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HomeMy WebLinkAboutMINUTES - 06181996 - C61 TO: BOARD OF SUPERVISORS ,1 Its FROM: Phil Batchelor, County Administrator ,hbn� , p �a o� ' a DATE: June 18, 1996 ,:��k County SUBJECT: Subordination of Revenues for City of Pittsburg SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATION(S): 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 RECOMMENDATION(S): On July 20, 1993, the County approved a redevelopment pass through agreement with the Pittsburg 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. CONTINUED ON ATTACHMENT: —YES SIGNATURE: '2Tr �X `Z� RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDA ION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): RON Is *9 ACTION OF BOARD ON APPROVED AS RECOMMENDED_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:Tony Enea,646-4094 ATTESTED �1UUI JUN 18 1996 cc: CAO PHIL BATCHELOR,CLERK OF Jim Kennedy,Redevelopment THE BOARD OF SUPERVISORS City of Pittsburg AND COUNTY ADMINISTRATOR County Counsel p" Fire District Health Services Department B PUTY Cbl The County approved a prior subordination agreement with the agency in February 1991. This request would assist the agency to refinance not more than $20 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. Additionally, this agreement amends provisions of the 1993 agreement, increasing funding to the Fire District from $3 million to $3.3 million and extending the payment period three years from April 1996 to April 1999. Finally, this agreement extends the payment period for $2 million in payments to the Health Services Department for improving health facilities within the City of Pittsburg. 2 AGREEMENT AUTHORIZING THE SUBORDINATION OF REVENUES RELATED TO TAX ALLOCATION BONDS AND AMENDMENT OF FISCAL AGREEMENT Effective June 18, 1996 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 Water 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 (the "1993 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 1993 Agreement) from the Agency's Project Area (as defined in the 1993 Agreement)to the County; WHEREAS,the 1993 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 1993 Agreement) to be incurred by the Agency and the Taxing Agencies have from time to time agreed to the subordination of their Tax Increment Revenue payments under the 1993 Agreement with respect to certain identified tax allocation bonds issued by the Agency; WHEREAS,in furtherance of the Amended Plan(as defined in the 1993 Agreement), the Agency intends to issue Long-Term Indebtedness and/or Refunding Indebtedness to be known as its Los Medanos Community Development Project Subordinated Tax Allocation Bonds, Series 1996, in an aggregate principal amount not to exceed $20,000,000 (the "Bonds"),to finance certain activities of the Agency and 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 1993 Agreement in order for the Agency to pledge such Tax Increment Revenue 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 1993 Agreement,the Agency has provided the County with a report dated January 10, 1996,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 1993 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-Term Indebtedness or Refunding Indebtedness of the Agency and to pay the Agency's obligations under the 1993 Agreement, and any other obligations of the Agency,whether statutory or contractual,which are or would be superior to the Agency's obligations under the 1993 Agreement. NOW, THEREFORE, the parties agree as follows: SECTION 1. The Taxing Agencies,pursuant to Section 2.8 of the 1993 Agreement, hereby subordinate their rights to receive tax increment revenue payments under Sections 2.8(b)(I) and (ii), respectively, of the 1993 Agreement, in order to allow the Agency to pledge such tax increment revenue to the proposed Long-Term Indebtedness and/or Refunding Indebtedness to be incurred by the Agency. This agreement to subordinate relates to the following proposed Long-Term Indebtedness and/or Refunding Indebtedness of the Agency, as more particularly set forth in the Report submitted to the Taxing Agencies: (a) The principal amount of the bonds to be sold shall not exceed $20,000,000. (b) The Agency shall issue the bonds on or before December 31, 1997. 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 1993 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 1993 Agreement. SECTION 3. The Agency agrees to expend the proceeds of the bonded indebtedness in furtherance of the Amended Plan. SECTION 4. The Agency agrees to make available funds in the amount of $3,000,000 for new or relocated fire protection facilities, fire protection equipment and increased fire protection and prevention services in the City of Pittsburg(the "City"). The Agency and the Fire District will jointly work on the site selection, acquisition, design, approval and implementation of these facilities and improvements to provide maximum benefit to the residents and businesses of the City. The priority for expenditure of these funds shall be as follows: (a) Construction and equipping of a new fire station, to be located in the southwest area of the City along either the Leland Boulevard or Bailey Road transportation corridors. (b) The relocation of one or both of the existing City fire stations to a more efficient site that may better serve the residents and businesses of the City. © The improvement of the existing City fire station facilities and equipment to better provide fire protection services in the City. (d) The improvement of fire protection services to the residents and businesses of the City. Assuming approval by both the Agency and the Fire District on the purpose of the expenditures, funding of the fire system improvements will be undertaken on the following schedule: April, 1997 $ 400,000 April, 1998 500,000 April, 1999 2.400,000 Total $3,300,000 SECTION 5. Section 3.1 of the 1993 Agreement is hereby amended and restated in its entirety as follows: "3.1 Health Clinic Project.The Agency agrees to work jointly with the County on the planning,design and implementation of capital improvements to or reconstruction of County health facilities located within the City or serving the residents of the City. The Agency agrees to fund said improvements up to a maximum of Two Million Dollars ($2,000,000). Funding for the health facilities improvements, including the planning and design,will be provided in the following maximum amounts and on the following dates: April, 1997 $ 300,000 April, 1998 300,000 April, 1999 1.400,000 TOTAL $2,000, 000 If all funds payable by the Agency pursuant to this Section are not expended by December 31,1999, the Agency will hold the remaining balance, up to the $2,000,000 maximum, in trust, to be used for future expenditures meeting the requirements of this Section". COUNTY: AGENCY: , COUNTY OF CONTRA COSTA REDEVELOPMENT AGENCY OF CONTRA COSTA COUNTY THE CITY OF PITI`SBURG LIBRARY DISTRICT CONTRA COSTA COUNTY CONSOLIDATED FIRE PROTECTION DISTRICT FLOOD CONT D STRICT By: !By: C", of Supervisors ATTEST: PHIL BATCHELOR CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR By: Dep Clerk Approved as to Form: Victor J. Westman County Counsel By: Deputy