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7.2A -1 <br />REPORT <br />To the Honorable Mayor and City Council <br />From the City Manager <br />June 2, 2003 <br />Subject <br />Annual Tax Levy for the Shores Traffic Improvement District <br />Recommendation <br />It is recommended that the City Council adopt a resolution authorizing the levy of special <br />taxes for FY 2003/04 in the amount of $1,043,028 on the parcels within Redwood City <br />Community Facilities District 99 -1 (Shores Traffic Improvement District). <br />Background <br />In 1999, the City Council established the Shores Traffic Improvement District (STID) <br />pursuant to the Mello -Roos Community Facilities Act of 198 and authorized the issuance <br />of up to $13,535,000 in bonds to finance transportation improvement projects in the <br />Redwood Shores area. No general fund resources or commitments support these bonds. <br />These bonds are secured only by the real property within the district. The parcels that <br />comprise the district are exclusively commercial properties in the Redwood Shores area; <br />no residential properties are part of the district. <br />The first of two planned series of bonds were issued in January 2001 in the amount of <br />$5,045,000. This bond issue financed traffic improvements at several intersections in <br />Redwood Shores. The second and final bond issue is expected to be issued in the fall of <br />2003 to finance the reconfiguration of the Ralston Avenue /Marine Parkway /U.S. 101 <br />interchange. <br />During the district formation proceedings, the City Council committed to levying annual <br />special property taxes on the district property owners in an amount sufficient to pay for all <br />principal, interest, and administration costs. The resolution presented to Council this <br />evening will provide the county auditor authority to levy these taxes in FY 2003/04. <br />Alternatives <br />The Council could elect not to levy these taxes. Doing so would jeopardize the district's <br />ability to make principal and interest payments to bondholders and would likely cause a <br />default on the outstanding bonds. In addition to subjecting the Council to lawsuits, a <br />default would also likely eliminate the Council's ability to issue the second series of bonds. <br />Fiscal Impact <br />No general fund resources are involved in supporting the district. All of the district's <br />expenditures will be paid by the property owners within the district. <br />N P� - <br />Brian Pority Edward Everretf <br />Director of Finance and Financial Planning City Manager <br />