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Rancho Palos Verdes Redevelopment Agency (Dec 2003) 1 CONSOLIDATED LOAN AGREEMENT This Consolidated Loan Agreement, dated as of December 1, 2003 is made by and between the City of Rancho Palos Verdes (the "City") and the Rancho Palos Verdes Redevelopment Agency(the"Agency"). For and in consideration of the mutual covenants and promises set forth herein, the parties agree as follows. RECITALS This Agreement is entered into with reference to the following facts: A. In furtherance of the objectives of the Redevelopment Law, the Agency has undertaken a program for the redevelopment of blighted areas in the City, and toward this end, has undertaken and is now carrying out the responsibility for the redevelopment of the Project Area pursuant to and in furtherance of the Redevelopment Plan. B. In compliance with all requirements of the Redevelopment Law,the Agency and the City Council adopted the Redevelopment Plan, which provides for the redevelopment of the Project Area by undertaking such actions as may be appropriate to abate the geologic hazards, install a sewer system, and facilitate other improvements in the Project Area. C. Prior to execution of this Agreement, the City previously advanced to the Agency's Portuguese Bend Fund $4,320,552, plus accumulated interest of$4,962,273 as of November 30, 2003, for a total outstanding balance of$9,282,825 as of November 30, 2003. D. Prior to execution of this Agreement, the City previously advanced to the Agency's Abalone Cove Fund $1,597,355, plus accumulated interest of $834,674 as of November 30, 2003, for a total outstanding balance of$2,432,029 as of November 30, 2003,which outstanding balance includes the required ERAF payment for Fiscal Year 2002-03 and administrative and over-head expenses for Fiscal Year 2002-03. E. During Fiscal Year 2003-04, the Redevelopment Law requires redevelopment agencies to pay certain amounts to the county auditor for deposit in the ERAF for the benefit of public schools,with the payment due to the county auditor by May 10, 2004. Redevelopment agencies may be required to make similar ERAF payments in future Fiscal Years. F. During Fiscal Year 2003-04, if a redevelopment agency determines that is unable to make the required ERAF payment, the agency may allocate to the county auditor less than the full required ERAF payment if the agency and city enter into an agreement providing for the city to fund the difference between the amount allocated by the agency and the full amount of the required ERAF payment. R6874\0001\751282.9 1 1 ! 411 G. The Agency has determined that it will be unable in fiscal year 2003-04 to allocate any of the required ERAF payment to the County Auditor. In addition, in the event that the Agency is required to make an ERAF payment in any subsequent Fiscal Year, it is likely that the Agency will be unable to allocate any such future ERAF payments. H. In carrying out the Redevelopment Plan for the Project Area,the Agency is utilizing the staff and other resources of the City. The City Manager of the City serves as Executive Director of the Agency and the staff of the planning and community development department and staff of the engineering and public works department devote substantial time in connection with redevelopment of the Project Area. I. By providing and making available to the Agency the staff and other resources of the City, and by providing and making available to the Agency office space, equipment, supplies, insurance, and other City services and facilities, the City has advanced and will continue to advance the cost of the foregoing to the Agency. J. The City and the Agency desire to enter into this Agreement to acknowledge the foregoing recitals, to provide for the City to advance funds to the County Auditor for ERAF payments, to provide for the City to advance administrative and overhead costs for redevelopment purposes and to provide for an appropriate method of repayment by the Agency for such advances together with funds previously advanced by the City for redevelopment purposes. ARTICLE I DEFINITIONS Section 1.01.Agency. "Agency" means the Rancho Palos Verdes Redevelopment Agency, a body public, corporate, and politic, duly established and authorized to transact business and exercise powers under and pursuant to the provisions of Part 1 of Division 24 of the Health and Safety Code of the State of California, with the power under Section 33601 of the Health and Safety Code to borrow money for any of its corporate purposes. Section 1.02.Abalone Cove Fund. "Abalone Cove Fund" means the accounting entity of the Agency used to account for the geologic abatement and related projects of the Rancho Palos Verdes Redevelopment Agency. Section 1.03.Agreement. "Agreement" means this Consolidated Loan Agreement entered into as of December 1, 2003 between the City and Agency. Section 1.04.Bond. "Bond" means the CI 2651-M, 1915 Act Limited Obligation Improvement Bonds (Abalone Cove) issued by the County in the principal amount of$10,000,000 and repaid upon restructuring of the Bond on November 1, 1997, including the issuance of the RDA Bond as described in Section 1.15 of this Agreement. R6874\0001\751282.9 • Section 1.05.City. "City" means the City of Rancho Palos Verdes, a municipal corporation, organized and existing pursuant to the Constitution and laws of the State of California. Section 1.06.County. "County"means the County of Los Angeles, California. Section 1.07.ERAF. "ERAF"means the Educational Revenue Augmentation Fund. Section 1.08.Fiscal Year. "Fiscal Year" means the fiscal year beginning on July 1st and ending on the next following June 30th. Section 1.09.Housing Fund. "Housing Fund" means the Project Area Low and Moderate Income Housing Fund established pursuant to Section 33334.3 of the Redevelopment Law and held by the Agency. Section 1.10.LAIF. "LAIF" means the Local Agency Investment Fund managed by the State Treasurer pursuant to Section 16429.1 et seq. of the California Government Code. Section 1.11.MOU. "MOU"means the Memorandum of Understanding dated as of November 1, 1997, among the County, the City and the Agency. Section 1.12.Net Tax Increment. "Net Tax Increment"means,for each Fiscal Year, the taxes (including all payments, reimbursements and subventions, if any, specifically attributable to ad valorem taxes lost by reason of tax exemptions and tax rate limitations) eligible for allocation to the Agency pursuant to the Redevelopment Law in connection with the Project Area, excluding the following amounts: (a) amounts, if any, received by the Agency pursuant to Section 16111 of the Government Code; (b) amounts payable to the Consolidated Fire Protection District of Los Angeles County pursuant to Section 8B of that certain Reimbursement and Settlement Agreement dated October 13, 1987 among the County, the Agency and the City; and (c) amounts deposited by the Agency in the Housing Fund pursuant to Section 33334.2 of the Redevelopment Law, as provided in the Redevelopment Plan. Section 1.13.Portuguese Bend Fund. "Portuguese Bend Fund" means the accounting entity of the Agency used to account for the loan to the Portuguese Bend Club Homeowners Association in order that the Association would be able to install a privately owned sewer system and for related projects. Section 1.14.Project Area. "Project Area"means the territory included within Project Area No. 1 of the Agency. R6874\0001\751282.9 - 3 - • Section 1.15. RDA Bond. "RDA Bond" means the tax allocation Bond of the Agency in the principal amount of $5,455,000 issued by the Agency on the Settlement Date for the corporate purposes of the Agency to aid in the financing and refinancing of redevelopment activities of the Agency. Section 1.16. Redevelopment Law. "Redevelopment Law" means the Community Redevelopment Law (California Health and Safety Code Section 33000, et. seq.). Section 1.17.Redevelopment Plan. "Redevelopment Plan" means the Redevelopment Plan for the Project Area, adopted by City Ordinance No. 190, together with any amendments thereof heretofore or hereafter duly enacted pursuant to the Redevelopment Law. Section 1.18.Settlement Date. "Settlement Date"means December 2, 1997. ARTICLE 2 ERAF PAYMENTS Section 2.01.Fiscal Year 2003-2004 ERAF Payment. The State Director of Finance has notified the Agency and the City Council that the Agency's required ERAF payment for fiscal year 2003-04 is $32,878.00. Pursuant to Section 33681.10(d) of the Redevelopment Law, the Agency has determined that it will be unable in the 2003-04 Fiscal Year to allocate any of the required $32,878.00 payment to the County Auditor. The City hereby agrees to pay the sum of$32,878.00 to the County Auditor on or before May 10, 2004. The parties agree that such payment, together with interest thereon, will constitute a loan to the Agency by the City. Subject to the provisions of this Agreement, the Agency agrees to reimburse the City for such loan. Section 2.02.Future ERAF Payments. To the fullest extent allowed by law, the City agrees that if the Agency is required to make an ERAF payment in any subsequent Fiscal Year and the Agency determines that the Agency is unable to make the payment in full, at the request of the Agency the City will pay, on or before the due date for such payment, to the County Auditor the difference between the required ERAF payment and the amount the Agency is able to pay. The parties agree that each such payment by the City, together with interest thereon,will constitute a loan to the Agency by the City. Subject to the provisions of this Agreement, the Agency agrees to reimburse the City for each such loan. ARTICLE 3 ADMINISTRATIVE AND OVERHEAD COSTS Section 3.01.Services and Facilities. The City shall make available to the Agency its staff resources, office space, equipment, supplies, insurance and other services and facilities. The Agency shall have access to the services and facilities of the planning commission, the city engineer and the other departments and offices of the City. The R6874\0001\751282.9 - 4 - parties agree that the sum of the time charges and the fair rental value of office space, equipment, supplies, insurance and other City services and facilities used during a Fiscal Year, as determined by the City Manager in accordance with Section 3.03, below,together with interest thereon, will constitute a loan to the Agency by the City as of August 1st of each subsequent Fiscal Year. Subject to the provisions of this Agreement, the Agency agrees to reimburse the City for each such loan. Section 3.02.Accounting. On or prior to July 1st of each year, each of the department heads shall prepare and submit to the City Manager a detailed accounting of time spent during the immediately preceding Fiscal Year by department personnel on matters for or related to the Agency, the implementation of the overall program for the redevelopment of the Project Area, and any undertaking in furtherance of the Redevelopment Plan by the City,the Agency, or any related or subordinate public entity of the foregoing. Each department head shall also prepare and submit to the City Manager a detailed accounting of the use of all office space, equipment supplies, insurance,and other City services and facilities used by department personnel in connection with time spent on the foregoing. Section 3.03.Calculations of Time Charges and Fair Rental Value. Based upon the foregoing detailed accountings prepared and submitted by each of the department heads,the City Managershaf calculate the total of such personnel time related to redevelopment. The City Manager shall further calculate the total aggregate time spent by all City personnel during such Fiscal Year on all matters, and shall then determine the percentage of time spent on matters related to redevelopment as described above. The City Manager shall further determine the fair rental value of the office space and equipment, and the value of supplies, insurance, and other City services and facilities used during such Fiscal Year. Based upon the percentage of staff time spent on matters related to redevelopment, as calculated above,the City Manager shall determine a fair, reasonable and appropriate rental amount to charge to the Agency for the use thereof during such Fiscal Year. ARTICLE 4 PRIOR LOAN Section 4.01.Prior Loan. As set forth in Paragraphs C and D of the Recitals, prior to the execution of this Agreement, pursuant to prior agreements the City has from time to time loaned money to the Agency in the total sum of $11,714,854, including accrued interest on the unpaid amounts through November 30, 2003 (the "Prior Loan"). The total unpaid amount of $11,714,854 shall constitute the principal of the Prior Loan under this Agreement. The parties desire to modify the terms and conditions governing the repayment by the Agency to the City of the Prior Loan, as set forth herein, and the Agency agrees to repay the City the Prior Loan, together with interest thereon, subject to the provisions of this Agreement. R6874\0001\751282.9 - 5 - . • • ARTICLE 5 REPAYMENT Section 5.01.The Prior Loan. The Prior Loan shall be repaid to the City by the Agency from Net Tax Increment and any legally available revenues of the Agency together with interest compounded on an annual basis computed at a rate calculated as the rate earned on the City's LAIF deposits, plus three percent per annum, (calculated on the basis of a 360-day year of twelve 30-day months) on the unpaid balance thereof from December 1, 2003 to the date of repayment. All unpaid, accrued interest and principal shall be due and payable by November 27, 2034, or such later date established in the Redevelopment Plan as the limit for the repayment of indebtedness. The Agency at its sole option may prepay, without premium or penalty, any amount of the principal of the Prior Loan at any time and from time to time prior to November 27, 2034, or such later date established in the Redevelopment Plan as the limit for the repayment of indebtedness.Any amount so paid shall first be credited against accrued interest and the balance shall be credited against principal. Section 5.02.Future Advances. Moneys hereafter expended by the City pursuant to Article 2 or Article 3 hereof shall constitute a loan (each a "Loan" and collectively the "Loans") by the City to the Agency and shall be repaid to the City by the Agency from Net Tax Increment and any regally available revenues of the Agency together with interest compounded on an annual basis computed at a rate calculated as the rate earned on the City's LAIF deposits, plus three percent per annum, (calculated on the basis of a 360-day year of twelve 30-day months)on the unpaid balance thereof from the date or dates such moneys are expended (with respect to advances pursuant to Article 2)or from each August 1st(with respect to advances pursuant to Article 3)to the date of repayment. All unpaid, accrued interest and principal shall be due and payable by November 27,2034, or such later date established in the Redevelopment Plan as the limit for the repayment of indebtedness. The Agency at its sole option may prepay,without premium or penalty, any amount of the principal of the Loans at any time and from time to time prior to November 27, 2034, or such later date established in the Redevelopment Plan as the limit for the repayment of indebtedness. Any amount so paid shall first be credited against accrued interest and the balance shall be credited against principal. Section 5.03.Validity of Prior Loan and Loans. The validity of the Prior Loans and the Loans hereunder shall not be dependent upon the completion of the Redevelopment Project or upon the performance by any person of its obligation with respect to the Redevelopment Project. Section 5.04.Prior Loan and Loans Subordinate. The obligation of the Agency to repay the Prior Loan and the Loans is subordinate to the payment of the RDA Bond and the unpaid interest on the Bond as of the Settlement Date, all in accordance with the MOU. In addition, the obligation of the Agency to repay the Prior Loan and the Loans may be subordinated to any other bonds, notes or other obligations of the Agency to the extent that the City agrees. R6874\0001\751282.9 - 6 - • Section 5.05.Previous Loans Consolidated. All previous loans made to the Agency by the City are now consolidated and incorporated within this Agreement. This Agreement supersedes all previous loan agreements between the City and Agency. ARTICLE 6 MISCELLANEOUS Section 6.01.Cooperation. The City and Agency agree to take all appropriate steps, execute any documents and cooperate to establish such accounting and other procedures, all as may be necessary, convenient, or desirable under the circumstances to accomplish the purposes and intent of this Agreement. Section 6.02.Records. Each party shall maintain books and records regarding its duties pursuant to this Agreement. Such books and records shall be available for inspection by the officers and agents of the other party at all reasonable times. Section 6.03.Law Governing. This Agreement is made in the State of California under the Constitution and laws of the State of California, and is to be so construed. Section 6.04.Amendments. This Agreement may be amended at any time, and from time to time, by an agreement executed by both parties to this Agreement. Section 6.05.Non Liability of Officials and Employees. No Agency member, Council member, and no official, agent, or employee of the Agency or the City shall be personally liable to the other party, or any successor in interest, in the event of any default or breach by the Agency or the City, or for any amount which may become due to the City or Agency, or successor, or on any obligation sunder the terms of this Agreement. R6874\0001\751282.9 - 7 - •• IN WITNESS HEREOF THE PARTIES HAVE CAUSED THIS AGREEMENT TO BE EXECUTED. CITY 0 CHO PA OS VERDES By 4411‘ Mayor ATTEST: , , Cit ler RANCHO PALOS VERDES REDEVELOPMENT AGENCY By Acgrcy Chairperson ATTEST: A ency Secretary R6874\0001\751282.9 - 8 -