Morgan Hill’s new city attorney will receive a loan of up to $835,000 from public funds to help with the purchase of a home and property within the city limits.
City Attorney Donald Larkin and the five-member Morgan Hill City Council agreed back in May, when the two parties negotiated his employment contract, to offer such a loan if he chose to relocate his residence here. Since he was hired, Larkin has decided to move to Morgan Hill, according to Mayor Steve Tate.
As a result, the council June 22 unanimously approved the loan, which will bear interest at the 10-year U.S. Treasury rate, plus .25 percent. As of June 27, that interest rate was about 1.44 percent, bringing Larkin’s housing loan interest to about 1.69 percent.
According to the loan agreement, Larkin will pay principal and interest on 50 percent of the loan amount, and interest only for the remaining 50 percent. The entire balance is due to the city in 30 years, or within 12 months if Larkin becomes no longer employed by the City of Morgan Hill.
The loan will not close before Larkin begins his new job at City Hall July 11, according to Tate.
Councilmember Larry Carr noted the loan is a “better investment” than it would be if the funds were invested in the city’s investment portfolio. That portfolio generates about 1 percent interest for the city.
Funds for the loan will come from the city’s general fund reserve, which will see annual revenue of about $27,000 from Larkin’s principal and interest payments, according to a city staff report.
The council voted unanimously May 4 to hire Larkin as its new city attorney. He will replace former City Attorney Renee Gurza, who resigned from the position November 2015 after about 2.5 years on the job.
Larkin is an 18-year veteran of municipal law, most recently as Deputy County Counsel for Santa Clara County, with his primary assignment in the sheriff’s office. He has previously worked for Morgan Hill, as Acting Deputy City Attorney several years ago.
Larkin’s starting salary in Morgan Hill will be about $215,000.
The council has offered housing loans to its city manager and city attorney in previous years. In 2014, the council offered City Manager Steve Rymer a $950,000 loan to purchase a home, plus a $110,000 home improvement loan in 2015.
