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464 impacts on the District, mitigation measures could be incorporated into the project to reduce the impacts. Since specific project information is not available at this time, it is too speculative to evaluate potential environmental effects on the Dlstric[ due to additional development within the Project Area. The tax increment set-aside.revenues .may be ..u.sed to subsidize existing rents throughout the City, rehablhtate existing dwelling units, and may be used to construct new low and moderate income housing. The City will prepare appropriate environmental analyses as required by CEQA at the time specific low and moderate income projects are proposed to the City. At this time, specific low and moderate income development projects have n. ot been identified. Therefore, it w. ould be. speculative to evaluate the potential impacts that may be associated with low and moderate income set-aside revenues. Ob_iection: The Committee also recommended that the Redevelopment Agency consider potential alternative funding sources to finance its projects. The Agency responded by describing various budget shortfalls which the City has suffered as a result of the poor economy. This response suggests that the redevelopment process is being used as a funding .source f.o.r.capital improvements, and not for the purpose of addressing conditions of blight within the Project Area. The courts and the Legislature have criticized the use of the powers of redevelopment solely for purposes of inducing new development to an area or for any purpose beyond remedying conditions of blight. Charact.e. rizing tax increment financing as merely an alternate funding source for the City's general fund and budgetary needs renders the Redevelop. ment Plan Amendment proposal subject to challenge as an inappropriate exercise of the powers of redevelopment. ~: The projects to be funded are projects which will help to alleviate blight in the Project Area w.hich is a lawfuluse of the powers of redevelopment. When looking for alternative funding sources beyond, tax increment, the Agency must look to the funds and powers of the City, ~ts legislative body. ~l'herefore, the Agency is jus. tified in discussing the City's budget and funding issues because..the finanoal .condition of the City is directly related to the Agency's ability to utilize financing sources other than tax increment. 9bjecti0.: The Committee recommended that the low and moderate ~ncome housing set-aside for the Project Area be limited to twenty percent (20%) of tax increment revenues for any increase of the tax increment cap above its current level of $109,875,000. Santa Aha Unified and the other taxing entities disagree that the sk. ty percent (60%) set-asid.e applies to plan amendments. SUch an interpretation greatly affects the ab!hty of the Agency to mitigate the impact of the amendment on the taxing entities. Also, the Plan and amendment does not restrict use of these funds for construction of residential dwelling units. The District is greatly concerned that this huge potential income source could be utilized at some point in the future to increase the City's housing stock and further overcrowd existing school facilities. 34