HomeMy WebLinkAboutCITY EMPLOYEES IRC457 DEFERRED COMPENSATION PLAN - APPROVE F,.iTY OF HUNTINGTON BEAD..
MEETING DATE: September 18, 2000 DEPARTMENT ID MBER: AS 00-040
Council/Agency Meeting Held: °I--I�_)0
Deferred/Continued to:
proved ❑ Conditionally Approved ❑ Denied
uncil Meeting Date: September 18, 2000
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W- Citv Cler ' Sianature
Department ID Number: AS 00-040
CITY OF HUNTINGTON BEACH
REQUEST FOR COUNCIL ACTION ,
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SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS
SUBMITTED BY: RAY SILVER, City Administrator XW2
PREPARED BY:
SUBJECT:
JOHN REEKSTIN, Director, Administrative Services�p }
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Approve Foreclosure on Defaulted Trust Deeds — City Employees'
IRC457 Deferred Compensation Plan
Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachment(s)
Statement of Issue: Should the City Council approve the funding of $10,500.00 to cover the
costs of foreclosure to cure the defaults on specified plan assets owned by the City of
Huntington Beach as Trustee of the City Employees.IRC457 Deferred Compensation Plan?
Funding Source: Non -departmental Miscellaneous Account EAA-ND-101-593-00, current
year savings, $10,500.00.
Recommended Action: Motion to:
1. Appoint the Director of Administrative Services as Trustee of, the City of Huntington
Beach Employees IRC457 Deferred Compensation Plan.
2. Authorize expenditure in the amount of $10,500.00 to cover the costs of the foreclosure
procedure to cure the defaults on specified plan assets owned by the City of Huntington
Beach as Trustee of the City Employees'IRC457 Deferred Compensation Plan.
3. Authorize the Director of Administrative Services to proceed with the foreclosure
procedure against the following parcels:
APN
COUNTY
949-130-019
Riverside
7275-002-102
Los Angeles
def comp rca 18sep00 -2- 09111100 9:11 AM
AUEST FOR COUNCIL ACTi..N
MEETING DATE: September 18, 2000 DEPARTMENT ID NUMBER: AS 00-040
3128-016-016
Los Angeles
3107-011-082
Los Angeles
3374-016-002
Los Angeles
Alternative Action(s):
Do not approve the funding -request and continue to hold the non -performing trust deeds.
Analysis:
At the closed session of the City Council on May 15, 2000, the Real Estate Services Division
presented an asset management plan for the trust deed portfolio of the City of Huntington
Beach Employees' IRC457 Deferred Compensation Plan.
The asset management plan consists of nine (9) distinct steps:
1. Cure the real property tax delinquencies.
2. Appraise all non -performing assets.
3. Freeze current disbursements on individual plans where a non -performing
trust deed is part of a multiple trust deed package. Use performing trust
deed(s) to offset costs to cure non -performing trust deed.
4. Present a financial overview to plan participants and solicit feedback.
5. Cure defaults using foreclosure procedures.
6. Reimburse the City of Huntington Beach for advanced funding used for plan
expenses from foreclosure action proceeds.
7. Distribute foreclosure action net proceeds after expenses to plan participants.
8. Establish minimum performance requirements on all plan assets and adopt
specific guidelines and policy to cure delinquencies or defaults to ensure plan
security throughout future operations.
9. Provide a semi-annual report on the City Employees' IRC457 Plan to the City
council and participants.
Progress made to date includes the curing of the real property tax delinquencies, appraisal
of the non -performing assets, freezing of distributions on specific plans, and an
informational meeting held on June 29, 2000 with the plan participants.
The next step in the management plan is to initiate the 'foreclosure procedure' (step 5)
requiring a period of at least 3 months and 21 days to meet due process requirements.
The use of the foreclosure process will result in one of several possible outcomes:
The current property owner will pay delinquencies and bring the accounts
current.
def comp rca 18sep00 -3- 09/11/00 9:11 AM
K-QUEST FOR COUNCIL ACTi,,N
MEETING DATE: September 18, 2000 DEPARTMENT ID NUMBER: AS 00-040
2. The foreclosure sale takes place with a new investor buying the property for
minimum bid or higher.
3. The City of Huntington Beach (as Trustee) becomes the owner of the real
property with rights to sell in the open real estate market.
Funding advanced by the City of Huntington Beach to cure defaults will be repaid from
revenue- generated from the foreclosure or sale of the subject real property.bearing interest
at the rate specified in the note secured by the trust deed. The net proceeds, if any, will be
distributed to plan participants based upon individual participation levels within each plan.
The foreclosure procedure is estimated to be complete by February 1, 2001, and any
subsequent real property sales are estimated to be complete by October 2001.
Environmental Status: Not Applicable
Attachment(s):
RCA Author: M. Heineke
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RCA tOUTING ?HEET
INITIATING DEPARTMENT: Administrative Services
SUBJECT: Foreclosure on Non -Performing Trust Deeds
COUNCIL MEETING DATE: September 18, 2000
R
PCX TTACHMENT$
STATUS"
Ordinance (w/exhibits & legislative draft if applicable)
Not Applicable
Resolution (w/exh ibits & legislative draft if applicable)
Not Applicable
Tract Map, Location Map and/or other Exhibits
Not Applicable
Contract/Agreement (w/exhibits if applicable)
(Signed in full by the City Attomey)
Not Applicable
Subleases, Third Party Agreements, etc.
(Approved as to form by City Attomey)
Not Applicable
Certificates of Insurance (Approved by the City Attomey)
Not Applicable
Financial Impact Statement (Unbudget, over $5,000)
Not Applicable
Bonds (If applicable)
Not Applicable
Staff Report (If applicable)
Not Applicable
Commission, Board or Committee Report (If applicable).
Not Applicable
I Find ings/Cond itions for Approval and/or Denial
Not Applicable
EXPLANATIOKfOk"MISSING ATTACHMENTS�'
REVIEWED',;,:
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Administrative Staff
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Assistant City Administrator (initial)
City Administrator (Initial)
City Clerk
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