12-13-2011 CC RPT 39 - Laserfiche WebLink

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Redevelopment Agency Memorandum TO: HONORABLE MAYOR AND AGENCY MEMBERS DATE: December 13, 2011 FROM: OFFICE OF THE CITY MANAGER – FINANCE ITEM NO: DEVELOPMENT DEPARTMENT WARD: All SUBJECT: REIMBURSEMENT RESOLUTIONS FOR 2011 TAX ALLOCATION BOND- FUNDED PROJECTS ISSUE The issue before the Redevelopment Agency is whether to adopt reimbursement resolutions associated with projects currently funded by or anticipated to be funded by the Redevelopment Agency’s 2011 tax allocation bond issuance. RECOMMENDATION That the Redevelopment Agency adopt the attached Treasury Regulation Section 1.150-2 Reimbursement Resolutions (Exhibit A) to allow for repayment of qualified expenditures from future tax-exempt bond proceeds. BACKGROUND On March 1, 2011, the Redevelopment Agency adopted resolutions authorizing the issuance of up to $90,400,000 of tax allocation bonds through the Riverside Public Financing Authority. Concurrently the Redevelopment Agency adopted reimbursement resolutions for certain projects to be funded from the proceeds of the bond issuance. On March 8, 2011, the previously-authorized tax allocation bonds were issued in the amount of $65,000,000. Following a careful evaluation of the Redevelopment Agency’s funding needs it was determined that the full $65,000,000 would not be needed in the near term. Accordingly, on June 16, 2011, $31,700,000 of the outstanding bonds were called using unspent bond proceeds on hand. The remaining balance outstanding totals $33,300,000. The 2011 tax allocation bonds were privately placed in the City’s investment pool in lieu of placement with a private investor or being sold in the bond market. This facilitated paying a lower interest rate of 5%, which was below the rate that the market would have demanded at the time but represented a premium over what the City’s other investments were earning at the time. As a result, the Redevelopment Agency has achieved a lower cost of borrowing while the City has earned a