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HomeMy WebLinkAboutMINUTES - 10261993 - 1.4 (3) TO: BOARD OF SUPERVISORS -/ Contra o: tillath f s FROM: Phil Batchelor "-_ 'Ccs ..- -k County Administrator - -�� County ��sra DATE: October 26, 1993 SUBJECT: Subordination of Redevelopment Pass Through for City of Pittsburg SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATION(S): APPROVE Agreement subordinating revenues due to the County, Library, Fire District and Flood Control District for tax allocation bonds, pursuant to July 20, 1993 agreement with the Pittsburg Redevelopment Agency. AUTHORIZE execution of Agreement by Board Chair. FINANCIAL IMPLICATIONS: It is expected that pass through of revenues will continue as originally agreed. The subordination agreement merely provides the Redevelopment Agency with added assurances for bond holders that agency debt will be replaced. BACKGROUND/REASON(S) FOR RECOMMENDATION(S): On July 20, 1993, the County approved a redevelopment pass through agreement with the Pittsburg Redevelopment Agency. The terms of the agreement were very favorable to County government agencies. CONTINUED ON ATTACHMENT: Y YES SIGNATURE: _RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD CO EE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON APPROVED AS RECOMMENDED OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A J UNANIMOUS (ABSENT � ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ABSENT: ABSTAIN: ON MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. Contact: ATTESTED OCT 2 6 1993 PHIL BATCHELOR,CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR cc: CAO Jim Kennedy, Redevelopment City of Pittsburg County Counsel DEPUTY h32:tepitcon.bos Af' 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 on hand adequate funds to pay back bond holders, thereby minimizing the real risk that subordination would be necessary. The agency has informed the County that in order to secure an investment grade bond rating or municipal bond issuance on the proposed Series 1993 issue of tax allocation bonds, it must require the County to subordinate its interest in certain tax increment revenues. The agency has provided documents to staff which demonstrate that adequate revenue commitment has been met. Therefore, it is appropriate to agree to the subordination as called for in the 1993 agreement. 2 AGREEMENT AUTHORIZING THE SUBORDINATION OF REVENUES RELATED TO TAX ALLOCATION BONDS Effective October 26 1993 NOW, THEREFORE, the parties agree as follows: 1. Contra Costa County (which includes the Library District), Riverview Fire Protection District and Contra Costa County Flood Control and Water Conservation District, pursuant to Section 2.8 of the fiscal Agreement, hereby subordinate their rights to receive tax increment revenue payments under paragraphs B (i) and (ii), respectively, of the Agreement, in order to allow the Agency to pledge such tax increment revenue to the proposed long term indebtedness to be incurred by the Agency. This agreement to subordinate relates to the following proposed indebtedness of the Agency, as more particularly set forth in the report submitted to the County: (a) The principal amount of the bonds to be sold shall not exceed $40,000,000. (b) The Agency shall issue the bonds by not later than December 31. 1993. 2. In accordance with Section 2 of the Agreement, in the event that payments to the County and Riverview Fire, Library and Flood Control Districts are reduced below the amount otherwise payable to them pursuant to the Agreement as a result of such subordination, then such reduction shall be treated as an advance by the County, Riverview Fire, Library and Flood Control Districts and repaid by the Agency in accordance with the Agreement. 3. The Agency agrees to expend the proceeds of the bonded indebtedness in furtherance of its redevelopment plan for the Project Area. COUNTY: AGENCY: COUNTY OF CONTRA COSTA REDEVELOPMENTAGENCYOF CONTRA COSTA COUNTY THE CI APITTSBUWR-GLIBRARY DISTRICT RIVERVIEW FIRE DISTRICT FLOOD CONTROL DISTRICT BEx By: /on /�� Chair, Board of Supervisors ATTEST: OCT 2 6 1993 PHIL BATCHELOR CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR By: Dety Clerk Approved as to Form: Victor J. Westman my Counsel Y h32:tepitt.con AGREEMENT AUTHORIZING THE SUBORDINATION OF REVENUES RELATED TO TAX ALLOCATION BONDS Effective October 26 , 1993 NOW, THEREFORE, the parties agree as follows: 1. Contra Costa County (which includes the Library District), Riverview Fire Protection District and Contra Costa County Flood Control and Water Conservation District, pursuant to Section 2.8 of the fiscal Agreement, hereby subordinate their rights to receive tax increment revenue payments under paragraphs B (i) and (ii), respectively, of the Agreement, in order to allow the Agency to pledge such tax increment revenue to the proposed long term indebtedness to be incurred by the Agency. This agreement to subordinate relates to the following proposed indebtedness of the Agency, as more particularly set forth in the report submitted to the County: (a) The principal amount of the bonds to be sold shall not exceed $40,000,000. (b) The Agency shall issue the bonds by not later than December 31. 1993. 2. In accordance with Section 2 of the Agreement, in the event that payments to the County and Riverview Fire, Library and Flood Control Districts are reduced below the amount otherwise payable to them pursuant to the Agreement as a result of such subordination, then such reduction shall be treated as an advance by the County, Riverview Fire, Library and Flood Control Districts and repaid by the Agency in accordance with the Agreement. 3. The Agency agrees to expend the proceeds of the bonded indebtedness in furtherance of its redevelopment plan for the Project Area. COUNTY: AGENCY: COUNTY OF CONTRA COSTA REDEVELOPMENT AGENCY OF CONTRA COSTA COUNTY THE CITY OF PITTSBURG LIBRARY DISTRICT RIVERVIEW FIRE DISTRICT FLOOD CONTROL DISTRICT By: Executive Director By: Chair, Board of Supervisors ATTEST: OCT 2 6 1993 PHIL BATCHELOR CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR By: De ty Clerk Approved as to Form: Victor J. Westman nt Counsel y: h323epitt.con