Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Personnel Compensation Housing topic
No spam. Unsubscribe anytime.
Council approves loan option to help city manager purchase home
Summary
The council authorized a loan of up to $650,000 to help City Manager Ben Bitter purchase a home, using a fixed interest rate set as the city’s investment rate of return plus 0.5 percentage point.
Maricopa City Council — The council voted to authorize a loan instrument not to exceed $650,000 to assist City Manager Ben Bitter with a home purchase, council members said during discussion of agenda item 7.5.
Councilmember Wade asked that the item be pulled from the consent agenda for public discussion. City staff and the city manager explained the item implements terms anticipated in the city manager’s employment agreement to address the difference between mortgage market conditions and the manager’s existing home purchase in Queen Creek. Staff said options considered included a city-funded loan, buying down points on a private mortgage, or other mutually agreeable arrangements; analysis showed use of the city’s internal investment rate plus one-half percent was more cost-effective than buying down points in the current market.
City staff reported the city’s FY23 one‑year rate of return on investments was 2.88%; adding one-half percent yields a 3.38% rate for the loan. Staff also noted longer-term average returns (five-year and all-time) are lower, reinforcing that direct financing at the cited rate is beneficial for the city compared with market point-buydowns. The council discussed the requirement that the city manager live in the community and the importance of transparency; one council member said the council had previously made residency a condition of employment and supported moving forward to enable the manager’s relocation.
A motion to adopt the authorization passed on a council vote (recorded as “Aye”); the record shows the council directed staff to finalize promissory note and deed of trust documents as approved by the city attorney’s office and to allow the manager to finalize a purchase when ready.
Council members who spoke emphasized the employment agreement’s terms authorizing negotiations on housing assistance and said the chosen approach was consistent with that agreement. The council did not disclose loan closing details during the public meeting; the authorization caps the loan at $650,000, to be repaid over 30 years with a fixed annual interest rate computed as the city’s investment rate of return plus 0.5 percentage point.
