Memorandum                    

City of Lawrence

City Manager’s Office

TO:	City Commission
FROM:	Diane Stoddard, Interim City Manager
DATE:	September 2, 2015
CC:	Casey Toomay, Assistant City Manager Bryan Kidney, Finance Director
RE:	Peaslee Tech Loan interest update

Background:

In March 2015, the City Commission approved a loan request from the Peaslee Tech to assist with renovation costs to the Dwyane Peaslee Technical Training Center space.  The request was for the City and County to loan up to $300,000 total for renovations associated with the Lawrence Workforce Center in the space. The term of the loan was a 10 year term with an interest rate equal to the average return of idle City and County funds, plus 1%. 

During discussions with Douglas County regarding setting up the loan, it was decided that setting up a simple amortization schedule with a set interest schedule would be easier for all involved, particularly since half of the funds for the loan came from the County and half from the City.  The interest rate has been set at 2.035%, which was determined by what the City would have received on a 10 year bond dated on the day of the loan. The amortization schedule is attached. 

Peaslee Tech has borrowed $143,294.50 from the City for the renovations. 

Requested action:

Set the interest rate on the renovation loan to Peaslee Tech at a rate of 2.035%.