HomeMy WebLinkAboutMINUTES - 01202004 - C41 TO: BOARD OF SUPERVISORS s Contra
FROM. JOHN SWEETEN,
Costa
County Administrator ' s+ ,
DATE: January 2C?, 2004 al
ty
71
SUBJECT: Subordination of Revenues for San Pablo Redevelopment Agency
Bond Issuance
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATI014.
APPROVE second amendment to the Subordination Agreement, dated June 1, 1999, between the
San Pablo Redevelopment Agency and the County of Contra Costa including the Library, the Contra
Costa County Flood Control and Water Conservation District, and the Contra Costa County Fire
Protection District (Taxing Agencies), to provide for the subordination of additional tax increment'
revenue payments and the statutory pass-throughs by the Taxing Agencies, in order for the San
Pablo Redevelopment Agency to pledge such tax increment revenue to the Series 2004 Tenth
Township Bonds and the Series 2004 Legacy Bonds; and AUTHORIZE execution of Agreement by
Board Chair. (Attachment A.)
FINANCIAL IMPACT:
Based on staff'analysis of the financial projections, the San Pablo 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:
On September 8, 1987, the County approved a redevelopment pass-through agreement (the
"Agreement") with the San Pablo Redevelopment Agency. On June 1, 9999,the County entered into
a Subordination Agreement with the San Pablo Redevelopment Agency. The Subordination
Agreement essentially allowed the Agency to put pass-through amounts owed to the County and
other taxing agencies lower in priority than debt owed to band holders as added security to bond
holders that their investment will be returned. It allowed the Agency to pledge such tax increment;
revenue in one or more series, in an aggregate principal amount not to exceed $21,000,000. 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, and that the City would demonstrate that they have adequate funds prior to subordination.
CONTINUED ON ATTACHMENT: X YES SIGNATURE: _ I
RECOMMENDATION OF COUNTY ADMINISTRATOR _ RECOMMEND ION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ONZ4 APPROVED AS RECOMMENDED OTHER
f,.
VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT
1121 COPY OF AN ACTION TAKEN AND ENTERED ON MINUTES OF
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UNANIMOUS(ABSENT Z fr ? THE BOARD OF SUPERVISORS ON THE DATE SHOWN.
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AYES: NOES:
ABSENT: ABSTAIN:
Contact:
Cc: GAO's Office ATTESTEDf
County counsel JOHN SWEETEN,CLE OF THE BOA D OFSUPERV SORS
City of San Pablo i
Jim Kennedy,Redevelopment
BY: %f Ila—kl c DEPUTY
San Pablo RDA Subordination 2004--January 13, 24014
On december 19, 2000, the County approved a first amendment to the Subordination Agreement to
provide for the subordination of additional tax increment revenue payments in order for the Agency to
pledge such tax increment revenue to the Series 2000 Tenth Township Bonds and the Series 2000
Legacy Bonds.
The San Pablo Redevelopment Agency now intends to refund the currently refundable portion of the
1993 Bonds ($13,010,000) and issue additional new bonds for new projects. The new money
component for the Tenth Township area will be $20,605,000 with an escrow component of
$17,690,000 which will not be released unless tax increment revenues increase in the coming years
so that debt service coverage after the release is 125% and projected revenues are sufficient to meet
all Agency obligations. New bonds for the legacy Project Area will be issued in the amount of
$4,235,000.
The Agency has provided the County with a report (Attachment B), which includes revenue forecasts
and a debt service schedule relating to all of the Agency's currently outstanding bonds with respect to
the Tenth Township Redevelopment Project, the Legacy Project, the Series 2004 Tenth Township
Bonds and the Series 2004 Legacy Bonds, showing that the Agency's anticipated ability to repay
such bonds can be made without demand being made on the aforementioned payments due to the
Taxing Agencies under the Agreement and without impairing the Agency's ability to pay the Statutory
Pass-Throughs.
The Report shows that the aggregate of the tax increment revenue payments to be subordinated are
contemplated to be used in the cash-flow relating to such bonds only for additional security (debt
service coverage) and that the Agency's tax incremental revenues will be adequate, over the term of
such bonds, to pay one hundred percent(100%) of the actual debt service thereon and to pay the
Agency's obligations under the Agreement and the Statutory Pass-Throughs, 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 or the Statutory Pass-Throughs.
Based on a review by staff of the County Administrator's Office of the revenue projections prepared
by US Bancorp Piper Jaffray Inc., staff recommends approval of the subordination request.
In the unlikely event that subordination is required, the Agreement indicates that any reduction in
payment will be treated as an advance by the Taxing Agencies and repaid by the Agency.