HomeMy WebLinkAboutNew Business #4 6-01-87~~~i,~~~,~ , .i ~ ~~i~\ ~ NEW BUSINESS
~:~: ii::.: '.::~ ..~ ~'~,,~,,,,.~ NO. 4
DATE: MAY 27, 1987 ~ ........
TO: WILLIAM HU,$~T~N, CITY MANAGER/EXECUTIVE DIRECTOR, TUSTIN
~ COMMUNJ~TY REDEVELOPMENT AGENCY
FROM: RONALD A. ~~-~CE DIRECTOR
SUBJECT: 1987-88 ADVANCE FROM THE GENERAL FUND TO THE SOUTH CENTRAL
PROJECT AREA
~,,,. .
Recommendation
Members of the City Council/Redevelopment Board members,
authorize the Mayor/Chairman to sign the attached agreement
directing the advance of an additional $600,000 to the South
Central Project Area to carry out the programs of the
Redevelopment Agency during the 1987-88 fiscal year.
Discussion
Various Sections of the Health and Safety Code dictate the use of
tax increment income generated by and under redevelopment law.
The only allowable use of tax increment is for the payment of
debt. There are various ways of establishing debt, and for the
present, the City has entered into short term cash advances to
the Redeveloment Agency to be repaid from the annual tax
increment of the project area..
In order to complete the various projects of the Agency in the
South Central Project Area, an additional $600,000 needs to be
advanced from the General Fund. This will bring the total amount
due the General Fund from the South Central Project Area to
$1,147,416, with accrued interest. Our fiscal consultants, Katz
Hollis Coren & Associates, has estimated the 1987-88 tax
increment for this project area to be $1,034,000.
The City and the Agency will be working on a proposal for a more
permanent, long term financing alternative during the coming
fiscal year.
RAN/ej
Attachment
AGREEMENT
THIS AGREEMENT it made and entered into this 1st day of
June, 1987, 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 Six Hundred Thousand Dollars ($600,000) for the
administrative expenses and overhead of the Agency; and
WHEREAS, the City Council of the City offered said loan
to the Agency; and
WHEREAS, the Agency, pursuant to Health & Safety Code
Section 33601, has accepted said offer; and
WHEREAS, this loan is in addition to the amount of One
Hundred Twenty-Five Thousand Dollars ($125,000) accepted by the
Agency on June 18, 1984, and Two Hundred Fifty Thousand Dollars
($250,000) accepted by the Agency on June 2, 1986, making a total
loan of Nine Hundred Seventy-Five Thousand Dollars ($975,000),
plus accrued interest; and
WHEREAS, the parties intend to further memoralize 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
covenants, 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 the South Central Area Redevelopment Project and any other
lawful ~urposes.
2. The sum loaned to the Agency is to be repaid to
City as follows:
a. Simple interest on said sum shall accrue at the
rate of twelve percent (12%) per annum from the
date of transfer of said sum until such time as
said sum is repaid to City.
b. 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.
c. 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 City.
Executed this 1st Day of June, 1987.
"CITY"
CITY OF TUSTIN
By.
Richard B. Edgar, Mayor
"AGENCY"
TUSTIN COMMUNITY REDEVELOPMENT AGENCY
By
Richard B. Edgar, Chairman
ATTEST:
Mary E. Wynn, City Clerk
Mary Eo Wynn, Redevelopment Agency Secretary