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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />NOVEMBER 17, 2008 <br />TITLE: <br />PUBLIC HEARING - ORDINANCE <br />ELIMINATING DEADLINES FOR DEBT <br />INCURRED IN THREE REDEVELOPMENT <br />PROJECT AREAS <br />C Y MANAG R <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />^ As Recommended <br />^ As Amended <br />^ Ordinance on 1St Reading <br />^ Ordinance on 2"d Reading <br />^ Implementing Resolution <br />^ Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />Adopt an ordinance to eliminate the time limits on the establishment of <br />loans, advances and indebtedness to allow the Agency to incur debt up to <br />the plan effectiveness deadlines for the Central City, Inter City, and <br />Bristol Project areas. <br />DISCUSSION <br />In 2001, the California State legislature adopted SB211 which allows the <br />City to amend a pre-1994 redevelopment plan to eliminate the time limit <br />on debt incurrence. The legislative body is required to adopt a summary <br />ordinance, which will allow the Redevelopment Agency to eliminate the <br />time limits to establish new loans, advances or indebtedness. Upon <br />adoption of the ordinance, the Agency will be required to pay the <br />statutory pass through payments pursuant to Health & Safety Code Section <br />33607.7 to each affected taxing entity with which the Redevelopment <br />Agency does not already have a pre-1994 pass through agreement. <br />In January of 2004, the debt incurrence deadlines for the North Harbor, <br />South Harbor, and South Main Project areas were extended. At that time it <br />was determined that the financial impacts of the statutory pass through <br />payments for the Central City and Inter City Project areas did not <br />warrant extending the debt incurrence limits. Staff has since been <br />analyzing the benefits of a debt restructuring to lower annual debt <br />service obligations and raise new capital for eligible projects. Such a <br />refinancing would necessitate the extension of time limits to incur debt. <br />Should the debt refinancing not occur within a certain time frame due to <br />bond market conditions, then the proposed ordinance will not become <br />effective and there will be no additional financial obligation on the <br />part of the Agency to the taxing entities. Notice of this public hearing <br />was published on November 7, 2008. <br />75B-1 <br />