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<br />60 <br />negative for the first time at -0.237%. In fiscal year 2011-12, the inflationary value adjustment <br />was 0.753%. For fiscal years 2012-13 and 2013-14, the inflationary value adjustment is 2.00%, <br />which is the maximum permissible increase under Article XIIIA. The fiscal year 2014-15 <br />inflationary value adjustment is 0.454%. <br /> <br />The Successor Agency is unable to predict if any adjustments to the full cash value of <br />real property within the Project Areas, whether an increase or a reduction, will be realized in the <br />future. <br /> <br />Development Risks <br /> <br />The general economy of a redevelopment project area will be subject to all the risks <br />generally associated with real estate development. Projected development within a <br />redevelopment project area may be subject to unexpected delays, disruptions and changes. <br />Real estate development operations may be adversely affected by changes in general <br />economic conditions, fluctuations in the real estate market and interest rates, unexpected <br />increases in development costs and by other similar factors. Further, real estate development <br />operations within a redevelopment project area could be adversely affected by future <br />governmental policies, including governmental policies to restrict or control development. If <br />projected development in a redevelopment project area is delayed or halted, the economy of the <br />redevelopment project area could be affected. If such events lead to a decline in assessed <br />values they could cause a reduction in incremental property tax revenues. <br /> <br />The Successor Agency believes that a decline in development activity in the Project <br />Areas is unlikely to adversely impact its ability to pay debt service on the 2014 Bonds in light of <br />the debt service coverage provided by fiscal year 2013-14 Tax Revenues. See “THE PROJECT <br />AREAS - Projected Available Net Tax Increment and Estimated Debt Service Coverage.” <br /> <br />Levy and Collection of Taxes <br /> <br />The Successor Agency has no independent power to levy or collect property taxes. Any <br />reduction in the tax rate or the implementation of any constitutional or legislative property tax <br />decrease could reduce the tax increment available to pay debt service on the 2014 Bonds. <br /> <br />Although delinquencies in the payment of property taxes by the owners of land in the <br />Project Areas, and the impact of bankruptcy proceedings on the ability of taxing agencies to <br />collect property taxes, could have an adverse effect on the Successor Agency’s ability to make <br />timely payments on the 2014 Bonds, the Successor Agency believes any such adverse impact <br />is unlikely in light of the debt service coverage provided by fiscal year 2013-14 net tax <br />increment. See “THE PROJECT AREAS - Projected Available Net Tax Increment and <br />Estimated Debt Service Coverage” for a description of the debt service coverage on the 2014 <br />Bonds. <br /> <br />Bankruptcy and Foreclosure <br /> <br />The payment of the property taxes from which Tax Revenues are derived and the ability <br />of the County to foreclose the lien of a delinquent unpaid tax may be limited by bankruptcy, <br />insolvency, or other laws generally affecting creditors’ rights or by the laws of the State relating <br />to judicial foreclosure. The various legal opinions to be delivered concurrently with the delivery <br />of the 2014 Bonds (including Bond Counsel’s approving legal opinion) will be qualified as to the <br />enforceability of the various legal instruments by bankruptcy, insolvency, reorganization,