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6.1 B - Attachment No. 4 NOTE iH-RELATED PARTY TRANSACTIONS In June 2000,the City's Redevelopment Agency authorized a First Time Homebuyer Program targeted to City employees and school teachers from the Redwood City Elementary School District. Under the program, the Agency offers first time homebuyers financial assistance in the purchase of a home within the City of Redwood City. These loans bear no interest and are secured by third deeds of trust on the property. No payments are due until five years after the date of purchase. This loan program is extended to City employees who meet the criteria of the program. As of June 30, 2009, one employee had a loan due to the City in the amount of$40,592. In August 2003, the City made a housing assistance loan to the City Attorney to acquire real property in compliance with the employment agreement for $250,000 repayable in 30 years with an interest rate of 5.00% per annum on the unpaid loan balance. Interest of 3.75% per annum shall be deferred (non- compounded) and payable on the earlier of: (1)the transfer of the fee title to the property in whole or in part by the sale or otherwise; (2) within 12 months of the termination of his employment for any reason with the City; (3)within six months after the property ceases to be his principal residence; or(4)30 years after the recordation of the deed of trust. As of June 30, 2009, the outstanding balance of this loan receivable was$115,126. NOTE 19— SUBSEQUENT EVENTS A. State Takeaways Subsequent to June 30, 2009, the State of California (State) has decided to borrow certain revenue payments and to take certain funds from local governments including the City of Redwood City and the Redwood City Redevelopment Agency. These amounts are very significant to the City and Redevelopment Agency and are as follows: 8%of Property Taxes $ 2.9 million Redevelopment Agency $ 4.3 million Property taxes borrowed by the State for fiscal year 2009/10 were nearly $2 billion statewide to help the State's budget shortfall. Legislators and the Governor promised to allow local agencies to sell their eventual repayment from the State to investors to cover the property t�es and to pay the full cost of the sale, or securitization. Passage of Senate Bill 67 (SB 67) was accomplished on October 14, 2009. A future bond sale is necessary to complete the funding or securitization. The City has planned to use these funds in the 2009/10 budget. Any delay in funding may mean that the City will have no choice but to adopt mid-year service reductions, layoffs and other measures to manage significant cash-flow shortfalls that will occur. Redevelopment Agency funds have been estimated for a two year takeaway by the State. This decision is to be litigated by the California Redevelopment Association and other parties with the hope that this will be considered unconstitutional as was last year's State proposed takeaway. B. Redemption of Debt On October 26, 2009,the City Council adopted a resolution to pay off all remaining debt associated with the 1998 City Hall Variable Rate Certificates of Participation, which were originally scheduled to mature July 2021. The Certificates were paid off on November 2,2009. On October 26, 2009, the Redevelopment Agency Board adopted a resolution to pay off all remaining debt associated with the 1997 T�Allocation Refunding Bonds, which were scheduled to mature on July 15,2011. The planned payoff date for the bonds is December 1,2009. 62