.
3) From Atwood's share, the balance of the city loan described
in Paragraph 3A shall be repaid out of escrow and prior to disbursal
of funds.
Termination of A~reement
A. Atwood acknowledges and agrees that this housing assistance
agreement is not assumable by any subsequent buyer or transferee of the
residence in that it was specifically negotiated as part of the terms and
conditions of Atwood's employment with City, that the payroll deductions
provisions act as security to the benefit of the City, and that the various
PC/DIP,/RES/A/H32999 4
aspects of the City's housing program indicate that the assistance is
fashioned for Atwood alone.
B. It is further agreed that upon termination of Atwood's employment, for
any reason, or upon her no longer using the property as her permanent
residence, the residence shall be sold pursuant to the provisions of this
Agreement.
C. Upon the occurrence of any event described in subparagraph 5B above,
Atwood, or her executor or administrator, shall be granted the option of
purchasing City's interest in the residence within two years of the date of
the occurrence. During any such option period, Atwood, or her executor or
administrator, shall continue to make all payments with respect to the
residence that Atwood would otherwise be required to make regardless of
whether any option described herein is actually exercised.
D. In the event that Atwood or her executor or administrator does not
exercise her option, then City shall have the option to purchase Atwood's
interest in the residence within 30 days after expiration of Atwood's interest
in the residence.
E. Any options described above shall be for the purchase of the residence
at a price established as follows:
Unless the parties otherwise agree as to the price, each party shall
appoint an M.A.I. appraiser and their decisions as to the market value of the
residence shall be averaged and shall be final, unless they differ by 5% or
more, in which case a third M.A.I. appraiser shall be selected by the other
two appraisers. The third appraisal shall be averaged with the closest other
appraisal. The mount so averaged shall be final. Cost of all appraisal shall
be split equally by the parties.
6. Miscellaneous
A. Neither Atwood nor her executor or administrator shall sell, lease, rent, or
encumber the residence in any way without the written consent of City in advance.
B. It is understood that incorporated into this agreement are the provisions
contained in City Council Resolution No. 99-070. In the case of any conflict
between the provisions of that Resolution and the provisions of this agreement, the
provisions of City Council Resolution 99-070 shall prevail.
PC/DIR/RES/A/H32999 5
C. Binding Effect
This Agreement binds the parties, their successors, and personal representatives,
and is not assignable by either party without the express written consent of the
other party.
D. Invalidity
In the event this Agreement or any part thereof should be held invalid, City
and Atwood agree to discuss alternatives, however, Atwood has no vested right to
alternative compensation.
E. Spousal Agreement
This Agreement shall become effective only upon the consent and
agreement thereto by Richard T. Atwood, and shall become null and void if he
shall refuse to execute any or all other documents deemed necessary by City to
initially consummate this transaction in its entirety. Richard T. Atwood also
agrees to execute all documents necessary to carry out this Agreement at all times
during its term.
F. Authority
The City Manager is hereby authorized and directed to execute all
documents necessary to carry out this Agreement.
Dated:
C~~e ~ ~~~n~-~
CAROL A. ATWOOD
CITY OF C rUPERTINO
(~C_JLi~iGl~ ~`iGL
Wally Dean, Ma r
ATTEST
City Clerk
PC/DIR/RES/A/H32999
I agree and consent to
each of the provisions of
this Agreement.
Richard T. Atwood
APPROVED AS TO FORM
PC/DIR/RES/A/H32999 7