Laserfiche WebLink
<br />50 <br />Reduction in Inflationary Rate <br /> <br />As described in greater detail below, Article XIIIA of the State Constitution provides that <br />the full cash value of real property used in determining taxable value may be adjusted from year <br />to year to reflect the inflationary rate, not to exceed a 2% increase for any given year, or may be <br />reduced to reflect a reduction in the consumer price index or comparable local data. Such <br />measure is computed on a calendar year basis. Because Article XIIIA limits inflationary <br />assessed value adjustments to the lesser of the actual inflationary rate or 2%, there have been <br />years in which the assessed values were adjusted by actual inflationary rates, which were less <br />than 2%. <br /> <br />Since Article XIIIA was approved, the annual adjustment for inflation has fallen below the <br />2% limitation several times; in fiscal year 2010-11, the inflationary value adjustment was <br />negative for the first time at -0.237%. Although the fiscal year 2017-18 inflationary value <br />adjustment was 2.00%, the Successor Agency is unable to predict if any adjustments to the full <br />cash value of real property within the Project Area, whether an increase or a reduction, will be <br />realized in the 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 />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 2018 Bonds. <br /> <br />Delinquencies in the payment of property taxes by the owners of land in the Project <br />Area, and the impact of bankruptcy proceedings on the ability of taxing agencies to collect <br />property taxes, could have an adverse effect on the Successor Agency’s ability to make timely <br />payments on the 2018 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 2018 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, <br />155