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CITY OF SAN LEANDRO AND <br />REDEVELOPMENT AGENCY <br />STAFF REPORT <br />DATE: May 27, 2008 <br />TO: <br />FROM <br />BY <br />John Jermanis, City Manager and <br />Executive Director <br />APPROVED AND FORWARDED <br />TO CITY COUNCIL/ <br />REDEVELOPMENT AGENCY <br />Perry Carter, Interim Finance Director <br />Luke Sims, Commu~n~it'y' Development Director, <br />Cynthia Battenberg;CBusiness Development M''a~~n''a~~ger <br />SUBJECT: ISSUANCE OF TAX ALLOCATION BONDS BY THE REDEVELOPMENT <br />AGENCY OF THE CITY OF SAN LEANDRO - $35,000,000 ALAMEDA <br />COUNTY-CITY OF SAN LEANDRO REDEVELOPMENT PROJECT TAX <br />ALLOCATION BONDS, SERIES 2008. <br />SUMMARY AND RECOMMENDATION <br />Staff recommends that the City Council and the Redevelopment Agency Board approve the <br />resolutions and the necessary bond documents to issue the Alameda County-City of San Leandro <br />Redevelopment Project Tax Allocation Bonds, Series 2008 (the "2008 Bonds"). Proceeds of the <br />2008 Bonds will be used to finance capital projects in the Alameda County-City of San Leandro <br />Redevelopment Project Area (the "Project Area"), pay certain costs of issuance and fund a <br />reserve fund for the 2008 Bonds. The 2008 Bonds will have a maximum par value of $35 <br />million and the average annual interest rate payable on the 2008 Bonds is estimated to not exceed <br />6%. However, since the sale of the 2008 Bonds will be on a competitive bid basis within thirty <br />days of the Council's approval of the issuance of the 2008 Bonds, the exact interest rate will be <br />determined at that time. Debt service on the 2008 Bonds will be paid only from tax increment <br />revenues generated by the Project Area. <br />A detailed discussion of the proposed bond issue, the plan of financing, the financing team and <br />the documentation required to complete this financing transaction follows. <br />BACKGROUND <br />Interest rates continue to remain historically low, making it an opportune time for municipalities <br />to finance new capital projects through the issuance of municipal bonds. Another key <br />consideration that makes it an appropriate time to issue the 2008 Bonds is the operating limits <br />imposed on the Project Area by state law. <br />The Project Area is comprised of 1,700+/- acres of property located within both the City of San <br />Leandro and the unincorporated area of Alameda County. The Project Area was established in <br />1993 and is subject to the statutory provisions of redevelopment law. Since the Project Area was <br />established prior to the effective date of AB1290 (a major revision of redevelopment law that <br />John J. e ~aanis, City Manager/ <br />Execut~v ~~ irector <br />08043 <br />