RDA Reso 2004-005 - Laserfiche WebLink

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The Governor's recent budget proposal for Fiscal Year 2004-05 (the "Governor's 2004- 05 Budget Proposal") again projects significant deficits in the State's General Fund and again includes a proposed transfer of $135,000,000 by redevelopment agencies to the ERAF. The Agency cannot predict whether the State Legislature will adopt the portion of the Governor's 2004-05 Budget Proposal requiring the Agency to make an identical transfer to ERAF in Fiscal year 2004-05 or other legislation requiring shifts in Fiscal Year 2004-05 or in future Fiscal Years of tax increment revenues to the State and / or to schools, whether by the ERAF mechanism or by other arrangement. The Agency expects the obligation of redevelopment agencies to transfer moneys to the ERAF will continue into the foreseeable future. Should such legislation be enacted, Tax Revenues available for payment of the Bonds may, in the future, be substantially reduced and the Agency's ability to pay debt service on the Bonds may be affected. Earthquake Risk Earthquake faults exist in many parts of Northern California, including in areas near to San Leandro, particularly the Hayward Fault, which is within the vicinity of the Project Area. Most new construction is required to be built in accordance with the Uniform Building Code which contains standards designed to minimize structural damage caused by seismic events however, the occurrence of severe seismic activity affecting the Project Area could result in substantial damage to property located in the Project Area, and could lead to successful appeals for reduction of assessed values of such property. Such a reduction of assessed valuations could result in a reduction of the Tax Revenues that secure the Bonds. Hazardous Substances An additional environmental condition that may result in the reduction in the assessed value of property would be the discovery of a hazardous substance that would limit the beneficial use of taxable property within the Project Area. In general, the owners and operators of a property maybe required by law to remedy conditions of the property relating to releases or threatened releases of hazardous substances. The owner or operator may be required to remedy a hazardous substance condition of property whether or not the owner or operator has anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the property within the Project Area be affected by a hazardous substance, could be to reduce the marketability and value of the property by the costs of remedying the condition. Bankruptcy Risks The enforceability of the rights and remedies of the owners of the Bonds and the obligations of the Agency may become subject to the following: the federal bankruptcy code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors' rights generally, now or hereafter in effect; usual equitable principles which may limit the specific enforcement under state law of certain remedies: the exercise by the United States of America of the powers delegated to it by the federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations of the police power inherent in the sovereignty of the State of California and its governmental bodies in the interest of servicing a significant and legitimate public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the owners of the Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise and consequently may entail risks of delay, limitation, or modification of their rights. -28-