2013-15 -� RESOLUTION 2013 - 15 SA
A RESOLUTION OF THE SUCCESSOR AGENCY TO THE FORMER
GRAND TERRACE REDEVELOPMENT AGENCY IN SUPPORT OF
ASSEMBLY BILL 981, RELATING TO THE USE OF BOND PROCEEDS
ISSUED IN 2011 BY FORMER REDEVELOPMENT AGENCIES.
WHEREAS, the State Legislature dissolved redevelopment agencies by enacting
Assembly Bill Nos. 1x 26 and 1484, relating to redevelopment dissolution, ("Dissolution
Statutes") which became effective on June 28, 2011 and June 27, 2012, respectively;
WHEREAS, the Community Redevelopment Agency of the City of Grand Terrace
("former-RDA") issued bonds for the purpose of redevelopment on June 17, 2011
pursuant to existing law at the time of issuance ("2011 Bonds");
WHEREAS, the covenants relating to the 2011 Bonds required the bond proceeds
received therefrom to be used for the specific purpose of any or all of the following
public infrastructure projects:
Southwest area: infrastructure study and design
Southwest area: infrastructure construction
Barton Road: infrastructure improvements
Michigan Street improvements: design and right-of-way acquisition
Michigan Street improvements: construction
Union Pacific/Barton Road bridge: construction
Van Buren, Pico, and Main Streets: storm drain and street rehabilitation
Mt. Vernon Avenue: slope stabilization
Vista Grande Park: construction
WHEREAS, the California Department of Finance ("DOF") has incorrectly interpreted
the Dissolution Statutes to prohibit the use of those proceeds derived from the 2011
Bonds for the purposes for which they were issued and has improperly directed the
Successor Agency for the Grand Terrace Redevelopment Agency ("Successor Agency")
to defease or repurchase the 2011 Bonds on the open market ("Directive");
WHEREAS, even if the DOF's interpretation did not expressly conflict with Dissolution
Statutes, the DOF has not provided any meaningful guidance on how to adequately
follow the Directive;
WHEREAS, compliance with the Directive could result in the default by the Successor
Agency on its legal obligations under the 2011 Bonds;
WHEREAS, complying with the Directive will result in harm to holders of the bonds, and
particularly those who purchased tax exempt bonds, because compliance with the
Directive will cause interest payments to become taxable to bondholders;
WHEREAS, the City of Grand Terrace ("City") and Successor Agency disagree with the
Directive and continues to assert that the use of proceeds derived from the 2011 Bonds
is permissible under current law;
WHEREAS, the City and Successor Agency therefore continues to assert that the 2011
Bonds issued prior to June 28, 2011 are enforceable obligations, as defined by the
Dissolution Statutes, and the proceeds derived therefrom must be used pursuant to the
2011 Bond covenants;
WHEREAS, the Successor Agency believes that Assembly Bill Number 981 could
alleviate concerns of downgrading of the State's and local municipalities' bond credit
ratings by various bond rating companies;
WHEREAS, the Successor Agency defaulting on the 2011 Bonds is not beneficial to the
Taxing Entities, which include, but is not limited to, the City of Grand Terrace and other
local agencies, as defined under the Dissolution Statutes;
WHEREAS, the Taxing Entities will not benefit in any way by the Directive or by the
defeasance or repurchase of the 2011 bonds because interest payments on those
bonds will continue to accrue for many years before defeasance can occur and will far
exceed any interest earnings on unused proceeds;
WHEREAS, allowing the bonds to be expended for the purposes for which they were
issued will benefit all the Taxing Entities by creating or improving infrastructure,
affordable housing, and other essential projects that will in turn increase property tax
values and revenues available to all Taxing Entities;
WHEREAS, the expenditure of the proceeds derived from the 2011 Bonds for the
purposes for which they were issued is beneficial to the community that formed the
former-RDA, the Taxing Entities as defined under the Dissolution Statutes, and to the
State of California as a whole;
WHEREAS, the Successor Agency supports Assembly Bill No. 981 ("AB 981") because
it would clarify the Legislature's intent to allow the Successor Agency to use the
proceeds derived from the 2011 Bonds for the purposes for which they were issued and
resolve the dispute between the DOF and Successor Agency regarding the 2011 Bonds
to the benefit of the State and the Taxing Entities;
WHEREAS, the Successor Agency desires to express its support of AB 981 and urge
its passage by the State Legislature and approval by the Governor.
NOW THEREFORE, BE IT RESOLVED THAT THE GRAND TERRACE CITY
COUNCIL, ACTING AS THE SUCCESSOR AGNECY, DOES RESOLVE,
DETERMINE, FIND AND ORDER AS FOLLOWS:
Section 1. The Successor Agency hereby finds that all of the above recitals are true
and correct and are incorporated herein by reference.
Section 2. The Successor Agency hereby determines and resolves to support and
encourage the passage of AB 981, which would operate to clarify the Legislature's
intent to allow the Successor Agency to expend those proceeds derived from the 2011
Bonds for the purpose they were issued, under the Dissolution Statutes.
Section 3. The Successor Agency hereby determines and resolves to support and
encourage the Governor to sign AB 981 into law.
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Section 4. The Successor Agency hereby authorizes the Executive Director to take
all actions necessary and required to carry out this Resolution. This authorization
includes, but is not limited to, sending a letter in support of AB 981 to the State
Legislature, its members, and committees; sending a letter in support of AB 981 to the
Governor; contacting the relevant Taxing Entities for the purpose of seeking their
support; and contacting other affected successor agencies to coordinate efforts to
support AB 981.
PASSED, APPROVED AND ADOPTED by the Successor Agency for the Grand
Terrace Redevelopment Agency at a regular meeting held on the 26t" day of March,
2013.
Chair of the Successor Agency for the
Community Redevelopment Agency of
the City of Grand Terrace
ATTEST:
Agency Sec tary
TRACEY R. MARTINEZ, AGENCY SECRETARY of the Successor Agency for the
Community Redevelopment Agency of the City of Grand Terrace, do hereby certify that
the foregoing Resolution was introduced and adopted at a regular meeting of the
Successor Agency Board of the Successor Agency for the Community Redevelopment
Agency of the City of Grand Terrace held on the 26th day of March, 2013 by the
following vote:
AYES: Board Members McNaboe, Mitchell and Robles; Vice-Chairman Sandoval and
Chairman Stanckiewitz
NOES: None
ABSENT: None
ABSTAIN: None
Tracey R. M rtinez, Agency S cr ry
APPROVED AS TO FORM
Successor Agency Counsel
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