(13)AR 091807 Rancho Mill Revelopment Area

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Report to Redevelopment Agency Board regarding Rancho Mill Loan Agreement Page 2 of 3 ■ South side of Olive from Railroad tracks to 7th ■ Oak from 7th to La Cadena ■ Citrus from Pennsylvania to Bryn Mar ■ Acacia west of Pennsylvania to end of street DISCUSSION/ANALYSIS On August 21, the Agency Board designated a financing team to review the Agency's five active project areas and determine what amount of new monies could be derived from a bond issuance. Work has begun on that process, but is not expected to be completed until the end of this calendar year or early next calendar year. Given the Agency has repaid the 2003 Loan and it is not yet in a position to issue debt, staff is recommending that the Agency Board and City Council authorize another loan that will ensure the Agency continues to have funds available to conduct redevelopment activities within the Rancho/Mill Project Area. This loan will be included in the overall debt issuance discussion. Projects for use of the new loan have not yet been identified, although several opportunities exist and are being evaluated. Once a list of eligible projects and their estimated costs has been prepared, an item will be brought back for Agency Board consideration. FINANCIAL IMPACT The City's Traffic Impact Fees Fund has funds available to loan the Agency the $500,000, which will be repaid within a maximum of 4 years at a rate consistent with the current LAIF rate. The Agency can also elect to repay the Traffic Impact Fees Fund sooner in the event the Agency is able to issue bonds for this project area. The Agency will make annual payments to the City. The first payment will be for six (6) months on January 1, 2008 during fiscal year 2007-2008 year which will require a budget adjustment in the amount of $69,400.88 which represents $56,943.18 in principal to account number 872-9000-9500-2500 and $12,457.70 in interest to account number 872-9000-9500- 2510. Remaining annual payments will be on July 1 of each year and ending on December 1, 2011. ENVIRONMENTAL IMPACT There is no environmental impact associated with this item. An environmental review will be conducted for the projects as they are identified. CONFLICT OF INTEREST — Gift Disclosure Requirements None CONSISTENCY WITH IMPLEMENTATION PLAN Creation of debt will allow the Agency to implement the goals and objectives outlined in Section 3.9 of its Implementation Plan, which refers to the Rancho Mill Project Area. UAdministration\Meetings\2007 Meetings\September 18, 2007\Loan Agreement Will Staff Report 091807 final cc.doc