HomeMy WebLinkAboutMaterials Distributed at Meetingl
CITY OF ARCADIA
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PROPOSITION ROGRAM R RITIZATION
SUSPENSION OF PROPOSITION lA
As part of the 2009 -10 budget package on July
281 2009, the state will borrow 8% of the
City's apportioned property tax revenue. It is
estimated to be $1,242,012 for our City per
Los Angeles County's calculation. The state
will be required to repay those obligations plus
2% of interest by June 30 2013.
f� OPTIONS AVAILABLE TO THE CITY
1) Participate in the Securitization Program
Receive half of suspended amount on January 15, 2010
Receive remaining half on May 3, 2010
Z) Choose not Participate in the Securitization
Program
- Forego property tax revenues (8% of prior year taxes allocated
and collected) for 2009 -10
Receive withheld property tax repayment plus interest from the
state between June 6 and June 13, 2013
Interest rate has been set at 2%
3) sell Receivable to another Local Agency
The market for local agencies purchasing other agency
receivables may be limited
State
California
Communities
(Issuer)
Trustee
Bondholders
• California Communities is the only issuer authorized to sell bonds
to finance the State's obligation to repay the property tax
payments
• State's obligation to repay the 8% property tax borrowing is the
only security pledge for the repayment of the bonds
• Each participating local agency will sell their state repayment
obligation to California Communities
• California Communities will issue tax- exempt bonds and provide
each local agency with the cash proceeds in two equal
installments, on January 15, 2010 and May 3, 2010 (to
coincide with the dates that the State will be shifting property tax
from local agencies)
• The purchase price paid to the local agencies will equal
p the property tax reduction
100 /o of the amount of p p Y
• No cost to participating local agencies as all interest and
issuance costs will be paid by the state
• Participating local agencies will have no obligation on the
bonds and no credit exposure to the State
• Bondholders will be paid principal and interest by the State
on the bonds' interest payment dates and at maturity
• The bonds will mature between June 6 and 13, 2013
y PROGRAM TIMELINE
!, Date Event
Friday, November 6, 2009 Signed Participant documents
Final Commitment date for Participating Local
Agencies
Tuesday, November 10,
2009
Thursday, November 19,
2009
Friday, January 15, 2010
Monday, May 3, 2010
Pricing
Closing
Local Agencies Receive Funds
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