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HomeMy WebLinkAboutMINUTES - 05181999 - C98 TO: BOARD OF SUPERVISORS CONTRA FROM: Phil Batchelor - 1 - COSTA County Administrator COUNTY DATE: MAY 18, 1999 SUBJECT: SUBORDINATION OF REVENUES FOR CITY OF SAN PABLO SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS: 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: 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 up to $12,500,000 in existing bonds at a lower cost and issue up to $8,500,000 in new bonds. The agency has provided documents to staff which demonstrate that an 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: ly RECOMMENDATION OF COUNTY ADMINISTRATOR®RECOMMENDATION OF 816ARD COMMITTEE Ir APPROVE ®OTHER SIGNATURE(S): ACTION OF BOARD ON Y s APPROVED AS RECOMMENDED X OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A X UNANIMOUS(ABSENT I 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(5-1094) CC: County Administrator ATTESTED May 18, 1999 J?m Kennedy,Redevelcprnent PHIL BATCHELOR,CLERK OF City of San Pablo THE BOARDF SUPERVISORS County Counsei AN UNTtDMINIS OR ( s !S BY 11 At EPUTY ORR ICK SF 4157734247 P 02/04 OH&S DRAIFT 3/16199 SL7BORDLN- ATION AG1XFMENT This Subordination Agreement,dated as of 1999(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 Mood Control and Mater Conservations District and the i?ir'est County I-ire Protection District(collectively referred to herein as the"Taking 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 father 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-terra 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. Jr. fUrtherauce of the Redevelopment Plans, as modified by the Merger Plan Amendments(as respectively defined in the Agreement),the Agency intends to issue its Tenth Township Redcvelopment:roject Tax Allocation Bonds,in one or more series from time to time,in an aggregate principal amount not to exceed$21,000,000(the":bonds"),of which no more than$12,500,000 will be issued to refund all or any portion of the Agency's outstanding Merger Arca Redevelopment Project Tax Allocation Bonds, Series 1990 and no more than $8,500,000 ofwbdch will be issued to finance the Agency's Tenth Township Redevelopment Project. The Agency etas requested that the Taking 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 Bands 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 Bands(the"Report,"),showing that the Agcncys 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 sof the Bands,to pay one hundred percent(100%)of the actual debt service thereon and to pay the Agency's obligations under the Agreement, and any other obligations of the Agency,whether DOMM.,3 40i 38x9�MCS 4IAR-15- 1999 i5:SS CPR.CK SF 4157734247 P.03/04 statutory or contractual,which are or would be superior to the Agency's obligations under the Agreement. AGREEMENT The parties hereto agree as follows: I. 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 the proceeds of which,excluding costs of issuance and bond reserves,are used to rei zd the Bands), 2. Tn accordance with Section 2,in the event that payments to the'Tang Agencies made pursuant thereto are reduced below tlae 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. I The.Agency agrees to expend the proceeds of the Bonds in fiartherance of its Rodevelopzrment Plans,as modified by the Merger Plan Amendments. [Remainder of page intentionally left blank.] D«C">SFi:311193.3 40113E-34 MCI MRk -? - 15,56 2 PTCK 4157734247 P.04/04 COUNTY- AGENCY: COUNTY OF CONTRA COSTA PkEDEVELOPMENT AGENCY OF THE CITY OF SAN PABLO Contra Costa County Library District Contra Costa County Flood Control and Water Conservation By: District Executive Director 'Vest County Fire Protection District By: Chairperson Board of Supervisors Attest: PHIL BATCHELOR CLERK OF THE BOARD OF SUPERVISORS S ANIS COUNT TY ADMINISTRATOR By: Deputy Clerk Approved as to form: VICTOR,1. WESTMAN CO TY COU SEL By: Deputy >�eaerss�::at t�v� 40138•i4 MC2 3 TC-1 AL P,04