AgdaPkt 2010-04-26 - Laserfiche WebLink

Browse Search

6.3B Page 1 i:RelP'ojRf $0 ~he lfionorab,le Mayor and.ICity 'Gouncil.'and~' the' Red'evelopm"entAgency l3oarct', 'FlItOm.tt\Q OJ, Mana' ~r,andl;Executiv~'(!jirectorJ April 26, 2010 SUBJECT Loan from the Low and Moderate Income Housing Fund to make the SERAF Payment for Fiscal Year 2009/10 RECOMMENDATION Approve a resolution authorizing a Joan of $2,812,838 from the Agency's Low and Moderate Income Housing Fund to make the required payment to the pending Supplemental Educational Revenue Augmentation Fund for Fiscal Year 2009/10. BACKGROUND In July 2009, the Governor signed AB 26 4x into law requiring the take of $2.05 billion in redevelopment funds statewide over the next two fiscal years to meet the State's Proposition 98 obligation to schools. The Redwood City Redevelopment Agency's (Agency) share is $3,562,576 in FY 2009110 and approximately $733,000 in FY 2010/11 for a total of $4.3 million. These funds are to be deposited into the county auditor's Supplemental Educational Revenue Augmentation Fund (SERAF) account by May 10, 2010. The SERAF payments could be made without resulting in a default of the Agency's existing indebtedness and obligations or negatively impacting programs and projects by borrowing from its low and moderate income housing fund (LMIHF).1 AB 26 4x allows redevelopment agencies (agencies) to borrow from their LMIHF if the agencies cannot make their full SERAF payment for FY 2009/10. However, the agencies must present findings that there are insufficient other moneys to meet the SERAF payment. In October and December 2009, staff presented to the Agency Board a cash flow analysis of both its housing and general funds to determine if the $3,562,576 SERAF payment can be made. The finding was that the Agency does not have sufficient funds in its general fund working capital balance to finance the SERAF payment without disrupting the current activities and operations of the Agency, including programs, services, projects, and debt obligations. Staff had recommended that the Agency borrow $2,812,838 from the projected LMIHF for FY 09/10. The remaining $749,738 will come from the Agency's general fund (account 807-66415). The Agency Board had concurred with staffs recommendation to borrow the maximum allowed from the LMIHF and take the remaining amount from the Agency's general fund.2 1 The LMIHF is the account whereby a minimum of 20 percent of the Agency's annual property tax increment is deposited for the purpose of increasing, improving and preserving the community's supply of low and moderate income housing. 2 In November 2009, AS 26 4x was modified to allow redevelopment agencies to borrow from accumulated balances in their housing fund as a loan to make their SERAF payment. At the December 2009 Agency Board hearing, staff expressed to the Board that borrowing from accumulated housing set aside was not warranted.