1978-12 CRA - Laserfiche WebLink

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"1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 .. 23 .24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 .44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 865 66 67 68 69 70 71 72 73 74 75 'I Proof of Fobruary 16, 1978 SANTA ANA-7923 Bowne of San Francisco, Inc" 981-7882 GALLEY 13 - The Agency can neither predict whether or not the Initiative will be approved by the voters nor whether or not the validity of the initiative will, if thereafter challenged, be upheld, in whole or in part, by the courts. However, if approved by the voters and upheld by the courts, the measure could have a substantial adverse impact on the security of the Bonds in that the present tax rate of the various public entities which levy taxes in the Project area would almost certainly be substantially reduced and future increases in assessed valuation could be sub- stantially limited, thereby reducing the amount of Tax Revenues to be received by the Agency, Pending Litigation On August 22, 1977, a lawsuit (McNutt v, City of Los Angeles) was filed in the Superior Court of California for the County of Los Angeles against fifteen named cities in Los Angeles County and their redevelopment agencies and the Los Angeles County Auditor-Controller, Being located in Orange County, neither the City of Santa Ana nor the Community Redevelopment Agency of the City of Santa Ana are named in the lawsuit. The complaint alleges that the provisions of the Community Redevelopment Law authorizing the allo- cation of that portion of the property taxes derived from a redevelopment project area representing tax increment funds is invalid under the Constitutions of California and the United States" The complaint seeks a declaration that the statutory basis for tax incre- ment financing is unconstitutional and an injunction preventing any payment of tax-increment funds to defendant agencies, The complaint does not set forth specific facts involving each of the defendants. The Community Rodevelopment Law has been upheld by the Cali- fornia Supreme Court. However, as the case develops, it may be that no California court has dealt with the precise legal questions that may be involved, There- fore, the outcome of this litigation and any resulting effect upon the allocation of tax increment funds derived from a redevelopment project area for the payment of debt service on tax allocation bonds outstanding at the time of the final decision are not determinable at this time" However, to the extent that any future decision in this case may limit or prohibit the current method of allocation of such tax incre- ment funds, this security for the bonds may be adversely affected or substantially eliminated,