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Home My WebLink AboutMINUTES - 05081990 - 1.55 TO: BOARD OF SUPERVISORS Contra FROM: Phil Batchelor, County Administrator .� Costa n. S �� •.:..;•:_: -- � County DATE: May 8 , 1990 �or�A co'uK cPv SUBJECT: REQUEST FOR SUBORDINATION AGREEMENT FROM SAN RAMON REDEVELOPMENT AGENCY SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: Authorize the County Administrator or his designee to sign the attached subordination agreement. FINANCIAL IMPACT: If the subordination of county pass through revenues is necessary, the funds will be repaid at a later date at an interest rate then being earned by the County Treasury, plus 2%. Based upon the bonding capacity being sought by the agency, the county pass through should occur as expected, with no financial impact. BACKGROUND: When the agreement on sharing of tax increment was reached with the San Ramon Redevelopment Agency in 1986, the County agreed to consider the issue of subordination at a later date. Subordination means that payments to the County would take second place to repaying bonded debt, if sufficient revenues are not available to do both. The agreement required that requests for subordination: "not be unreasonably withheld provided that the agency first demonstrates to their satisfaction agency' s anticipated ability to repay such indebtedness incurred for the project without demand being made on the payment due them under the terms of this agreement. " CONTINUED ON ATTACHMENT: X YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE 2 APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON MAY R APPROVED AS RECOMMENDED X OTHER VOTE OF SUPERVISORS Y I HEREBY CERTIFY THAT THIS IS A TRUE L UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. CC: County Counsel ATTESTED MAY 8 1990 City of Sari Ramon PHIL BATCHELOR,CLERK OF THE BOARD OF Sharon Anderson SUPERVISORS AND COUNTY ADMINISTRATOR M382 (10/88) BY a h"_Jzza"40 DEPUTY -2- This requirement has been met by agency, which has demonstrated that debt service will equal the net increment available to the agency after the County' s share has been considered. Based upon this demonstration, the recommended action is appropriate. Co u h ty Administrator Contra Board of Supervisors Tom Powers County Administration Building �OC�t1st District Costa 651 Pine Street, 11th Floor a Nancy C.Fanden Martinez,California 94553 �O��t�/ 2nd District (415)646-4080 �/ Robert I. Schroder Phil Batchelor es L 3rd District County Administrator.. Sunne Wright McPeak 4th District o — Tom Torlakson 5th District y May 8, 1990 William A. Lindsay, Treasurer San Ramon Redevelopment Agency 2222 Camino Ramon San Ramon, CA 94583 Re: Subordination Agreement Dear Mr. Lindsay: On behalf of the San Ramon Redevelopment Agency (the "Agency" ) , you have requested that Contra Costa County (which includes the Library District) (the "County) and the Flood Control District (the "Flood Control District" ) subordinate its right to receive payment under the "Agreement Concerning Tax Increment From San Ramon Redevelopment Project Area" (the "Agreement" ) dated December 16, 1986 , among the Agency, the County of Contra Costa, the Contra Costa County Library District and the Flood Control and Water Conservation District. Pursuant to Section 2 of the Agreement, the Agency may request the County, the Library District and the Flood Control District to subordinate their rights to payment under the Agreement to allow the Agency to pledge all or any portion of the tax increment revenue to secure long-term indebtedness incurred for the Project Area. You have informed the County and Flood Control District that the Agency is currently proceeding to borrow the aggregate principal amount not to exceed $8,545,000, pursuant to a Loan Agreement dated May 1, 1990, by and between the Agency and the San Ramon Public Financing Authority (the "Loan Agreement" ) . You have assured the County and Flood Control District that the Agency will have sufficient tax increment revenues from the redevelopment project area to pay its obligations under the Loan Agreement without demand being made on the payments otherwise due the County, the Library District and the Flood Control District under the Agreement. ' William A. Lindsay May 8, 1990 Page 2 By signature of an authorized representative of the Agency at the bottom of this letter, you agree that in the event that, as a result of this agreement to subordinate, the payments to the County and Flood Control District are reduced below the amount , otherwise payable pursuant to the Agreement, then such reductions shallbe treated as an advance by the County and Flood Control District which shall be repaid by the Agency. The unpaid principal balance thereof shall bear interest at the rate earned by the County Treasury, plus 2% at the time repayments are made. The advances and accrued interest shall be repaid as promptly as possible, and in any event Agency shall use all tax increment and any other funds available to it after payment of principal and interest on the bonds to which the subordination applies and payment of any other obligations which are superior to the Agency' s obligations under the agreement to repay such advances and accrued interest. This agreement to subordinate shall not have the effect of rendering the obligation to the County and Flood Control District inferior to any obligation other than the May 1 , 1990 Loan Agreement. In consideration of the foregoing, the undersigned on behalf of the County and Flood Control District hereby approves your request to subordinate the right of the County and Flood Control District to receive payments under the Agreement to the obligations of the Agency under the Loan Agreement. The approval of the request to subordinate shall not be effective unless, and until the County and Flood Control District receive a copy of this letter bearing the original signature of an authorized representative of the Agency approving the agreements contained herein. The signature below on behalf of the County and the Flood Control District shall bind Contra Costa County, the Contra Costa County Library District (which is not a separate legal entity but is part of the County) and the Contra Costa County Flood Control and Water Conservation District. Very truly yours, Contra Costa County Contra Costa County Flood Control and Water Conservation District By: The Agency has reviewed and approves the foregoing subordination agreement. Dated: San Ramon Redevelopment Agency By: