AgdaPkt 2009-06-15 clsd and spc - Laserfiche WebLink

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REPORT 6.2A Page 1 To the Honorable Mayor and City Council F.-om the Oi 1VI,.,,,ana er .., "~ June 15, 2009 SUBJECT Annual Tax Levy for the Redwood Shores Traffic Improvement District RECOMMENDATION Adopt a resolution authorizing the levy of special taxes for Fiscal Year 2009-10 in the amount of $837,364.64 on the parcels within Redwood City Community Facilities District 99-1 (Shores Traffic Improvement District) to be used to pay the principal and interest payments on bonds issued to finance certain transportation system improvements within the district. BACKGROUND In 1999, the City Council established the Shores Traffic Improvement District (STID) pursuant to the Mello-Roos Community Facilities Act of 1982 and authorized the issuance of up to $13,535,000 in bonds to finance transportation improvement projects in the Redwood Shores area. No General Fund resources or commitments support these bonds. These bonds are secured only by the real property within the district. The parcels that comprise the district are exclusively commercial properties in the Redwood Shores area; no residential properties are part of the district. The first of two planned series of bonds were issued in January 2001 in the amount of $5,045,000. This bond issue financed traffic improvements at several intersections in Redwood Shores. The second and final bond issue in the amount of $7,505,000 was issued in the fall of 2003 to finance the reconfiguration of the Ralston Avenue/Marine Parkway/U.S. 101 interchange. Accordingly, the total amount of bonds issued was $12,550,000. During the district formation proceedings, the City Council committed to levying annual special property taxes on the district property owners in an amount sufficient to pay for all principal, interest, and administration costs. The resolution presented to Council this 'evening will provide the county auditor authority to levy these taxes in FY 2009-10. As of May 31, 2009, $11,405,000 of principal remained outstanding. These bonds will be completely paid off on September 1, 2033. ALTERNATIVES The Council could elect not to levy these taxes, Doing so would jeopardize the district's ability to make principal and interest payments to bondholders and would likely cause a default on the outstanding bonds. The fiscal agent agreement, which provides all of the legal terms under which these bonds were issued, does not provide for any general fund contributions in the event that any of the district property owners default on their special tax payments. If the default. however, is the result of the Council failing to levy the special taxes then the