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NOTE 14 - REDWOOD CITY REDEVELOPMENT AGENCY (CONTINUED) The Agency has entered into agreements with developers and other government entities for the purpose of ensuring the redevelopment of properties in its area. The Agency's agreements with developers, termed disposition and development agreements or owner participation agreements, 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 proj ect. 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 June 30, 2004, the City had the following commitments (which were encumbered): $10,907,780 for the Redwood Shores/101 Interchange project, $10,565,881 for the Underground Parking Garage/Cinema project, $1,339,964 for the Recycled Water System project, and $1,153,577 for the Redwood Shores Library project. NOTE 1 7 - SOUTH BA YSIDE 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 (BFI) and then lease the transfer station back to BFI. 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 BFI 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 BFI 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. BFI 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. 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. 54