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CITY OF SAN LEANDRO <br />STAFF REPORT <br />DATE: <br />TO: <br />FROM: <br />BY: <br />October 19, 2009 <br />APPROVED AND <br />FORWARDED <br />TO CITY COUNCII, <br />Stephen Hollister, <br />City Manager <br />Stephen Hollister, City Manager <br />Perry Carter, Interim Finance Director" <br />Mary Ann Perini, Budget & Compliance Manager 1`~ <br />SUBJECT PROJECT/PROJECT DESCRIPTION: <br />A RESOLUTION APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION <br />AND DELIVERY OF A PURCHASE AND SALE AGREEMENT AND RELATED <br />DOCUMENTS WITH RESPECT TO THE SALE OF THE SELLER'S PROPOSITION lA <br />RECEIVABLE FROM THE STATE; AND DIRECTING AND AUTHORIZING CERTAIN <br />OTHER ACTIONS IN CONNECTION THEREWITH. <br />SUMMARY AND RECOMMENDATION <br />Staff recommends City Council approval of the form of and the execution and delivery of a <br />purchase and sale agreement and related documents with respect to the sale of the City of San <br />Leandro's (Seller's) Proposition lA receivable from the State and directing and authorizing <br />certain other actions in connection with the Proposition lA Securitization Program. <br />BACKGROUND <br />Proposition lA Suspension: Proposition lA was passed by California voters in 2004 to ensure <br />local property tax and sales tax revenues remain with local government thereby safeguarding <br />funding for public safety, health, libraries, parks, and other local services. Provisions can only <br />be suspended if the Governor declares a fiscal necessity and two-thirds of the Legislature concur. <br />The emergency suspension of Proposition lA was passed by the Legislature and signed by the <br />Governor as ABX4 14 and ABX4 15 as part of the 2009-10 budget package on July 28, 2009. <br />Under the provision, the State will borrow 8% of the amount of property tax revenue apportioned <br />to cities, counties and special districts. The state will be required to repay those obligations plus <br />interest by June 30, 2013. <br />The legislature is currently reviewing aclean-up bill, SB67 which would provide for a few <br />critical changes to the enacted legislation, including but not limited to providing for: financing to <br />occur in November; county auditor certification of amount of Prop lA receivable; tax-exempt <br />structure; California Communities as the only issuer; more flexibility on bond structure (interest <br />payments, state payment date and redemption features); sales among local agencies; and revision <br />to the hardship mechanism. While SB 67 has not yet been passed and signed into law, California <br />