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AGREEMENTS RE INDEMNITY, WAIVER AND RELEASE February 17, 2015 Page 2 Three taxing entities, Santa Ana Unified School District, Orange Unified School District, and Rancho Santiago Community College District, have submitted demands to the Successor Agency for retro - active pass through payments resulting from the former Agency's adoption of a Senate Bill 211 Ordinance In 2010 to eliminate the time limit for incurring indebtedness for two component project areas; Santa Ana Central City Redevelopment Project Area and the Santa Ana Inter -City Commuter Station Redevelopment Project Area. The Agency acknowledged that its action triggered the Health and Safety Code 33607.7 requiring statutory pass- through payments to all affected taxing entities that did not previously have a contractual pass- through agreement in place with the Agency, and began making the statutory payments in Fiscal Year 2011 -12. Based on guidance from the County, legal counsel, and outside consultants, the Agency operated under the interpretation of the law that it was required to make these payments in the first fiscal year following the fiscal year in which the adjusted base year value is determined. As this adjusted base year value was determined in Fiscal Year 2010- 11, the Agency appropriately began making the payments in Fiscal Year 2011 -12 and the County Auditor - Controller's Office has continued doing so since it assumed the responsibility of calculating pass through payments upon the dissolution of the Agency. The three taxing entities claim that the triggered statutory pass through payments are retro- active to Fiscal Year 2003 -04, when the time limit on incurring indebtedness for the Central City and Inter -City Redevelopment Project Areas expired on January 1, 2004. While the Successor Agency disagrees with the basis for the claims made by the taxing entities, there is a desire to resolve these outstanding claims. At its regularly scheduled meeting on February 10, 2015, the Oversight Board gave direction to the Successor Agency staff to include the claims on ROPS 15 -16A, on the condition that: 1. the taxing entities provides proof (i.e. certified return receipt) of notices sent to all taxing entities that may be impacted by the inclusion of the claims; and 2. the three taxing entities that originally initiated the demands agree to indemnify the Successor Agency for any claims /liability resulting from the requested payments, and waive and release the Successor Agency for any other claims the requesting entities may have against the Successor Agency for pass through payments. The agreement(s) with each of the three taxing entities (Exhibit 1) is subject to subsequent approval by the Oversight Board and by the Department of Finance (DOF). STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #4 City Financial Stability, Objective #1 (Maintain a stable, efficient and transparent financial environment). 4 -2