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Home My WebLink AboutMINUTES - 09212004 - C.67 ARD of SUPERVISORS Centra TO. Btu _ .; FROM: JOHN SWEETEN �; >>� � Caste County Administrator Irl COU1i County DATE: September 21 , 2004 licio SUBJECT: Subordination of Revenues for El Cerrito Redevelopment Agency Bond Issuance SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: APPROVE agreement subordinating revenues due to the County, Library and Mood Control Districts for tax allocation bonds, pursuant to December 21, 1993 fiscal agreement among said parties and the El Cerrito Redevelopment Agency; and AUTHORIZE execution of Agreement by Board Chair. (Attachment A.) FINANCIAL. IMPACT: Based on staff analysis of the financial projections (attachment B), the El Cerrito Redevelopment Agency should be able to pay its debt payments and the amounts required to be paid to the County and other affected taxing entities under the terms of pass-through agreements. BACKGROUND: In December 1993, the County approved a redevelopment pass-through agreement with the EI Cerrito Redevelopment Agency. Included in the agreement is a subordination clause which essentially allows the Agency to put debt owed to the County lower in priority than debt owed to bond holders, as added assurance to bond holders that their investment will be returned. The County agreed to this provision based upon the commitment that the Agency would have adequate funds to pay back bond holders, thereby minimizing the real risk that subordination would be necessary. This request would assist the Agency in issuing Tax Allocation Bonds (the "2904 Bonds") in the amount of$17,250,000 to fund eligible projects within the Agency's project area. The Agency has provided documents that demonstrate that the Agency will be able to meet its debt service requirements on the bonds, to be issued no later than December 31, 2004, and to pay the County its pass-through monies. Therefore, it is appropriate to agree to the subordination request as called for in the 1993 agreement. 7 CONTINUED ON ATTACHMENT: X YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMIT T —Tj-- APPROVE OTHER SIGNATURE(S}: ACTION OF BOARD ON I >y'f�` l.'s. APPROVED AS RECOMMENDED -'` OTHER z VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY OF AN ACTION TAKEN AND ENTERED ON MINUTES OF r° UNANIMOUS(ABSENT THE BOARD OF SUPERVISORS ON THE DATE SHOWN. cd� �..� } AYES: NOES: ABSENT: ABSTAIN: Contact: Cc: CAO's Office ATTESTED )` Count � � < s Y Counsel JOHN SWEETEN,CLERK OF THE BOARD OFSUPERVISORS City of El Cerrito Jim Kennedy,Redevelopment '` t• BY: ��- ;:�'��.,�...•€� s. ,DEPUTY pi SUBORDINATION AGREEMENT This Subordination Agreement, dated as of September_, 2004, is entered into by and among the El Cerrito Redevelopment Agency(the"Agency"), the County of Contra Costa, the Contra Costa County Library District and the Contra Costa County Flood Control and Water Conservation District(each individually and all collectively, the"County"). RECITALS The parties have entered into an agreement, dated as of December 21, 1993 (the "Agreement"),providing, among other matters, for the allocation and payment of certain tax increment revenues from the Agency's El Cerrito Redevelopment Project ("Project Area") to the County. The Agreement further provides that the County will subordinate, under certain conditions,their rights to such tax increment revenue payments in order for the Agency to pledge such tax increment revenue to long-term bonded indebtedness to be incurred by the Agency. In furtherance of the redevelopment plan for the Project Area, the Agency desires to issue long-term bonded indebtedness, and has requested that the County subordinate its rights to receive tax increment revenue payments under the Agreement, in order for the Agency to be able to pledge such tax increment revenue to such long-term bonded indebtedness. The Agency has provided the County with a report showing that the Agency's anticipated ability to repay such bonded indebtedness can be made without demand being made on the aforementioned payments due the County under the Agreement. The report shows that the aggregate of the tax increment revenue payments to be subordinated are contemplated to be used in the cash flow of the bonded indebtedness only for additional security(debt service coverage) and that the Agency's tax increment revenues will be adequate, over the term of the bonded indebtedness, to pay 100% of the actual debt service thereon and to pay the Agency's obligations under the Agreement, and any other obligations of the Agency, whether statutory or contractual, which are or would be superior to the Agency's obligations under the Agreement. The report includes revenue forecasts and a debt service schedule. NOW, THEREFORE, the parties agree as follows: 1. The County pursuant to Section 2.5 of the Agreement, hereby subordinate its rights to receive tax increment revenue payments under the Agreement, in order to allow the Agency to pledge such tax increment revenue to the proposed long-term indebtedness (and any refunding obligations hereafter issued to refund such indebtedness) to be incurred by the Agency. This agreement to subordinate related to the proposed indebtedness (and any refunding obligations hereafter issued to refund such indebtedness) of the Agency is further subject to the following conditions: a) The principal amount of the bonds to be sold shall not exceed $17,250,000. b) The Agency shall issue the bonds by not later than December 31, 2004. DaCssF r:770827.2 43046-2 JYw " if ' a'•'r. 2. In accordance with Section 2.5 of the Agreement, in the event that payments to the County are reduced below the amount otherwise payable to them pursuant to the Agreement as a result of such subordination, then such reductions shall be treated as advances by the County and repaid by the Agency in accordance with the Agreement 3. The Agency agrees to expend the proceeds of the bonded indebtedness finance and refinance redevelopment activities in furtherance of its redevelopment plan for the Projdct Area. -2- DOCSSF 1:770827.2 43046-2 JYW r. COUNTY OF CONTRA COSTA EL CERRITO REDEVELOPMENT AGENCY CONTRA COSTA COUNTY LIBRARY DISTRICT F CONTRA COSTA COUNTY FLOOD CONTROL By: AND WATER CONSERVATION 91STRICT gxe,cutive Director C j By: As •r Chairperson, Board of Supervisors ATTEST: JOHN SWEETEN CLERK.OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR By: �.di . Deputy Clerk Approved as to Form: Silvano B. Marchesi County Counsel j Ueputy -3- DOCSSF 1:770527.2 43046-2 3YW