1994-01 CRA - Laserfiche WebLink

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. c~.- . 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 risk. However, the affirma- tive vote of two-thirds of the people is required to issue such bonds. Due to the costs involved in such a bond issue, this type of financing is not feasible for the purpose of financing the construction of the Recreation Center or meeting the shortfall in funding for the Recreation Center. 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 maj ori ty vote. However, the Recreation Center will generate little, if any, revenue, making revenue bond financing infeasible. The city's general revenues are another possible source of revenue for construction of the Recreation Center. 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 government. Some of these sources simply have been commandeered by the-~tate. 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 explore alternative means of financing public facilities while maintaining an adequate level of vital services with its General Fund revenues. Tax increment revenues or tax allocation bond proceeds are the only viable method of making up the shortfall in funding for the construction of the Recreation Center. Tax increment revenues are allocated annually to the Agency to the extent of Agency indebtedness, and are paid from the portion of taxes in excess of the assessed valuation of the property within the Project Area in the base year of the project. Tax allocation bonds are payable from and secured solely by tax revenues to be derived from the Project Area and the use of such revenues is appropriate since the project Area will be benefitted. C. THE BLIGHTING CONDITION WITHIN THE PROJECT AREA THAT THE EXPENDITURE OF AGENCY FUNDS WILL HELP TO ELIMINATE A high crime rate that constitutes a serious threat to the public safety and welfare has been recognized by the Legisla- ture as an economic condition that causes blight. Health and Safety Code § 33031(b) (5). The construction of the Recreation Center and the greater utilization of the Park that is expected to 4 3 18