HomeMy WebLinkAboutRDA 03 LOAN AGREE 06-17-96 RDA NO. 3
: / 6-17,-96
In ter- o rn
DATE:
JUNE 12, 1996
TO: WILLIAM A. HUSTON, CITY MANAGER
FROM: RONALD A. NAULT, FINANCE DIRECTOR
SUBJECT: LOAN AGREEMENT BETWEEN THE CITY OF TUSTIN AND
THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY
SUMMARY: The approval of this loan and'i'administra'tive'iservices
· agreement between the city and the RedeVelopm' nt:'":.Age'ncY.:/Wil'l'
comply with section 33675 of.-th'e:.califo'rnia Health' and': safety
Code regarding the allocation and p'ayment of tax increment to
Redevelopment Agencies. .".: :.. '.:..~: i ~
RECOMMENDATION:
Authorize the Mayor and the Chairperson of the Redevelopment Agency
to execute the attached Loan Agreement off&ring and accepting a
loan from the City to the Agency of $2,400,000.
DISCUSSION:
Section .33670 et Seq. of the California Health and Safety Code
stipulates that tax increment can onlY be distributed to
RedeVelopment Agencies for the sole purpose of repaying debt. Any
tax increment collected in excess of outstanding debt will be
returned to the CountY to be redistributed to the original taxing
agencies. This loan from the General Fund will permit the Agency
to complete the goals and objectives of the South Central Project
Area for Fiscal Year 1996-97. The loan will be repaid to the
General Fund from tax increment generated by the South Central
Project Area.
BACKGROUND:
When a Redevelopment Agency Project Area is formed, the assessed
valuation for the area is frozen and becomes the base against which
all future growth is measured. The growth in property taxes
generated by the "incremental" growth in assessed valuation as.
measured against the base year is allocated directly to the
Redevelopment Agency. This "tax increment" and, to a much lesser
degree, interest earned on the increment, is the only source of
income made available to Redevelopment Agencies. Section 33610 of
the Health and Safety COde restricts the distribution of tax
increment to Redevelopment Agencies to the extent it is equal to or
less than outstanding debt. Until such time .that a long term
financing plan is completed, the policy of making annual loans
between the City and the Agency will assure the full receipt of tax
increment to the Agency and maximize the Agency's ability to meet
its goals and objectives in the South Central Project Area.
Finance Director
RAN:ts
Attachments
RAN5 :Agenda4. Jun
AGREEMENT
THIS AGREEMENT is made and entered into this 17th day of June,
1996, by and between the CITY OF TUSTIN, a municipal corporation of
the County of Orange, State of California, hereinafter referred to
as "City", and the TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a
California Redevelopment Agency, hereinafter referred to as
"Agency".
RECITALS
WHEREAS, the City Council of the City, pursuant to Health and
Safety Code section 33610, has deemed it necessary to loan the
Agency Two Million Four Hundred Thousand ($2,400,000.00) to assist
the Agency in carrying out the programs budgeted for 1996-97; and
WHEREAS, the City Council of the City offered said loan to the
Agency; and
WHEREAS, the City has offered to provide administrative,
planning, engineering, design, accounting and other services as
required, including direct and indirect overhead charges to the
Agency at a fixed rate; and
WHEREAS, the Agency, pursuant to Health and Safety Code
section 33601, has accepted said offers; and
WHEREAS, the parties intend to further memorialize their
agreement as to said loan and to set forth the terms and conditions
thereof as agreed to at the time of offer and acceptance;
NOW, THEREFORE, in consideration of the mutual convenants,
agreements and considerations contained herein, City and Agency
hereby agree as follows:
1. Said loan is to be used by the Agency in carrying out
programs in the South Central Redevelopment Project Area and any
other lawful purposes.
2. The sum loaned to the Agency is to be repaid to the City
as follows:
a ·
Interest on said sum shall accrue at the monthly rate as
reported by the Local Agency Investment Agency Fund
(LAIF) from the date of transfer of said sum until such
time as said sum is repaid to City.
be
The sum loaned to the Agency, as well as accrued interest
thereon, shall be repaid to'City by the Agency from tax
increment revenues received pursuant to Health and Safety
Code sections 33670 et seq.
Ce
If no funds become available to the Agency to repay said
sum, the money loaned and accrued interest thereon is
forgiven and need not be repaid to the City.
3. The sum agreed upon for other services, without interest
thereon, shall be paid to City by the Agency from tax increment
revenues received pursuant to Health and Safety Code sections 33670
et seq., as follows: $360j000 from the Town Center Project Area
and $406,000 from the South Central Project Area.
a ·
If no funds become available to the Agency to pay said
sum, it is forgiven and need not be paid to the City.
Executed this 17th day of June, 1996.
"CITY"
CITY OF TUSTIN
BY:
Tracy Wills Worley, Mayor
"AGENCY',
TUSTIN COMMUNITY REDEVELOPMENT AGENCY
BY:
Tracy Wills Worley, Chairperson
ATTEST:
Pamela Stoker,
City Clerk
Pamela Stoker,
Redevelopment Agency Secretary
RAN5 :AgreeRDA. ~un