Attachment 2
INTERFUND LOAN AGREEMENT
This Loan Agreement (“Agreement”) is executed as of March 01, 2022 (“Effective Date”), between the City of Gonzales Water Enterprise Fund (“Lender”) and the City of Gonzales SB1 Gas Tax Fund (“Borrower”). Lender agrees to lend Borrower, and Borrower agrees to repay Lender, an amount not to exceed the Principal Amount and interest accrued on the unpaid loan balance, in accordance with the following:
1. Purpose of the Loan. To provide funds to Borrower for use for a portion of the cost of the Gloria/Iverson/Johnson Canyon Road Project.
2. Principal Loan Amount. Not to exceed $567,410. The loan will be recorded as receivable to the Lender and payable to the Borrower.
3. Term of the Loan. The term of this loan shall be five (5) years, beginning on the Effective Date, and shall be repaid in full as of June 30, 2027.
4. Scheduled Payments. Borrower shall make payments annually against principal and interest.
The first payment shall commence on the date that is one year from the Effective Date of this Agreement. At a minimum, each annual scheduled payment shall equal the amount of any accrued interest through the date of payment, plus a principal payment equal to one-fifth (1/5) of the original principal amount. Current estimates indicate an annual payment of $114,430.19, principal and interest. Payments will be credited first to interest then due, and then to principal.
Borrower may make partial or complete payment of principal and earned interest at any time before its due date and without any prepayment penalty.
5. Rate of Interest. Interest shall accrue at a rate equal to .278%, calculated and accrued in the same manner that the City would otherwise earn interest on funds on deposit in the Local Agency Investment Fund (“LAIF”). The City’s LAIF interest rate as of the Effective Date of this note is .278%. Loan interest will be recorded as revenue to the Lender and expenditure to the Borrower.
6. General Provisions. This Agreement constitutes the full Agreement by and between the parties and no other representations have been made regarding the content of this Agreement.
This Agreement shall not be amended, modified, or altered in any respect unless such amendment, modification, or alteration has been reduced to writing and executed by both parties.
LENDER BORROWER
Gonzales Water Enterprise Fund SB1 Gas Tax Fund
___________________________ ___________________________ Rene Mendez, City Manager Rene Mendez, City Manager
City of Gonzales City of Gonzales