10A Action 2008 0602 Attach - Preliminary Official Statement

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receive tax increment under growth rates of up to 6% annually; at a 7% growth rate the Agency is projected to reach the tax increment cap in 2040-41 (which is after the final maturity of the 2008 Bonds in 2038). AB 1290. In 1993, the California Legislature enacted Assembly Bill 1290 (Chapter 942, Statutes 1993, effective January 1, 1994; "AB 1290") which contained several significant changes in the Redevelopment Law. Since the Project Area was established prior to AB 1290, the Redevelopment Plan is subject to negotiated revenue-sharing agreements with taxing entities rather than to the statutorily-defined pass-through formula contained in AB1290. Senate Bill 211. The California Legislature also enacted Senate Bill 211 (Chapter 741, Statutes 2001, effective January 1, 2002; "SB 211"). SB 211 provides, among other things, that the limitation on incurring indebtedness contained in a redevelopment plan adopted prior to January 1, 1994, may be deleted by ordinance of the legislative body. The City Council has and the County have not adopted an ordinance to amend the Redevelopment Plan pursuant to SB 211, so the time limit remains at July 11, 2013 and "statutory tax sharing" payments the would into effect under SB 211 upon adoption of such an ordinance have not been triggered. Senate Bill 1045 and Senate Bill 1096. The California Legislature adopted Senate Bill 1045 requiring the Agency during the Fiscal Year 2003-04 to make a payment for deposit in the Educational Revenue Augmentation Fund in the amount of $408,486 and provided that when an agency is required to make a payment pursuant to Section 33681.9 of the Redevelopment Law (added by Senate Bill 1045), the City Council may amend the redevelopment plan to extend the time limit of the effectiveness of the redevelopment plan and the time limit to repay indebtedness by one year by adoption of an ordinance. Pursuant to Senate Bill 1045 the Agency has extended the term of redevelopment plan effectiveness of the Project Area by one year with the adoption of Ordinance No. 2003-018 on December 15, 2003. This extension in turn extends the terms of the Redevelopment Plan's effectiveness and the period within which the Project Area may repay indebtedness by one year. After the State's budget for 2004-05 was approved by the legislature and signed by the Governor, Senate Bill 1096 was adopted, which permits redevelopment agencies to extend their ability to collect tax increment by one year for each ERAF payment made in 2004-05 and 2005- 06. However, the extensions apply only to redevelopment plans having existing limits on plan effectiveness less than 20 years from the last day of the fiscal year in which the ERAF payment is made; as the remaining Redevelopment Plan effectiveness for the Project Area is greater than twenty years the Redevelopment Plan time limits may not be further extended under SB 1096. Agency Tax Sharing Obligations AB1290 Tax Sharing. As a project area formed prior to January 1, 1994, the Project Area is not subject to the statutory pass-through payments required for project areas formed after that date. Tax Sharing Agreements. The Project Area is subject to several fiscal agreements that were negotiated with taxing entities during the plan adoption process. These agreements are briefly summarized following. County Fiscal Agreement. Under a fiscal agreement between the County and the Agency, the County taxing entities (which include the County, the County Library District, the County Flood Control District and the Eden Fire Protection District) receive their proportionate share of a percentage of net tax increment. The percentage of net tax increment increases -18-