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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />OCTOBER 4, 2010 <br />TITLE: <br />PUBLIC HEARING - ORDINANCE <br />ELIMINATING DEADLINES FOR DEBT <br />INCURRED IN THREE REDEVELOPMENT <br />PROJECT AREAS <br />CITY MANAGER <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 loans, advances and <br />indebtedness to allow the Agency to incur debt up to the plan effectiveness deadlines for the <br />Central City, Inter City, and Bristol Project Areas. <br />DISCUSSION <br />In 2001, the California State legislature adopted SB211 which allows the City to amend a pre-1994 <br />redevelopment plan to eliminate the time limit on debt incurrence. The legislative body is required <br />to adopt a summary ordinance, which will allow the Redevelopment Agency to eliminate the time <br />limits to establish new loans, advances or indebtedness. Upon adoption of the ordinance, the <br />Agency will be required to pay the statutory pass through payments pursuant to Health & Safety <br />Code Section 33607.7 to each affected taxing entity with which the Redevelopment Agency does <br />not already have a pre-1994 pass through agreement. <br />In January of 2004, the debt incurrence deadlines for the North Harbor, South Harbor, and South <br />Main Project Areas were extended to the plan effectiveness dates which eliminated the limits on <br />debt establishment. At that time, it was determined that the financial impacts of the statutory pass <br />through payments for the Central City, Inter City, and Bristol Street Project Areas did not warrant <br />eliminating the debt incurrence limits. Staff has since been analyzing the benefits of a debt <br />restructuring to lower annual debt service obligations and create new cash flow to repay SERAF <br />borrowings. Such a refinancing would necessitate the elimination of time limits to incur debt in <br />Central City, Inter City, and Bristol. Should the debt refinancing not occur within a certain time <br />frame due to bond market conditions, then the proposed ordinance will not become effective and <br />there will be no additional financial obligation on the part of the Agency to the taxing entities. <br />Notice of this public hearing was published on September 24, 2010. <br />75C-1