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HomeMy WebLinkAbout02 AFFORDABLE HOUSING REIMBURSEMENT AGREEMENTAGENDA REPORT Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency MEETING DATE: JUNE 24, 2014 SUBJECT/ACTION: ADOPT OVERSIGHT BOARD RESOLUTION NO. 14-11, RECONSIDERING, AFFIRMING AND RATIFYING THE AMENDED AND REINSTATED AFFORDABLE HOUSING REIMBURSEMENT AGREEMENT BETWEEN THE CITY OF TUSTIN AND THE SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY RECOMMENDATION / PROPOSED ACTION It is recommended the Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency adopt Oversight Board Resolution 14-11, reconsidering, affirming and ratifying the amended and reinstated Affordable Housing Reimbursement Agreement between the City of Tustin and the Successor Agency to the Tustin Community Redevelopment Agency, subject to the following condition: a) Should any subsequent modifications be required, the City Manager and/or Finance Director, or their authorized designee, shall be authorized to make any augmentation, modification, additions or revisions as may be necessary subject to certification by the Oversight Board Chair. (Note: This Resolution shall be effective after transmittal of this Resolution to the Department of Finance ("DoF") and the expiration of five (5) business days pending a request for review by DoF within the time periods set forth in the Dissolution Law. In this regard, if DoF requests review hereof, it will have 40 days from the date of its request to approve this Oversight Board action or return it to the Oversight Board for reconsideration and the action, if subject to review by DoF, will not be effective until approved by DoF.) BACKGROUND On June 5, 2007, the Tustin City Council and Tustin Community Redevelopment Agency ("Successor Agency") approved and authorized the execution of a "Reimbursement Agreement Between the City of Tustin and the Tustin Community Redevelopment Agency Related to Affordable Housing Responsibilities To Be Assumed by the Agency on June 5, 2007' ("Reimbursement Agreement') to assist the former Agency in carrying out its affordable housing obligations under the MCAS Tustin Redevelopment Plan. On January 10, 2010, and February 1, 2011, the City Council and Agency approved and authorized the execution of the First and Second Amendments to the Reimbursement Agreement. Agenda Report June 24, 2014 Page 2 The Reimbursement Agreement required the former Agency to reimburse the City for the 118 affordable housing units produced on property originally owned by the City and sold to John Laing Homes at a discount. The affordable housing units are located at Tustin Fields I & II and are comprised of 33 Very Low -Income, 23 Low -Income, and 62 Moderate -Income units, which are secured by promissory notes and deeds of trusts by the City that reflect a total promissory note value associated with production of the affordable housing units of $46,407,736. Beginning in Fiscal Year 2007/2008, the Agency began to make annual payments. On June 29, 2011, Assembly Bill x1 26 became effective, causing the dissolution and wind down of all redevelopment agencies; thereafter, Assembly Bill 1484 and other implementing legislation to Division 24, Parts 1.8 and 1.85 of the California Health & Safety Code (together, "Dissolution Law"). All redevelopment agencies in California were dissolved as of and on February 1, 2012, and the Successor Agency became responsible for winding down redevelopment activities in the City of Tustin. In compliance with Section 34177, the Successor Agency submitted a Recognized Obligation Payment Schedule ("ROPS") on March 15, 2012, to the State of California DoF for approval. The ROPS included a request for Redevelopment Property Tax Trust Funds ("RPTTF") to reimburse the City in accordance with the Affordable Housing Reimbursement Agreement. On March 29, 2012, DoF denied the City's request for payment, stating it was not an enforceable obligation. On April 10, 2012, the City protested DoF's denial but did not have any other recourse under the existing statute at that time. On August 29, 2012, the Successor Agency submitted the Third ROPS to DoF, which included the Reimbursement Agreement payment request. On October 13, 2012, DoF again denied the item, continuing with their stance that it was not an enforceable obligation. Since there was an opportunity to reinstate the Agreement through a Finding of Completion ("Finding") provision under the Dissolution Law, the Successor Agency chose not to request a "Meet and Confer' with DoF on this matter. On May 10, 2013, the Successor Agency remitted what it believes to be its last remaining unencumbered funds to the Orange County Auditor -Controller and, on May 13, 2013, requested a Finding from DoF. On July 3, 2013, DoF informed the Successor Agency that a Finding would not be issued until after the Successor Agency remitted the principal and interest due on December 1, 2013, for the December 31, 2008, Promissory Note between the City and Successor Agency. DoF's failure to issue the required finding of completion is contrary to the requirements under Section 34179.7, including their failure to provide a response within five business days of the Agency's May 13th request. In response, the City, the Successor Agency and the Tustin Housing Authority filed a "Petition for Writ of Mandate and Complaint for Declaratory and Injunctive Relief' ("Petition") in August with the Superior Court of the State of California ("Court") in Sacramento County. Agenda Report June 24, 2014 Page 3 In preparation for the March 2014 hearing on the Petition, on January 21St, the City and Successor Agency approved the Third Amendment to the Reimbursement Agreement; and, then on January 28th, the Oversight Board adopted Resolution No. 14-02 that amended and reinstated the Reimbursement Agreement, which under Section 34191.4(b)(2) establishes a payment schedule for repayment of the loan and set interest at the Local Agency Investment Fund rate. The DoF denied the Oversight Board's action, stating the Agency needed a Finding prior to reinstating a loan agreement. In anticipation of a favorable ruling from the Court, the Successor Agency submitted the Oversight Board -approved, Recognized Obligation Payment Schedule 14-15A ("ROPS 14-15A") to DoF on February 27, 2014, including the Reimbursement Agreement. The DoF issued the ROPS 14-15A review letter on April 11, 2014, and, the DoF again denied the Reimbursement Agreement as an enforceable obligation. The Successor Agency requested a "Meet and Confer", seeking to list the Reimbursement Agreement (and other disallowed items) on ROPS 14-15A based on the April 7, 2014, Court decision on Petition Case No. 34-2013-80001623. The Court held that the Reimbursement Agreement is not an enforceable obligation, but it is a contract eligible to be reinstated under Section 34191.4 after the issuance of a Finding of Completion; and the Court ruled in Tustin's favor that the DoF erred in refusing to issue to Tustin its Finding of Completion after the due diligence payments were made in May 2013. On April 24, 2014, the Court issued a Writ mandating DoF to issue the Successor Agency its Finding of Completion, nunc pro tunc as of May 15, 2013. On April 29, 2014, the Oversight Board reconsidered Oversight Board Resolution No. 14-02 and adopted Oversight Board Resolution No. 14-07, affirming and ratifying the previously approved Third Amendment to the Reimbursement Agreement. The Oversight Board determined the Affordable Housing Reimbursement Agreement was a loan that was entered into for legitimate redevelopment purposes. On May 14, 2014, DoF did not approve Oversight Board Resolution No. 14-07, citing Section 34191.4(b)(1) which specifically states that loan agreements between the agency and the city that created it shall be deemed enforceable obligations provide that the Oversight Board makes a finding that the loan was for legitimate redevelopment purposes. However, DoF determined the City did not loan any funds to the former Redevelopment Agency, but rather the Agreement was entered into to reimburse the City for losses it suffered in the selling parcels to a developer at below-market prices several years earlier. As authorized by Section 34179(h), DoF returned the Oversight Board action to the Oversight Board for reconsideration. Pursuant to Section 34179(h), the Oversight Board has reconsidered the Reimbursement Agreement and has determined the Agreement is a loan as defined by all standards of acceptable legal and business practice and the loan was for legitimate Agenda Report June 24, 2014 Page 4 redevelopment purposes, including causing the development of affordable housing in the community for very -low to moderate income households. The Oversight Board has determined reaffirming and re -ratifying the previously approved Third Amendment to the Reimbursement Agreement and submission to DoF is in the best interest of the City and Successor Agency and in accord with the public purposes and provisions of applicable state and local laws and requirements. A copy of the Third Amendment to the Affordable Housing Reimbursement Agreement is attached to Oversight Board Resolution No. 14-11. Staff is available to answer any questions the Oversight Board may have. Attachment: Oversight Board Resolution No. 14-11 OVERSIGHT BOARD RESOLUTION NO. 14-11 A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY RECONSIDERING, AFFIRMING AND RATIFYING THE AMENDED AND REINSTATED AFFORDABLE HOUSING REIMBURSEMENT AGREEMENT BETWEEN THE CITY OF TUSTIN AND THE SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY The Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency finds, determines and declares as follows: A. The former Tustin Community Redevelopment Agency ("Agency") was a community redevelopment agency previously organized and existing under the California Community Redevelopment Law, Health and Safety Code Sections 33000, et seq. ("CRL") and prior to its dissolution was authorized to transact business and exercise the powers of a redevelopment agency pursuant to action of the City Council ("City Council") of the City of Tustin ("City"); and B. The City of Tustin is a municipal corporation of the State of California; and C. Assembly Bill X1 26 added Parts 1.8 and 1.85 to Division 24 of the California Health and Safety Code, which laws cause the dissolution and wind down of all redevelopment agencies ("Dissolution Law"); and D. On December 29, 2011, in the petition California Redevelopment Association, et al v. Ana Matosantos, et al ("Matosantos Decision"), the California Supreme Court upheld the Dissolution Act and thereby all redevelopment agencies in California were dissolved as of and on February 1, 2012 under the dates in the Dissolution Act that were reformed and extended thereby ("Supreme Court Decision"); and E. As of February 1, 2012, the former Agency was dissolved pursuant to the Dissolution Laws and as a separate public entity, corporate and politic the Successor Agency administers the enforceable obligations of the former Agency and otherwise unwinds the former Agency's affairs, all subject to the review and approval by a seven -member oversight board ("Oversight Board"); and F. Section 34179 provides that the Oversight Board has fiduciary responsibilities to holders of enforceable obligations and the affected taxing entities that benefit from distributions of property tax and other revenues pursuant to Section 34188 of Part 1.85 of the Dissolution Laws; and G. Pursuant to Section 34179, the Successor Agency's Oversight Board has been formed and the initial meeting occurred on March 13, 2012; and H. Section 34179(e), as amended by Assembly Bill 1484 ("AB 1484"), requires all actions taken by the Oversight Board to be adopted by resolution; and On June 5, 2007, the Tustin City Council and Tustin Community Redevelopment Agency approved and authorized the execution of a "Reimbursement Agreement Between the City of Tustin and the Tustin Community Redevelopment Agency Related to Affordable Housing Responsibilities To Be Assumed by the Agency on June 5, 200%' (the "Reimbursement Agreement') to assist the Agency in carrying out its affordable housing obligations under the MCAS Tustin Redevelopment Plan; and J. On January 10, 2010, and February 1, 2011, the City Council and former Agency approved and authorized the execution of the First and Second Amendments to the Reimbursement Agreement.; and K. The Reimbursement Agreement required the former Agency to reimburse the City in the amount of $46,407,736 for 118 affordable housing units produced on property originally owned by the City and sold to John Laing Homes at a discount; and L. In accordance with the Dissolution Act, the Successor Agency submitted the Reimbursement Agreement on the Recognized Obligation Payment Schedule for approval by the State of California Department of Finance ("DoF"); and M. DoF denied the Reimbursement Agreement, stating that it is not an enforceable obligation and indicated the Successor Agency could seek to reinstate the Reimbursement Agreement upon receiving a Finding of Completion ("Finding"); and N. On May 10, 2013, the Successor Agency remitted what it believed to be its last remaining unencumbered funds to the Orange County Auditor -Controller and on May 13, 2013, requested a Finding from DoF; and O. On July 3, 2013, DoF informed the Successor Agency that a Finding would not be issued until after the Successor Agency remitted the principal and interest due on December 1, 2013, for the December 31, 2008 Promissory Note between the City and Successor Agency; and P. In response, the City, the Successor Agency and the Tustin Housing Authority filed a "Petition for Writ of Mandate and Complaint for Declaratory and Injunctive Relief' with the Superior Court of the State of California in Sacramento County; and Q. The City and Successor Agency have determined it is necessary and appropriate to amend and reinstate the Reimbursement Agreement originally entered into by and between the City of Tustin and the former Tustin Community Redevelopment Agency on June 5, 2007, as an enforceable obligation; and R. On January 28, 2014, the Oversight Board duly considered all other related matters and found the Affordable Housing Reimbursement Agreement and the First, Second, and Third Amendments were for legitimate redevelopment purposes and deemed the Reimbursement Agreement an enforceable obligation by adopting Oversight Board Resolution No. 14-02; and S. On February 20, 2014, the DoF did not approve Oversight Board Resolution No. 14-02 and returned it to the Oversight Board for reconsideration when the Successor Agency receives the Finding; and T. On April 24, 2014, the Superior Court, County of Sacramento issued its ruling in the Petition Case No. 34-2013-80001623 under which a Writ mandated the State Department of Finance ("DoF") to issue the Successor Agency its Finding of Completion, nunc pro tunc as of May 15, 2013; and U. On April 29, 2014, the Oversight Board reconsidered Oversight Board Resolution No. 14-02 and adopted Oversight Board Resolution No. 14-07, affirming and ratifying the previously approved Third Amendment to the Affordable Housing Reimbursement Agreement and submission to DoF was in the best interest of the City and Successor Agency and in the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements; and V. Also, by this Oversight Board Resolution No. 14-07 reaffirmed that the Reimbursement Agreement was entered into for legitimate redevelopment purposes, that the Reimbursement Agreement, as amended and reinstated, is an enforceable obligation; and W. On May 14, 2014, DoF did not approve Oversight Board Resolution No. 14-07, citing Section 34191.4(b)(1) which specifically states that loan agreements between the agency and the city that created it shall be deemed enforceable obligations provide that the Oversight Board makes a finding that the loan was for legitimate redevelopment purposes. However, DoF determined the City did not loan any funds to the former Redevelopment Agency, but rather the Agreement was entered into to reimburse the City for losses it suffered in the selling parcels to a developer at below-market prices several years earlier; and X. The Oversight Board has reconsidered the Affordable Housing Reimbursement Agreement and has determined the Agreement is a loan as defined by all standards of acceptable legal and business practice and the loan was for legitimate redevelopment purposes; and Y. The Oversight Board has determined reaffirming and re -ratifying the previously approved Third Amendment to the Affordable Housing Reimbursement Agreement and submission to DoF is in the best interest of the City and Agency and in the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements. NOW, THEREFORE, BE IT RESOLVED BY A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY: Section 1. The foregoing recitals are incorporated into this Resolution by this reference, and constitute a material part of this Resolution. Section 2. The Oversight Board, in reconsideration, reaffirms and ratifies the previously approved Third Amendment to the Affordable Housing Reimbursement Agreement as a loan agreement in accordance with Section 34191.4(b)(1), attached hereto as Attachment No. 1 and incorporated herein, and further authorizes the Successor Agency to transmit this Resolution to the State Department of Finance ("DoF"). Section 3. The Executive Director of the Successor Agency or his authorized designee is directed to post this Resolution on the City/Successor Agency website. Section 4. This Resolution shall be effective after transmittal of this Resolution to DoF and the expiration of five (5) business days pending a request for review by DoF within the time periods set forth in Assembly Bill No. 1484. In this request, if DoF requests review hereof, it will have 40 days from the date of its request to approve this Oversight Board action or return it to the Oversight Board for reconsideration and the action, if subject to review by DoF, will not be effective until approved by DoF. Section 5. The Secretary of the Oversight Board shall certify to the adoption of this Resolution. APPROVED AND ADOPTED this 24th day of June, 2014. Doug Davert, Chairman Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency ATTEST: Charles E. "Chuck" Puckett, Secretary Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency STATE OF CALIFORNIA ) COUNTY OF ORANGE )SS CITY OF TUSTIN ) I, CHARLES E. "CHUCK' PUCKETT, Secretary of the Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency, do hereby certify that the whole number of the members of the Agency Board is seven; that the above and foregoing Resolution No. 14-11 was duly passed and adopted at a regular meeting of the Oversight Board, held on the 24th day of June, 2014, by the following vote: BOARD MEMBER AYES: BOARD MEMBER NOES: BOARD MEMBERS ABSTAINED: BOARD MEMBERS ABSENT: Charles E. "Chuck" Puckett, Secretary Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency Attachment No. 1 — Third Amendment to the Affordable Housing Reimbursement Agreement ATTACHMENT NO. 1 THIRD AMENDMENT TO THE AFFORDABLE HOUSING REIMBURSEMENT AGREEMENT [Attached] THIRD AMENDMENT TO REIMBURSEMENT AGREEMENT (CITY OF TUSTIN AND THE SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY RELATED TO AFFORDABLE HOUSING RESPONSIBILITIES ASSUMED BY THE SUCCESSOR AGENCY) This THIRD AMENDMENT TO REIMBURSEMENT AGREEMENT (City of Tustin and the Successor Agency to the Tustin Community Redevelopment Agency Related to Affordable Housing Responsibilities Assumed by the Successor Agency) ("Third Amendment") is entered into as of this 21' day of January, 2014 ("Effective Date") by and between the CITY OF TUSTIN, a municipal corporation ("City"), and the SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a public body corporate and politic ("Successor Agency"). RECITALS A. The City has previously acquired from the Department of the Navy certain real property within the Marine Corps Air Station -Tustin Redevelopment Project Area ("MCAS Project") for resale to developers for the development of residential uses including a specified number of affordable housing units pursuant to the MCAS Tustin Reuse Plan/Specific Plan and the MCAS Project Redevelopment Plan. The Redevelopment Plan was developed in accordance with California Community Redevelopment Law, Health and Safety Code Sections 33000, et seq. ("CRL"). B. On June 5, 2007 the City and the former Tustin Community Redevelopment Agency ("former Agency") entered into an agreement ("Reimbursement Agreement") pursuant to which the former Agency agreed to reimburse the City from Tax Increment received by the former Agency from the WAS Project, South Central Project, Town Center Project and other available former Agency resources, including funds deposited into the former Agency's Low and Moderate Income Housing Fund for the development of one hundred eighteen (118) affordable housing units at Tustin Field I & II in the MCAS Project. C. The Reimbursement Agreement was entered into as a result of insufficient tax increment revenue in the MCAS Tustin Project Area being available to provide subsidies to developers at the levels that would permit the development of the affordable housing on an economically feasible basis due to the properties having been tax exempt as federal military land that generated no property taxes available to be expended to write-down or otherwise cause development of the land in conformity with the federal agreements being implemented as a pari of base closure and reuse. In order to assist the formes Agency in meeting its affordable housing obligations in the MCAS Tustin Project Area, the City of Tustin entered into an agreement to sell certain property ("Property") at a discount sufficient to permit developers to economically develop the required number of affordable housing units. D. To assist the former Agency in ensuring that such affordable housing units developed on such Property were and continue to be sold and remain available at affordable housing costs to, and occupied by, persons and families of very low to moderate income at a subsidized sale price for at Ieast the forty-five (45) years for owner -occupied units prescribed by CRL Section 33334.3(0, and to provide for future ongoing monitoring requirements for such affordable units under CRL Section, 33418, the City has encumbered such affordable housing units with covenants and deeds of trust that securitized the monetary investment and performance obligations of the trustor/homebuyer. The difference between the market value of each affordable unit and the affordable sale price of each and all affordable housing units is represented by the gap funding assistance provided to affordable homebuyers, each and all evidenced by promissory notes secured by second deeds of trust in favor of the City, hereinafter together referred to as the "Housing Affordability Subsidy". E. The City's Housing Affordability Subsidy for the development of one hundred eighteen (1 18) affordable units at Tustin Field I & 11 is $46,407,736. F. On January 5, 2010, the City and former Agency entered into a First Amendment to the Reimbursement Agreement ("First Amendment"). On February 1, 2011, the City and former Agency entered into a Second Amendment to the Reimbursement Agreement ("Second Amendment"). The Reimbursement Agreement, First Amendment, Second Amendment and this Third Amendment between the City and the Successor Agency shall also be collectively referred to as the Reimbursement Agreement. G_ The former Agency was established as a community redevelopment agency that was previously organized and existing under the California Community Redevelopment Law and previously authorized to transact business and exercise the powers of a redevelopment agency pursuant to action of the City Council ("City Council") of the City. H. Assembly Bill xl 26 ("AB xl 26") added Parts 1.8 and 1.85 to Division 24 of the California Health & Safety Code and which laws were modified, in part, and determined constitutional by the California Supreme Court in the petition California Redevelopment Association, et al. v Ana Matosantos, et al., Case No. 5194861 ("Matosantos Decision"), which laws and court opinion caused the dissolution of all redevelopment agencies and winding down of the affairs of former redevelopment agencies; thereafter, such laws were amended further by Assembly Bill 1484 ("AB 1484") and by Senate Bill 341 that affects affordable housing assets (together AB xl 26, the Matosanlos Decision, AB 1484 and SB 341 are referred to as the "Dissolution Laws"), and all statutory references herein are to the Health and Safety Code of the Dissolution Laws unless otherwise stated. 1. As of February 1, 2012 the former Agency was dissolved pursuant to the Dissolution Laws and as a separate public entity, corporate and politic the Successor Agency administers the enforceable obligations of the former Agency and otherwise unwinds the former Agency's affairs, all subject to the review and approval by a seven -member oversight board ("Oversight Board"). J. Section 34179 provides that the Oversight Board has fiduciary responsibilities to holders of enforceable obligations and the affected taxing entities that benefit from distributions of property tax and other revenues pursuant to Section 34188 of Part 1.55 of the Dissolution Laws. K, In accordance with the Dissolution Laws and in order to receive Redevelopment Property Tax Trust Funds, the Successor Agency submitted the Reimbursement Agreement on one or more Recognized Obligation Payment Schedules for review and approval by the State of California Department of Finance ("DoF"). L. DoF denied and continues to the deny the Reimbursement Agreement, stating it is not an enforceable obligation and indicated the Successor Agency could seek to reinstate the Reimbursement Agreement upon receiving a Finding of Completion ("Finding"). 2 M. On May 10, 2013, the Successor Agency remitted what it believed to be its last remaining unencumbered funds to the Orange County Auditor -Controller and on May 13, 2013, requested a Finding from DoF. N. On July 3, 2013, DoF informed the Successor Agency that a Finding would not be issued until after the Successor Agency remitted the principal and interest due on December 1, 2013 for the December 31, 2008 Promissory Note between the City and Successor Agency, which note was not due at the time of the July 2012 "true -up" payment, nor at the time of the DoF's completion of the due diligence review reports. O. In response, the City, the Successor Agency and the Tustin Housing Authority, as housing successor under Section 34176 and 34176.1, have filed a "Petition for Writ of Mandate and Complaint for Declaratory and Injunctive Relief' in the Superior Court, County of Sacramento, State of California ("Petition"). P. While the Finding has been withheld from the Successor Agency under the Dissolution Laws, nonetheless as a part of the facts and information to be submitted to the Superior Court in connection with advancing the Petition, the City and the Successor Agency have determined it necessary and appropriate to amend and reinstate the Reimbursement Agreement originally entered into by and between the City of Tustin and the former Agency on June 5, 2007 as an enforceable obligation. Q. In accordance with the Dissolution Laws, the Reimbursement Agreement, as amended and reinstated, will also require the Oversight Board to review and deem it an enforceable obligation and then submit such action to the DoF for review and approval. NOW THEREFORE, the parties agree as follows: 1. Amendment__ of _Paragraph _ 1. Paragraph 1 of the Reimbursement Agreement is hereby deleted in its entirety and replaced with the following: "The Successor Agency agrees to reimburse the City for the Affordable Housing Subsidy from the Redevelopment Property Tax Trust Funds transferred by the county auditor -controller into the Redevelopment Obligation Retirement Fund of the Successor Agency. The City and the Successor Agency agree that, as the date of the original Amendment, the amount of the Affordable Housing Subsidy was Forty -Six Million Four Hundred Seven Thousand and Seven Hundred and Thirty -Six Dollars ($46,407,736). As a result of a larger principal payment made in FY 2007-2008 and the issuance of Tax Allocation Housing Bonds, net Twenty -Three Million Five Hundred Thousand Dollars ($23,500,000), used to make a larger principal payment in FY 2009-2010, the remaining balance to be repaid to the City is Sixteen Million Three Hundred Ninety -Three Thousand and One Hundred Seventy -Seven Dollars (516,393,177)." 2. Amendment of Parag_ra�h 5. Paragraph S of the Reimbursement Agreement is hereby deleted in its entirety and replaced with the following: "The obligations of the Successor Agency to make payments to the City required under this Agreement shall constitute a recognized obligation of the Successor Agency for the purpose of carrying out the closing out activities under the Dissolution Laws and are to be repaid to the City by the Successor Agency with interest at the interest rate earned by funds deposited into the Local Agency Investment Fund, pursuant to Health and Safety Code Section 34191.4(b)(2). The defined Debt Service Schedule is attached as EXHIBIT `A' and fully incorporated by this reference. The principal balance is updated to reflect all payments made since June 5, 2007, including the 2010 Housing Bond proceeds payment in FY 2009-2010." 3. Inco tin qf R citals. Each recital set forth in the Reimbursement Agreement and above in this Third Amendment shall be deemed to be part of the Reimbursement Agreement as amended by this Third Amendment. 4. Third Amendment. This Third Amendment constitutes a part of the Reimbursement Agreement and any reference to the Reimbursement Agreement shall be deemed to include a reference to such Reimbursement Agreement as amended hereby. 5. Full Force and Affect. Except as otherwise amended previously and herein, all terms, covenants, conditions and provisions of the Reimbursement Agreement shall remaining full force and effect. IN WITNESS WHEREOF, the City and the Successor Agency have executed the Third Amendment as of the Effective Date. ATTEST: CITY CLE By. G Jedre C. Parker r , 4 CITY: CITY OF TUSTIN, a California municipal corporation _ 1� M. SUCCESSOR AGENCY: SUCCESSOR AGENCY TO TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a public body corporate and pol ATTEST: CITY CLERK TO SUCCESSO"GENCY By; Je ff6y�C. Parker APPROVED AS TO FORM: Agency SkecA Counsel EXHIBIT `A' DEBT SERVICE SCHEDULE (attached) AFFORDABLE "OUSING REIMBURSEMENT AGREEMENT Original Principal 16.393,177 Interest (LAIF) 0.26% - Qtr end: Sept 2013 Original terms /year 5 Future FY Activity Fiscal Year Principal Interest 2 2015-2016 3 2016-2017 4 2017-2018 5 2018-2019 Total: ($3.261,631) (542,622) 153.270,1111 ($34,142) (53.7.78.613) IS25,6401 (5.287.138) (517,115) (53,295.684) (58.5691 EXHIBIT'A' iyment to City Endine Principal .After FY ($3,3(}4.253) 513,131,545.94 (53.304.253) $9.861.435.01 (53.304.253) 56,582,821.79 153,3114,2531 53,29504.17 ($3.304.253) (S0.00) (S 16.343.1'7) (S128.088) I iS16,521,2 55)