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Home My WebLink AboutMINUTES - 10191999 - C91 TO: BOARD OF SUPERVISORS CONT RA FROM: Phil Batchelor f p_` COSTA County Administrator COUNTY DATE- OCTOBER 19, '1999 SUBJECT. Subordination of Revenues for City of Pittsburg SPECIFIC REQUEST($)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION APPROVE agreement subordinating revenues due to the County, Fire, Library and Flood Control Districts for tax allocation bonds, pursuant to July 20, 1993 ',agreement with the Pittsburg Redevelopment Agency, APPROVE amendments to that agreement; and 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 RECC'3MMEI'DATI0N(S): On July 20, 1993, the County approved a redevelopment pass throughagreement with the PittsburgRedevelopment 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 band holders, as added assurance to bond holders that their investment will be returned', The County agreed to this provision basest upon the commitment that the agency would have on hand adequate funds to pay back bond folders thereby minimizing the real risk that subordination would' be necessary, CONTINUED ON ATTACHMENT- --YES SIGNATURE: ---� �— _ RECOMMENDATION of COUNTY ADMINISTRATOR—RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S); ACTION of BOARD ON October 19 , 1999 APPROVED AS RECOMMENDED OTHER VOTE of SUPERVISORS I HEREBY CERTIFY THAT THIS IS A X UNANIMOUS(ABSENT TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ASSENT: ABSTAIN: ON MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN. Contact: Tony Enna,5-1094 CC: CAO ATTESTED October 1.9, 1999 lim Kennedy,Redevelopment PHIL BATCHELOR;CLERK OF City of Pittsburg THE BOARD OF UPERVISO County Counsel ANIS NTY €3IN# T Rre District I HeaMh Services Department BY EPUTY 3 The County approved a prier subordination agreements with the Agency in February 1991 and Junes 1996. This request would assist the agency to refinance not more than 35 million in bonds at a lower cost. 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. _....... _. ....... ........ . ...- ._..._._.. _....._. ........ ........ .......... ......... ......... ........... ........ ......... AGREEMENT AUTHORIZING THE SUBORDINATION OF REVENUES RELATED TO TAX ALLOCATION BONDS AND AMENDMENT OF FISCAL AGREEMENT Effective October 19, 1999 WHEREAS, the Redevelopment Agency of the city of Pittsburg(the "Agency")and the County of Contra Costa, including the Contra Costa County Library District(the "County"), the Contra Costa County Consolidated Fire Protection District(formerly Riverview Fire Protection District) (the "Fire District") and the Contra Costa County Flood Control and Mater Conservation District(the "Flood Control District" and collectively with the County and the Fire District, the "Taxing Agencies")previously entered into a fiscal agreement, dated July 20,1993, as amended by and agreement among saidd parties effective June 18, 1996 (the "Agreement"), regarding the pass-through of tax increment pursuant to California Health& Safety Code Section 33401, which provides for, among other matters, the allocation and payment of certain Tax Increment Revenue (as defined in the Agreement) forma the Agency's Project.Area (as defined in the Agreement) to the County; WHEREAS, the Agreement further contemplates that the Taxing Agencies may agree to subordinate,under certain conditions, their rights to such Tax Increment Revenue in order for the Agency to pledge such Tax Increment Revenue to Long-Term Indebtedness or Refunding Indebtedness (both as defined in the Agreement)to be incurred by the Agency and the Agency and the Taxing Agencies have from time to time agreed to the subordination of their tax Increment Revenue payments under the Agreement with respect to certain identified tax allocation bonds issued by the Agency; WHEREAS, in furtherance of the Amended flan(as defined in the Agreement), the Agency intends to issue Long-Terra Indebtedness to be'_known as its Los Medanos Community Development Project Tax Allocation Bonds, Series 1999, in an aggregate principal amount not to exceed $35,000,000 (the "Bonds"), to finance certain activities of the Agency, and has requested that the Taxing Agencies agree to subordinate their Tax Increment Revenue payments under the Agreement in order for the Agency to pledge such Tax Increment Revue to the Bonds and to finance such activities and to achieve such debt service savings; and WHEREAS, pursuant to Section 2.8 (b)(ii) of the Agreement, the Agency has provided the County with a report dated September 30, 1999, which includes revenue forecasts and a debt service schedule relating to the Bonds(the "Report"), showing that the Agency's anticipated ability to repay the Bonds can be made without demand being made on the aforementioned payments due to the'faxing Agencies under the Agreement. The Report shows that the aggregate of the Tax Increment Revenue payments to be subordinated are used in the cash-flow relating to the Bonds, and are contemplated to be used by the Agency, only for additional security in the form of debt service coverage and that the Agency's tax increment revenues will be adequate, over the term of the Bonds, to pay one hundred percent(100%) of the actual debt service on the Bonds and on any other Long-Tenn Indebtedness or Refunding,.Indebtedness of the Agency and to pay the Agency's obligations under the Agreement, and any other obligations of the Agency,whether statutory or contractual, which are or would be superior to thew Agency's obligations under the Agreement. NOW, THEREFORE, the parties agree as follows: Section 1.. The Taxing Agencies, pursuant to Section 2.$ of the Agreement, hereby subordinate their rights to receive tax increment revenue payments under Sections 2.8(b)(i) and (ii), respectively, or the Agreement, in order to allow the Agency to pledge such tax increment revenue to the proposed Long-Terre.Indebtedness to be incurred by the Agency. This agreement to subordinate relates to the following proposed Long-Term Indebtedness of the Agency, as more particularly set forth in the Report submitted to the Tying Agencies: (a) The principal amount of the bonds to be sold shall not exceed $35,000,000. (b) the Agency shall issue the bonds on or before January 31, 2000. Section 2. In accordance with Section 2.8 of the Agreement, in the event that payments to the Taxing Agencies 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 Taxing Agencies and repaid by the Agency in accordance with the Agreement. Section The Agency agrees to expend the proceeds of the bonded indebtedness in furtherance of the Amended Plan. COUNTY: AGENCY: COUNTY OF CONTRA COSTA REDEVELOPMENT AGENCY OF CONTRA COSTA COUNTY THE CITY OF'PITTSBURG LIBRARY DISTRICT CONTRA COSTA COUNTY By: CONSOLIDATED FIRE Executive Director PROTECTIONI)I TRICT F CO DISTRICT fi 1S.vfd h' C 'r, Boa cf Supervisors ATTEST: PHIL BATCHELOR CLERK OF THE BOARD OF SUPERVISORS ANIS CO 'QTY=R DIST R By, 7_ Clerk Approved as to Form: VICTOR J. WESTMAN, COUNTY COUNSEL, 1/yo !clsuty