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6.1 B Page 84 NOTE 14 — REDWOOD CITY REDEVELOPMENT AGENCY �CONTINUED� generally require the Agency to assist in financing land acquisition or operating costs of a specific project, but are based on the developer's performance on that project as measured by increases in property taxes and sales taxes generated by the project or to provide affordable housing to the community. The increases in these taxes are the only source of Agency assistance for the project. The Agency has agreements termed pass-throughs with government entities. These agreements require the Agency to pass through to these entities a portion of the property tax increases it collects, representing the increases these entities would have expected to collect if the Agency had not been formed. NOTE 15 — LITIGATION AND CONTINGENT LIABILITIES The City generally follows the practice of recording liabilities resulting from claims and legal actions only when they become fixed or determinable in amount. There are lawsuits pending in which the City is a party. In the opinion of the City Attorney, the City has adequate legal defenses and/or reserves to cover such liability if it does arise. NOTE 16— CONSTRUCTION AND OTHER SIGNIFICANT COMMITMENTS As of lune 30, 2010, the City has the following significant commitment (which are encumbered): $2,485,497 for the Recycled Water System Development. NOTE 17 — SOUTH BAYSIDE WASTE MANAGEMENT AUTHORITY Redwood City is a member of the South Bayside Waste Management Authority (SBWMA), a joint powers authority established to purchase the solid waste transfer station located in San Carlos, California from Browning-Ferris Industries, now Allied Waste Systems (Allied), and then lease the transfer station back to Allied. Currently there are 12 public entities that are members of this organization. Each of these members also, by individual and separate legislative action, has entered into a franchise agreement with Allied for solid waste collection within their respective jurisdictions. The SBWMA issued $20 million in bonds in 1999 to provide funds for the purchase of the transfer station. The lease payments received from Allied for the use of the transfer station provide funds for the SBWMA to pay the principal and interest on the outstanding bonds. The debt issued by the SBWMA is not an obligation of any of the member entities. Allied in turn includes the lease payments to the SBWMA as an eligible cost to be recovered from solid waste collection customers under the terms of their franchise agreements. During FY 2009/10, SBWMA issued $58.5 million in bonds to finance improvements at the solid waste transfer station, and the remaining balance of the 1999 bonds were retired. The SBWMA also serves as a regional forum for member entities to collectively pursue other solid waste management matters such as rate setting, solid waste reduction, and meeting recycling goals as required by state law. 61