AgdaPkt 2009-10-26 - Laserfiche WebLink

Browse Search

6.2C Communities will simultaneously purchase the Prop 1 A Receivables, issue bonds (PropPage 2 1 A Bonds) and provide each local agency with the cash proceeds in two equal installments, on January 15, 2010 and May 3, 2010 (to coincide with the dates that the State will be shifting property tax from local agencies). The purchase price paid to the local agencies will equal 100% of the amount of the property tax reduction. All transaction costs of issuance and interest will be paid by the State of California. Participating local agencies will have no obligation on the bonds and no credit exposure to the State. If the District sells its Prop 1A Receivable under the Prop 1A Securitization Program, California Communities will pledge the District's Prop 1A Receivable to secure the repayment of a corresponding amount of the Prop 1A Bonds. The District's sale of its Prop 1 A Receivable will be irrevocable. Bondholders will have no recourse to the District if the State does not make the Prop 1 A Repayment. The Resolution authorizing the sale of the Prop 1 A Receivable along with the other signature documents and legal opinions must be submitted to California Communities no later than November 6,2009. The District, as separate legal entity with the City Council serving as its governing body, was established in 1964 to provide a mechanism to finance the reclamation of portions of the Redwood Shores area, the construction of right-of-way infrastructure and facilities, and for the on-going maintenance of this infrastructure and facilities. While all of the debt that was issued to finance the reclamation and facility projects has been paid-off, the District receives about $665,000 of property taxes annually which is used to partially finance the cost of maintaining right-of-way facilities in the Redwood Shores area. This revenue is included within the 1 % general property tax rate and does not cause Redwood Shores' property owners to pay more property taxes than property owners in other areas of Redwood City. The District's property taxes are subject to the Prop 1A suspension. Current estimates are that the District will lose about $52,000 under the Prop 1A suspension. Since the District is a separate legal entity, the City Council, acting as the District's governing board, must adopt the attached resolution so that the District may sell its Prop 1 A Receivable. Proposition 1A Program Sponsor California Statewide Communities Development Authority (California Communities) is a joint powers authority sponsored by the California State Association of Counties and the League of California Cities. The member agencies of California Communities include approximately 230 c.ities and 54 counties throughout California. Benefits of Participation in the Proposition 1 A Securitization Program . Immediate cash relief - the sale of the District IS Prop 1A Receivable will provide the District with 1000/0 of its Prop 1A Receivable in two equal installments, on January 15, 2010 and May 3, 2010. . Mitigates impact of 80t'o property tax withholding in January and May. Per ABX4 14 and ABX4 15 and the clean-up legislation, SB 67, the State will withhold 80/0 of property tax receivables due to cities, counties, and special districts under Prop 1 A. Bond proceeds are intended to be distributed to participating agencies to coincide with the dates that the State will be shifting property tax from local agencies.