AgdaPkt 2016-02-08 Closed and Joint SA PFA

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requirements and payment of certain amounts as required by Sections 34179.6 and 34183.5, the Department of Finance (“DOF”) shall issue, within five business days, a finding of completion of the requirements of Section 34179.6 to the successor agency. Health and Safety Code Section 34191.4 provides in part that, following issuance of a finding of completion by DOF, and upon application by the successor agency and approval by the oversight board, loan agreements entered into between the redevelopment agency and the city, county or city and county that created the redevelopment agency shall be deemed to be enforceable obligations provided that the oversight board makes a finding that the loan was for legitimate redevelopment purposes. In addition to establishing when a loan agreement will be deemed to be an enforceable obligation, Section 34191.4 further establishes certain restrictions and limitations on the repayment of the loan. If the oversight board finds that the loan is an enforceable obligation, the accumulated interest on the loan shall be recalculated in accordance with Section 34191.4(b)(3). In addition to the recalculation of interest, Section 34191.4 limits the amounts that can be repaid to the City to one-half of the increase between the amount distributed to taxing entities under Section 34183(a)(4) in the base fiscal year 2012-13 and the amount distributed to the taxing entities in that fiscal year the payment is being made. Further, any repayments received by the City must first be used to repay any amounts borrowed from the Low and Moderate Income Housing Fund (e.g., SERAF loan), and after that twenty percent of any loan repayment shall be deducted from the loan repayment amount and shall be transferred to a Low and Moderate Income Housing Asset Fund. Ratification and Amendment of Loans The City and Successor Agency staff have prepared (1) a Ratification and Amendment to SERAF Loan (“Amendment to SERAF Loan”), and (2) a Ratification and Amendment to the City/RDA Loan Agreement (“Amendment to City/RDA Loan”), in order to ratify the existence and validity of the SERAF Loan, and the City/RDA Loan (collectively, the “Loans”), and to establish repayment terms relating to the Loans. Action by both the City Council and the Successor Agency is required. As discussed above, Health and Safety Code Section 34191.4 provides in part that, following issuance of a finding of completion by DOF, and upon application by the successor agency and approval by the Oversight Board (OB), loan agreements entered into between the redevelopment agency and the city, county or city and county that created the redevelopment agency shall be deemed to be enforceable obligations provided that the OB makes a finding that the loan was for legitimate redevelopment purposes. The OB unanimously approved the finding that the loans were for legitimate redevelopment purposes and should be reinstated at their January 28, 2016 meeting. Provisions of the Dissolution Act provide that, if loans between the City and the former Redevelopment Agency are determined to be enforceable obligations, the repayments 6.1.D. - Page 5