10A Action 2008 0602 - Laserfiche WebLink

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2008 Tax Allocation Bonds 2 May 27, 2008 took effect in 1994), the Alameda County-City of San Leandro Redevelopment Plan (the "Redevelopment Plan") contains a dollar limit cap of $2.65 billion in the amount of tax increment revenues that can be collected under the Redevelopment Plana To date, the Agency has collected $54.7 million in tax increment revenues in the Project Area that are subject to the cap. Table 1 below presents the general information regarding the Project Area and the Redevelopment Plan: Table 1 General Information Regarding the Project Area and the Redevelopment Plan Plan Ado tion July 11, 1993 Plan Limits: -Last Date for Debt Issuance July 11, 2013 -Plan Effectiveness July 11, 2034 -Last Date for Recei t of Tax Increment July 11, 2044 -Amount of Bond Indebtedness $880,000,000 -Gross Tax Increment Allocated to the Agency $2,650,000,000 -Amount of Increment Collected to Date $54,700,000 BOND CAPACITY Based on projections of the Project Area's tax increment revenues through 2044 (at a growth rate of 4%) and based on current interest rates (of 6%), the Agency could issue approximately $65 million in tax allocation bonds for projects, including the proposed bond issue of up to $35 million, leaving approximately $30 million for future bond issues. The Agency is unable to issue the entire $65 million in bonds at this time because of constraints placed on issuers by the rating agencies and bond insurance companies. For example, those entities require tax increment revenue projections to be calculated based on the most conservative growth rate of 2%, which is the minimum growth rate allowed under Proposition XIII. When these conservative constraints are placed on the projections of tax increment revenues, the Agency is only able to issue up to $35 million (depending on bond interest rates) at this time. In accordance with the bond indenture, in the future the Agency can issue additional bonds on parity with the 2008 Bonds (the "Parity Bonds"). In order to issue Parity Bonds, the annual tax increment revenue from the Project Area must be equal to or greater than 130% of the debt service on the Parity Bonds plus the debt service on the 2008 Bonds. Once again, based on this and the estimate of the tax increment revenues to be generated within the Project Area through July 11, 2044, the Agency has a remaining debt capacity of approximately $30 million after the issuance of the 2008 Bonds, and the additional bonds could be issued no later than July 11, 2013. 2008 BONDS The resolutions staff is recommending Council and the Agency approve authorize the City and the Agency to take the necessary actions to issue and sell the 2008 Bonds. Staff is also recommending that the Agency sell the 2008 Bonds on a competitive bid basis. This financing structure allows the Agency to subject the 2008 Bonds to an open market bidding process and results in selecting the underwriter of the 2008 Bonds on the basis of the lowest total interest cost bid for the purchase of the 2008 Bonds. 08043