RDA Reso 2004-005 - Laserfiche WebLink

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property within the Project Area, whether an increase or a reduction, will be realized in the future. Levy and Collection The Agency does not have any independent power to levy and collect property taxes. Any reduction in the tax rate or the implementation of any constitutional or legislative property tax decrease could reduce the Tax Revenues, and accordingly, could have an adverse impact on the ability of the Agency to repay the Bonds. Likewise, delinquencies in the payment of property taxes could have an adverse effect on the Agency's ability to make timely debt service payments. Tax Increment From Unsecured Roll The Fiscal Consultant reports that the tax increment attributable to the secured, unsecured and utility rolls are calculated separately, however the increment amounts are aggregated for calculation of the amount due the Agency. For fiscal year 2003-04, the incremental assessed valuation over the base year for the unsecured and utility rolls was a negative amount and over the last four years there has been volatility in the unsecured valuation. Substantial reductions in the unsecured tax roll could result in reduced tax increment revenues to the Agency notwithstanding increases in valuation in the secured roll. Parity Debt As referenced under the caption "Parity Debt", the Agency may issue or incur obligations payable from Tax Revenues on a parity with its pledge of Tax Revenues to payment of debt service on the Bonds. The existence of and the potential for such obligations increases the risks associated with the Agency's payment of debt service on the Bonds in the event of a decrease in the Agency's collection of Tax Revenues. State Budget Deficit; ERAF In connection with its approval of the budget for the 1992-93, 1993-94 and 1994-95 fiscal years, the State Legislature enacted legislation which, among other things, reallocated funds from redevelopment agencies to school districts by shifting a portion of each agency's tax increment, net of amounts due to other taxing agencies, to school districts for such fiscal years for deposit in the Education Revenue Augmentation Fund ("ERAF"). The amount required to be paid by a redevelopment agency under such legislation was apportioned among all of its redevelopment project areas on a collective basis, and was not allocated separately to individual project areas. Faced with a projected $23.6 billion budget gap for Fiscal Year 2002- 03, the State Legislature adopted and sent to the Governor of the State as urgency legislation, AB 1768 requiring redevelopment agencies to pay into ERAF in Fiscal Year 2002-03 an aggregate amount of $75 million. The Agency paid $221,249 into ERAF in Fiscal Year 2002-03 as its share of such $75 million. See "STATUTORY LIMITATIONS ON TAX REVENUES." The State of California continues to experience severe financial and budgetary stress. The Governor has estimated that the State General Fund aggregate deficit for Fiscal Year 2003- 04 will be over $38 billion. On August 2, 2003, the Governor signed the Fiscal Year 2003-04 Budget into law. Additional revenues to assist in balancing the State budget are provided pursuant to SB 1045, signed by the Governor on September 1, 2003, and effective immediately as Chapter 260, Statutes 2003. SB1045 requires redevelopment agencies to transfer a total of $135,000,000 to the ERAF in Fiscal Year 2003-04. The transfer must be completed by May 10, 2004, and the Agency's ERAF payment obligation is $408,486. The obligation is due from the Agency as a whole and need not be paid from increment generated from any specific project area. The Agency has funds on hand to make the ERAF payment for Fiscal Year 2003-04. -27-