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a• <br /> dO • 4.02... 7, (goo <br /> MEMORANDUM RANCHO PALOS VERDES <br /> TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL <br /> FROM: DENNIS MCLEAN, FINANCE DIRECTOR <br /> DATE: JULY 5, 2000 <br /> SUBJECT: LOAN AGREEMENT BETWEEN THE CITY AND RDA <br /> RECOMMENDATION: <br /> Authorize the Mayor and City Clerk to execute the attached Loan Agreement between the City <br /> and the Rancho Palos Verdes Redevelopment Agency. <br /> BACKGROUND AND ANALYSIS: <br /> Abalone Cove Fund Financing <br /> The Abalone Cove landslide abatement project of the Redevelopment Agency was initially <br /> financed by the issuance of$10 million of County Improvement District Bonds (the "Bonds") in <br /> 1991. The Bonds were issued as part of the Reimbursement and Settlement(Horan)Agreement <br /> entered into between the County, City, Agency and the Horan litigants in 1987. After payment <br /> of amounts owed the County and the City, approximately$6.7 million of net bond proceeds were <br /> transferred to the Agency's Abalone Cove fund in 1991 to finance landslide abatement projects. <br /> Under the terms of the bond restructuring in 1997, the Bonds were repaid by the Agency's <br /> issuance of $5,455,000 of tax allocation bonds (the "1997 RDA Bonds") and a lump sum <br /> payment of $4,545,000 to the County. The lump sum payment was funded with $2 million of <br /> accumulated tax increment, $1 million of fund reserves from the Abalone Cove fund and a loan <br /> to the Abalone Cove fund by the City in the amount of$1,545,000. <br /> The original RDA bond proceeds have financed landslide abatement projects in the Abalone <br /> Cove area. It is anticipated that the Abalone Cove fund balance will be approximately $4.5 <br /> Million as of June 30, 2000, with the full amount expected to be expended during FY 2000-01. <br /> However, no additional advances are anticipated to be made by the City to the Abalone Cove <br /> fund during FY 2000-01 or anytime thereafter. <br /> The City and the Agency previously entered into a Loan Agreement when the City advanced <br /> $1,545,000 to the Abalone Cove fund as a part of the 1997 bond restructuring. The original loan <br /> agreement was dated November 30, 1997 and has been amended annually to consolidate the <br /> loan for accrued (unpaid) interest. With accrued interest of$365,462 through June 30, 2000, <br /> the total amount owed to the City by the Abalone Cove fund of the Agency is $1,910,462 as of <br /> June 30, 2000. If interest rates are consistent with the prior year, total accrued interest will be <br /> $531,673 at June 30, 2001, and the total amount owed the City by the Abalone Cove fund will <br /> be $2,076,673 at June 30, 2001. <br />