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6.1. B. - Page 90 NOTE 18 — 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, 2011, one employee had a loan due to the City in the amount of $40,592. NOTE 19 — PROPOSITION 1A BORROWING BY THE STATE OF CALIFORNIA (FOR LOCAL GOVERNMENTS THAT PARTICIPATED IN THE SECURITIZATION PROGRAM) Under the provisions of Proposition IA and as part of the 2009-10 budget pacl<age passed by the California state legislature on July 28, 2009, the State of California borrowed 8% of the amount of property tax revenue, including those property taxes associated with the in-lieu motor vehicle license fee, the triple flip in lieu sales tax, and supplemental property tax, apportioned to cities, counties and special districts (excluding redevelopment agencies). The state is required to repay this borrowing plus interest by June 30, 2013. After repayment of this initial borrowing, the California legislature may consider only one additional borrowing within a ten-year period. The amount of this borrowing pertaining to the City of Redwood City was $2,902,322. Authorized with the 2009-10 State budget pacl<age, the Proposition IA Securitization Program was instituted by the California Statewide Communities Development Authority (California Communities), a joint powers authority sponsored by the California State Association of Counties and the League of California Cities, to enable local governments to sell their Proposition IA receivables to California Communities. Under the Securitization Program, California Communities simultaneously purchased the Proposition IA receivables and issued bonds (Prop IA Bonds) to provide local agencies with cash proceeds in two equal installments, on January 15, 2010 and May 3, 2010. The purchase price paid to the local agencies equaled 100% of the amount of the property tax reduction. All transaction costs of issuance and interest were paid by the State of California. Participating local agencies have no obligation on the bonds and no credit exposure to the State. The City participated in the securitization program and accordingly property taxes have been recorded in the same manner as if the State had not exercised its rights under Proposition IA. The receivable sale proceeds were equal to the bool< value and, as a result, no gain or loss was recorded. 64