The URL can be used to link to this page

Home My WebLink AboutMINUTES - 02061996 - C97 Iry• SON... TO: BOARD OF SUPERVISORS )f ;o . t Is O. a FROM: Phil Batchelor, County Administrator County DATE: February 6, 1996 s'A'COUK SUBJECT: Subordination of Revenues for City of San Pablo SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATION 1: APPROVE agreement subordinating revenues due to the County, Library and Flood Control District for tax allocation bonds, pursuant to the 1987 agreement with the San Pablo Redevelopment Agency. AUTHORIZE execution of Agreement by Board Chair. BACKGROUND/REASON($) FOR RECOMMENDATION(S): On September 8, 1987, the County approved a redevelopment pass through agreement with the San Pablo 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 on hand adequate funds to pay back bond holders, thereby minimizing the real risk that subordination would be necessary. The County approved a prior subordination agreement with the agency in 1990. This request would assist the agency to refinance $5 million in existing 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 1987 agreement. CONTINUED ON ATTACHMENT: —YES SIGNATURE: do(�� Er'j_� _RECOMMENDATION OF COUNTY ADMINISTRATOR_RECOMMEN ATION OF BbARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON - 9 APPROVED AS RECOMMENDED J OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A UNANIMOUS(ABSENT 1 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: y ATTESTED (o PHIL BATCHELOR, ERI OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR cc: CAO Jim Kennedy,Redevelopment City of San Pablo County Counsel BY PUTY SUBORDINATION AGREEMENT This Subordination Agreement, dated as of the first day of February, 1996 (this "Subordination Agreement"), is entered into by and among the Redevelopment Agency of the City of San Pablo (the "Agency") and the County of Contra Costa, the Contra Costa County Library District, the Contra Costa County Flood Control and Water Conservation District and the West County Fire Protection District (collectively referred to herein as the "Taxing Agencies"). RECITALS The Agency and the Taxing Agencies, together with the City of San Pablo, previously entered into an agreement, dated September 8, 1987 (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 from the Agency's Merger Project Area (as defined in the Agreement) to the Taxing Agencies. 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 bonded indebtedness to be incurred by the Agency, and the Taxing Agencies have from time to time agreed to the subordination of their respective tax increment revenue payments under the Agreement with respect to certain identified tax allocation bonds issued by the Agency. In furtherance of the Redevelopment Plans, as modified by the Merger Plan Amendments (as respectively defined in the Agreement), the Agency intends to issue its Merged Project Area Subordinate Tax Allocation Refunding Bonds, Series 1996A, in an aggregate principal amount not to exceed $5,500,000 (the "Bonds"), to refinance certain of the Agency's outstanding indebtedness and achieve debt service savings due to lower interest rates, 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 revenue to the Bonds and to achieve such debt service savings and secure municipal bond insurance for the Bonds. The Agency has provided the Taxing Agencies with a report, 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 Taxing Agencies 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 relating to the Bonds only for additional security (debt service coverage) and that the Agency's tax incremental revenues will be adequate, over the term of the Bonds, to pay one hundred percent (100%) of the actual debt service thereon and to pay the Agency's obligations under the Agreement, and SF2-53989.2 any other obligations of the Agency, whether statutory or contractual, which are or would be superior to the Agency's obligations under the Agreement. AGREEMENT The parties hereto agree as follows: 1. The Taxing Agencies, pursuant to Section 2 of the Agreement, hereby subordinate their rights to receive tax increment revenue payments under the Agreement, in order to allow the Agency to pledge such tax increment revenue to the Bonds (and any refunding obligations hereafter issued to refund the Bonds). 2. In accordance with Section 2, in the event that payments to the Taxing Agencies made pursuant thereto are reduced below the amount otherwise payable to them under the Agreement as a result of such subordination, then such reduction shall be treated as an advance by the Taxing Agencies and shall be repaid by the Agency in accordance with the Agreement. 3. The Agency agrees to expend the proceeds of the Bonds in furtherance of its Redevelopment Plans, as modified by the Merger Plan Amendments. [Remainder of page intentionally left blank.] SF2-53989.2 2 97 COUNTY: AGENCY: COUNTY OF CONTRA COSTA REDEVELOPMENT AGENCY OF THE CITY OF SAN PABLO Contra Costa County Library District Contra Costa County Flood Control and Water Conservation By: District ecutive Director West County Fire Protection District By: C son Board of Supervisors Attest: PHIL BATCHELOR CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR By: D ty Clerk Approved as to form: VICTOR J. WESTMAN COUNTY COUNSEL Deput SF2-53989.2 3 ERRICK, HERRINGTON & SUTCLIFFE January 18, 1996 0 Q Direct Dial (415) 773-5509 VIA FEDERAL EXPRESS '; : 4 9199�v� 12 �p,�tAGE Anthony Enea a�Pablo ) Senior Deputy City Administrator Cid 01 S County Administrator's Office County of Contra Costa ® ca 651 Pine Street, Tenth Floor Martinez, California 94553 Re: Redevelopment Agency of the City of San Pablo Merged Project Area Subordinate Tax Allocation Refunding Bonds, Series 1996A Dear Mr. Enea: Please find enclosed a form of the proposed Subordination Agreement, among the Redevelopment Agency of the City of San Pablo, the County of Contra Costa, the Contra Costa County Library District, the Contra Costa County Flood Control and Water Conservation District and the West County Fire Protection District (the "Agreement"), prepared in connection with the above-referenced financing (as discussed in Mark Curran's letter of January 3, 1996). Do not hesitate to contact John Knox or me with any comments or questions you may have with respect to the Agreement. Very truly yours, Ana Marie del Rio Enclosures cc: Rory Robinson Mark Curran John Knox Old Federal Reserve Bank Building • 400 Sansome Street San Francisco,California 94111-3143 Telephone 415 392 1122 • Facsimile 415 773 5759 Los Angeles • New York • Sacramento • Silicon Valley • Washington, D.C. ■ ■ g ��N�MPN�p�o l tO: Rory Robinson, City Manager City of San Pablo from: Tony Enea Senior Deputy County Administrator re: Subordination Agreements date: January 24, 1996 Please sign the three attached subordination agreements and return all three to me no later than February 5. We intend to have our Board adopt the agreement on February 6. We will send you an original agreement back after our chair signs. Attachments From the desk of... Tony Enea Senior Deputy County Administrator Contra Costa County 651 Pine St., 10th Floor Martinez,CA 94553 tel: (510)646-4094 fax: (510)646-1353