County of Los Angeles County Improvement No 2651-M (Abalone Cove) Memorandum of Understanding •
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MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding ("MOU") is dated for reference purposes as
of November 1, 1997, by and among the COUNTY OF LOS ANGELES (the "County"),
the CITY OF RANCHO PALOS VERDES (the "City"), and the RANCHO PALOS
VERDES REDEVELOPMENT AGENCY (the "RDA").
Section 1. Background and Purpose.
(A) The County has heretofore undertaken proceedings under the Municipal
Improvement Act of 1913 (being Division 12 of the Streets and Highways Code), to
form County Improvement No. 2651-M (Abalone Cove), and to levy deferred benefit
assessments therein (the "Assessments"), in order to finance certain landslide
mitigation facilities within the Abalone Cove and Portuguese Bend areas of the City
(the "Improvements").
(B) Pursuant to the Improvement Bond Act of 1915 (being Division 10 of the
Streets and Highways Code), on July 26, 1991, the County issued $10,000,000
aggregate principal amount of its CI 2651-M, 1915 Act Limited Obligation Improvement
Bonds (Abalone Cove) (the "Bond"). The Bond bears interest at the rate of 7.7654%
per annum. The $10,000,000 proceeds of the Bond were paid to the RDA to finance
landslide mitigation measures in accordance with the Settlement Agreement (defined
below).
(C) The County, the City and the RDA desire to restructure the $10,000,000
debt, so that reliance on private property assessments is eliminated. This MOU
provides for cancellation of the Bond and elimination of the Assessments, and
elimination of the burden on the taxpayers represented by the Assessments and the
Bond.
Section 2. Issuance of RDA Bond. On December 2, 1997 (the "Settlement
Date"), the RDA shall issue (or cause to be issued) to the order of the County a bond in
the aggregate principal amount of$5,455,000 (the "RDA Bond"). The RDA Bond may
be issued by the RDA or by a joint powers authority to which the RDA is a party,
provided the RDA Bond has the characteristics described in this Section 2.
The RDA Bond shall be directly or indirectly secured by, and payable from, all
incremental property tax revenues allocated and paid to the RDA pursuant to California
Health and Safety Code §33670(b) (the "Tax Increment"), net of tax revenues required
to be set aside for housing purposes pursuant to California Health and Safety Code
§33334.2, and tax revenues paid to the Consolidated Fire Protection District of Los
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Angeles County (the "Net Tax Increment"), on a first priority basis. The RDA shall not
issue any bonds, notes or evidences of indebtedness payable from the Net Tax
Increment, or otherwise suffer to exist or be created any charge upon the Net Tax
Increment, except on a basis which is expressly subordinated to the payment of the
RDA Bond and the interest thereon and payments made pursuant to Section 3(B),
below. Notwithstanding the foregoing, principal of and interest on the RDA Bond may
be paid from any lawfully available source of funds, at the option of the issuer thereof.
The principal amount of the RDA Bond shall mature in installments on each
December 2, commencing December 2, 2004, in accordance with the debt service
schedule attached hereto as Exhibit A. Interest will continue to accrue on any
installment of principal which is not paid when due, as provided in the next paragraph.
Interest shall accrue with respect to the unpaid principal amount of the RDA
Bond at the rate of five percent (5%) per annum, calculated on the basis of a 360-day
year comprised of twelve 30-day months, and shall be payable in arrears on each
June 2 and December 2, commencing June 2, 1998. In the event any installment of
interest is not paid when due, such amount shall remain due and payable from the next
available Net Tax Increment or any other lawfully available funds of the issuer until paid
in full.
All payments on the RDA Bond shall be applied first to accrued and unpaid
interest and thereafter to principal. The RDA Bond shall be a negotiable instrument
issued in fully registered form.
Concurrently with the issuance of the RDA Bond, the RDA shall deliver to the
County an opinion of counsel (which may be counsel to the City or the RDA),
addressed to the County and dated the Settlement Date, to the effect that the RDA
Bond is a legal, valid and binding obligation of the issuer thereof, enforceable in
accordance with its terms, subject only to such exceptions and qualifications as are
acceptable to the County in its sole discretion exercised reasonably.
Section 3. Additional Payments.
(A) On the Settlement Date the RDA shall cause a cash payment to be made to
the County in the amount of$4,545,000.
(B) On December 3 of each year, after the payment of all principal of and
interest on the RDA Bond theretofore becoming due and payable, the County shall
retain for its own account (as provided in Section 6 below), all remaining Net Tax
Increment until the County shall have received an aggregate amount of$3,111,400,
without interest. Such amount represents unpaid interest on the Bond as of the
Settlement Date.
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Section 4. Cancellation of Bond and Elimination of Assessments. If the RDA
shall have performed all of its obligations under Section 2 and Section 3(A), then on the
Settlement Date the County shall cancel the Bond and thereafter take all necessary or
appropriate action to eliminate the Assessments and remove the lien thereof. Interest
on the Bond shall cease to accrue on the Settlement Date (or the date of issuance of
the RDA Bond, if different).
Section 5. Deferral of Pass-Through Amounts. To the extent necessary to pay
principal and/or interest on the RDA Bond and to satisfy the amount due to the County
pursuant to Section 3(B) above, the County shall defer its receipt of Tax Increment it
would otherwise receive pursuant to Section 8(C) of that certain Reimbursement and
Settlement Agreement dated October 13, 1987, among the County, the RDA and the
City (the "Settlement Agreement"). The deferral provided for in this section is in
addition to the deferrals provided for under Section 8(C) of the Settlement Agreement.
The RDA may request a deferral under this section or Section 8(C) of the Settlement
Agreement by delivering such request in writing to the County's Auditor-Controller.
Section 6. Intercept Procedures. At the time of each allocation of property tax
revenues, the Auditor-Controller of the County (the "Auditor-Controller") shall segregate
all Tax Increment for deposit to a special account held by the Auditor-Controller (the
"Tax Increment Account"). The Auditor-Controller shall pay to the RDA from the Tax
Increment Account the amount required to be set aside for housing purposes pursuant
to California Health and Safety Code §33334.2, and shall thereafter set aside and
disburse from the Tax Increment Account and pay when due the following amounts in
the indicated order of priority: (i) all amounts payable to the Consolidated Fire
Protection District of Los Angeles County ("CPPD") under Section 8(B) of the
Settlement Agreement; (ii) all amounts required to be paid with respect to the RDA
Bond prior to the next December 3 (including pass-through amounts deferred for this
purpose under Section 5); (iii) all amounts permitted to be retained by the County under
Section 3(B) of this MOU (including pass-through amounts deferred for this purpose
under Section 5); (iv) to the RDA, all deferrals requested by the RDA of Tax Increment
which would otherwise be passed through to the County pursuant to Section 8(C) of the
Settlement Agreement; (v) all amounts payable to the County under Section 8(C) of the
Settlement Agreement (except to the extent the County has deferred receipt of Tax
Increment pursuant to the Settlement Agreement or Section 5 above); and (vi) Tax
Increment payable to the County under Section 8(C) of the Settlement Agreement, the
receipt of which was deferred pursuant to the Settlement Agreement or Section 5 of this
MOU. The Auditor-Controller shall set aside and disburse tax increment pursuant to
each clause in the preceding sentence only after the set-aside required under each
prior clause has been satisfied.
On each December 15, after the foregoing payments have been satisfied, the
Auditor-Controller shall transfer any balance remaining in the Tax Increment Account to
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or upon the order of the RDA. After the payment in full of the RDA Bond and the
amount described in Section 3(B), and all deferred Tax Increment payable to the
County pursuant to Section 8(C) of the Settlement Agreement, the County shall
disburse Tax Increment to the RDA (and the County and CFPD pursuant to the
Settlement Agreement) at the times and in the manner as is customary with other
redevelopment agencies in the County.
Section 7. Further Assurances. Each party hereto agrees to take such actions,
and to execute such certificates and other instruments, as may be necessary or
appropriate to give effect to and carry out the provisions of this MOU.
Without limiting the foregoing, the RDA and the City shall cooperate with the
County and furnish such financial or other information as may be reasonably requested
by the County to facilitate a sale by the County of the RDA Bond.
Section 8. Integration Clause. This MOU shall supersede any previous or
contemporaneous oral or written agreements or understandings between the parties
hereto with respect to the subject matter hereof, and to the extent of any conflict or
inconsistency this MOU shall control. Nothing in this MOU is intended, or shall be
construed, to amend or supersede any provision of the Settlement Agreement.
Section 9. Assumption of Liability Agreement. The Assumption of Liability
Agreement executed by the County and the RDA and approved by the Board of
Supervisors on December 27, 1977, and the Assumption of Liability Agreement
executed by the County and the City and approved by the Board of Supervisors on
November 14, 1977 are hereby expressly not applicable to this MOU.
Section 10. Indemnity. The RDA agrees to defend, indemnify and hold
harmless the County, its officers, employees and agents, from and against any loss,
cost, damage, claim, expense or liability, including attorney fees and costs, if any,
arising out of, as a result of, or in connection with any acts and/or omissions by the
RDA or its officers, employees and agents with respect to the financing, design,
construction, operation and/or maintenance of any landslide abatement, mitigation
and/or monitoring measures for the Abalone Cove Landslide Area. As used herein, the
term "Abalone Cove Landslide Area" means those areas within the boundaries of
County Improvement District No. 2651-M, as said district existed on October 1, 1997.
Section 11. General Provisions.
(A) Section headings are for reference purposes only and shall not affect the
meaning or interpretation of this MOU. Unless the context clearly requires otherwise,
words of the masculine gender include correlative words of the feminine and neuter
genders, and words in the singular include the plural and vice-versa.
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(B) The terms of this MOU and the language thereof are the joint product of all
of the parties hereto and shall not be construed against any party in the event litigation
be brought respecting the meaning or enforcement of any term.
(C) This MOU is not intended to, and does not, create any rights in any person
other than the parties hereto.
(D) This MOU may be executed in counterparts. Each counterpart shall be
deemed an original and, when taken together with other signed counterparts, shall
constitute one MOU, which shall be binding and effective as to all parties.
(E) Any of the time deadlines specified in this MOU may be extended by mutual
written consent of the parties. The City and RDA, respectively, authorize the City
Manager and Chairman, and the County authorizes the Chief Administrative Officer, to
agree to any such time extensions on their behalf.
IN WITNESS WHEREOF, the County, the City and the RDA have caused this
MOU to be executed by their respective officers thereunto duly authorized as of the
date first above written.
COUNTY OF LOS ANGELES CITY OF RANCHO PALOS VERDES
- . i By: C f, °
P A. r 41 Ail% AlAt.
Chairma oard of Supervis� • a or wpre/y
APPROVED AS TO FORM: APPROVED AS TO FORM:
DE WITT W. CLINTON, _-
County
County Counsel By: ....
'1:VP."( - L s- ,.. City Attorney
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ATTEST:JOANNE STURGES '
EXECUTIVE OFFICER-
CLERK OF THE BOARD OF SUPERVISORS 0 , i (.)Oik,
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EXHIBIT A
RDA Bond - Debt Service Schedule and Section 3(B) Payments
RDA Bond Payments
Date Principal Interest Total Payment
06-2-98 $136,3751 $136,375
12-2-98 $136,375 $136,375
06-2-99 $136,375 $136,375
12-2-99 $136,375 $136,375
06-2-00 $136,375 $136,375
12-2-00 $136,375 $136,375
06-2-01 $136,375 $136,375
12-2-01 $136,375 $136,375
06-2-02 $136,375 $136,375
12-2-02 $136,375 $136,375
06-2-03 $136,375 $136,375
12-2-03 $136,375 $136,375
06-2-04 $136,375 $136,375
12-2-04 $5,000 $136,375 $141,375
06-2-05 $136,250 $136,250
12-2-05 $15,000 $136,250 $151,250
06-2-06 $135,875 $135,875
12-2-06 $25,000 $135,875 $160,875
06-2-07 $135,250 $135,250
12-2-07 $40,000 $135,250 $175,250
06-2-08 $134,250 $134,250
12-2-08 $55,000 $134,250 $189,250
06-2-09 $133,875 $133,875
12-2-09 $65,000 $133,875 $198,875
06-2-10 $131,250 $131,250
12-2-10 $85,000 $131,250 $216,250
06-2-11 $129,125 $129,125
12-2-11 $100,000 $129,125 $229,125
06-2-12 $126,625 $126,625
12-2-12 $120,000 $126,625 $246,625
06-2-13 $123,625 $123,625
'The first interest payment assumes issuance of the RDA Bond on the
Settlement Date. If the RDA Bond is not issued on the Settlement Date, the first
interest payment will be recalculated from the actual date of issue.
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12-2-13 $135,000 $123,625 $258,625
06-2-14 $120,250 $120,250
12-2-14 $155,000 $120,250 $275,250
06-2-15 $116,375 $116,375
12-2-15 $180,000 $116,375 $296,375
06-2-16 $111,875 $111,875
12-2-16 $200,000 $111,875 $311,875
06-2-17 $106,875 $106,875
12-2-17 $230,000 $106,875 $336,875
06-2-18 $101,125 $101,125
12-2-18 $255,000 $101,125 $356,125
06-2-19 $94,750 $94,750
12-2-19 $280,000 $94,750 $374,750
06-2-20 $87,750 $87,750
12-2-20 $310,000 $87,750 $397,750
06-2-21 $80,000 $80,000
12-2-21 $345,000 $80,000 $425,000
06-2-22 $71,375 $71,375
12-2-22 $380,000 $71,375 $451,375
06-2-23 $61,875 $61,875
12-2-23 $415,000 $61,875 $476,875
06-2-24 $51,500 $51,500
12-2-24 $450,000 $51,500 $501,500
06-2-25 $40,250 $40,250
12-2-25 $495,000 $40,250 $535,250
06-2-26 $27,875 $27,875
12-2-26 $535,000 $27,875 $562,875
06-2-27 $14,500 $14,500
12-2-27 $580,000 $14,500 $594,500
Section 3(B) Deferred Interest
This sum of$3,111,4002 will be payable from Tax Increment as the same becomes
available, as provided in clause (iii) of the first paragraph of Section 6 of this MOU.
mjs18:rpvmou.fnl
2The deferred interest calculation assumes issuance of the RDA Bond and
cancellation of the existing Bond on the Settlement Date. If the RDA Bond is issued,
and the existing Bond cancelled, on a different date, deferred interest will be
recalculated to of the actual date of cancellation of the existing Bond.
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