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RESOLUT O 94-038 109 EXHIBIT elimination of blighting conditions on properties within two blocks of the boundary of the South Main Project Area. The proximity of the Properties to the south Main Project Area also makes it possible for .persons patronizing businesses in the South Main Project Area to park in parking facilities in the Central City Project Area. Therefore, the increased availability of parking near the South Main Project Area will also be of benefit to the South Main Project Area. B. NO QTHER REASONABLE MEANS OF FINANCING THE PUBLIC FACILITIES AND IMPROVEMENTS IS AVAILABLE TO THE COMMUNITy If the funds were available, the acquisition and rehabil- itation of the Properties could be funded with tax increment revenues or other funds generated from the Central City Project Area. However, due to the fact that all tax increment revenues from the Central City Project Area have been pledged to repay tax allocation bonds, sufficient funds are not currently auailable. The City itself is not in a position to finance the acquisition and rehabilitation of the properties from any source of funds. In California, municipal or tax-exempt financing has traditionally taken one of two basic forms: general obligation bonds or revenue bonds. General obligation bonds pledge ad valorem property taxes without limit as to rate or amount; hence they were highly regarded by investors.and commanded the lowest borrowing rate because of their minimal credit ~isk. However, the affirma- tive vote ~f two-thirds of the people is required to issue such bonds. Dud to the costs involved~in such a b~nd issue, this type of financing is not feasible for the acquisition and rehabilitation of the Properties. Revenue bonds are payable from a specific revenue source other than property taxes. These bonds have been used extensively for financing water, sewer, or other utility systems, toll bridges and airports, where revenues of the enterprises are reasonably well assured. Issuance of conventional revenue bonds generally requires a simple majority vote. However, the Properties are not expected to generate sufficient revenue to support a revenue bond issue. The City's general revenues are another possible source of revenue for funding the acquisition and rehabilitation of the Properties. However, since the passage of Proposition 13, severe strains have been placed on the city's revenues. Most devastating of the causes for revenue curtailment has been the withholding from cities by the State' of California of revenues traditionally subvented to local ~overnment. Some of these sources simply have been commandeered by the State. Other sources of subvented revenues have been withheld on an allegedly temporary basis, but there is no certainty that the reduction of the subvention stream might not be permanent. The fact of diminished revenue, and the need to provide a suitable level of services, dictate that the City 5