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HomeMy WebLinkAboutRCPDFA Lease Revenue Bonds/Res 553PALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: APPROVAL OF RESOLUTION NO. 553 OF THE PALM DESERT REDEVELOPMENT AGENCY APPROVING AS TO FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF AN IMPLEMENTATION AGREEMENT AND A LETTER AGREEMENT WITH THE COUNTY OF RIVERSIDE AND APPROVING CERTAIN RELATED ACTIONS SUBMITTED BY: DAVID YRIGOYEN, DIRECTOR OF REDEVELOPMENT/HOUSING DATE: OCTOBER 23, 2008 CONTENTS: (1) AGENCY RESOLUTION NO. 553 (2) IMPLEMENTATION AGREEMENT (3) LETTER AGREEMENT Recommendation: By Minute Motion, that the Palm Desert Redevelopment Agency: 1. Adopt Resolution No. 553, approving and authorizing the execution and delivery of an Implementation Agreement and the acceptance of a Letter Agreement in connection with the proposed issuance of Riverside County Palm Desert Financing Authority Lease Revenue Bonds (County Facilities Projects), 2008 Series A (the "2008 RCPDFA Bonds"). Executive Summary: Adoption of the attached resolution will provide approval for the execution and delivery of an Implementation Agreement and the acceptance of a letter agreement (the "Letter Agreement") between the County of Riverside (the "County") and the Agency to facilitate the issuance of the 2008 RCPDFA Bonds. A portion of the proceeds of the 2008 RCPDFA Bonds will be used to finance the construction of a new sheriff station in the City of Palm Desert and other County capital projects. Background and Discussion: Staff recommends the adoption of the attached resolution to facilitate the issuance of the 2008 RCPDFA Bonds. The Agency previously approved the sale of property in Project Area No. 2 to the County in connection with the construction of a new sheriff station pursuant to a Cooperative Agreement between the County and the Agency. The new G:\rda\Arla Scott\Word Files\Staff Repts\RCPDFA - Agency reso staff report.doc Staff Report Adoption of Agency Resolution No. 553 approving Implementation Agreement and Letter Agreement with the County of Riverside Page 2 of 3 October 23, 2008 sheriff station will replace the existing sheriff facility located at 73-520 Fred Waring Drive. The Cooperative Agreement contemplates that the County will finance the construction of the new sheriff station using proceeds from bonds issued by the Riverside County Palm Desert Financing Authority ("RCPDFA"). Proceeds of the proposed 2008 RCPDFA Bonds will be used to finance the construction of the new sheriff station and other County capital projects. The 2008 RCPDFA Bonds will be lease revenue bonds secured by rental payments to be made by the County under a Sublease between the County and RCPDFA. The County intends to use available moneys from the County Capital Improvement Fund to pay the rental payments. The County Capital Improvement Fund was established under a 1992 agreement (the "1992 Pass -Through Agreement") among the County, the City and the Agency regarding pass -through payments relating to the Agency's Project Area No. 3 and the Added Territory of Project Area No. 1. Each year, the Agency deposits a portion of the pass -through payments into the County Capital Improvement Fund. The Agency holds and maintains the County Capital Improvement Fund, but the County may direct the disbursement of the moneys deposited in the County Capital Improvement Fund in accordance with the 1992 Pass -Through Agreement. In recent years, moneys in the County Capital Improvement Fund have been used to pay debt service relating to (i) a portion of outstanding Agency bonded debt that is attributable to the financing of the existing sheriff facility at 73-520 Fred Waring Drive (the "Agency Sheriff Station Bonds"), (ii) bonds issued by RCPDFA in 2003 (the "2003 RCPDFA Bonds"), and (iii) other County bond obligations pursuant to County's requests. Together, the Implementation Agreement and the Letter Agreement (the "Agreements"), clarify the priority of the transfers from the County Capital Improvement Fund after the issuance of the 2008 RCPDFA Bonds: first, the amount required for the debt service on the Agency Sheriff Station Bonds, second, the amount required for the debt service on the 2008 RCPDFA Bonds, third, the amount required for the debt service on the 2003 RCPDFA Bonds, and lastly, amounts pursuant to other County directions. The language in the Agreements affirms that the Agency's obligation with respect to the transfers from the County Capital Improvement Fund at any time is limited solely to the extent that moneys are available in the County Capital Improvement Fund under the 1992 Pass -Through Agreement. The 2003 RCPDFA Bonds and the 2008 RCPDFA Bonds and the lease obligations relating to those bonds are not Agency's debt obligations. The Agreements provide that the Agency will make the transfers relating to the 2003 RCPDFA Bonds and the 2008 RCPDFA Bonds from the County Capital Improvement Fund to the County, and the County will be responsible for making timely payments to the bond trustee. Staff Report Adoption of Agency Resolution No. 553 approving Implementation Agreement and Letter Agreement with the County of Riverside Page 3 of 3 October 23, 2008 Conclusion: The Implementation Agreement and the Letter Agreement will facilitate the issuance of the 2008 RCPDFA Bonds, the proceeds of which will be used, in part, to finance the construction of the new sheriff station in the City. Staff is recommending that the Agency adopt Resolution No. 553 approving the execution and delivery of the Implementation Agreement and the acceptance of the Letter Agreement. Submitted by: D avid Yrigofren irector of R evelopment/Housing Approval: J in McCarthy, ACM velopment Carlos L. brteg , Executive Director n/ Paul S. Gilfbn, ri ectbfof Finance P1)()(b BY RDA 5`0 ON r!d C a (D' VEt%iFIFD 8Y kljk �`y.1G,�� Original on fide witri (City CierW�0ff1ce RESOLUTION NO. 553 A RESOLUTION OF THE PALM DESERT REDEVELOPMENT AGENCY APPROVING AS TO FORM AND AUTHORIZING THE EXECUTION AND DELIVERY OF AN IMPLEMENTATION AGREEMENT AND A LETTER AGREEMENT WITH THE COUNTY OF RIVERSIDE AND APPROVING CERTAIN RELATED ACTIONS WHEREAS, the Riverside County Palm Desert Financing Authority (the "Authority") is a joint powers authority duly organized and existing under and pursuant to Articles 1 through 4 (commencing with Section 6500), Chapter 5, Division 7, Title 1 of the California Government Code (the "Act") and that certain Joint Exercise of Powers Agreement dated as of January 1, 2002, as amended, by and between the County of Riverside (the "County") and the Palm Desert Redevelopment Agency (the "Agency"), and is authorized pursuant to Article 4 of the Act to issue bonds to provide financing for public capital improvements; and WHEREAS, the Authority proposes to issue and sell its Lease Revenue Bonds (County Facilities Projects), 2008 Series A (the "2008 RCPDFA Bonds"), the proceeds of which are to provide financing for certain capital projects of the County; and WHEREAS, in connection with the issuance of the 2008 RCPDFA Bonds, it is proposed that the Authority and the County enter into a Sublease (the "2008 Sublease"), under which the County will lease certain real properties from the Authority and make rental payments that are calculated to be sufficient to allow the Authority to pay debt service on the 2008 RCPDFA Bonds; and WHEREAS, pursuant to a Cooperative Agreement, dated as of February 13, 1992, by and among the County, the City of Palm Desert and the Agency, the Agency deposits a portion of the tax increment revenues with respect to the Palm Desert Redevelopment Agency's Project Area No. 1, As Amended, and Project Area No. 3 into a "County Capital Improvement Fund" (the "County Capital Improvement Fund"); and WHEREAS, pursuant to an Implementation Agreement (the "Implementation Agreement"), proposed to be entered into by the County and the Agency, the County will direct the Agency to periodically transfer available amounts from the County Capital Improvement Fund to the County for the County's application of such amounts to pay rental payments under the 2008 Sublease; and WHEREAS, the Agency desires to cooperate with the County by entering into the Implementation Agreement; and WHEREAS, further in connection with the issuance of the 2008 RCPDFA Bonds, the County has proposed to enter into a letter agreement (the "County Letter Agreement") with the Agency which, among other things, directs the periodic transfers of available amounts from the County Capital Improvement Fund to the County for application in connection with the Authority's Lease Revenue Bonds (County Facilities Projects), 2003 Series A (the "2003 RCPDFA Bonds") and sets forth additional agreements regarding the administration of the 2003 RCPDFA Bonds and the 2008 RCPDFA Bonds; 12395.0003\ 1063257.4 RESOLUTION NO. 553 NOW, THEREFORE, THE PALM DESERT REDEVELOPMENT AGENCY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. Recitals. The above recitals, and each of them, are true and correct. Section 2. Implementation Agreement. The Implementation Agreement in the form on file with the Secretary of the Agency is hereby approved. Each of the Chairman and the Executive Director, or another officer of the Agency designated by either of them in writing, acting singly, is hereby authorized and directed, for and in the name and on behalf of the Agency, to execute and deliver the Implementation Agreement in substantially said form, with such changes as the officer executing the same may approve (such approval to be conclusively evidenced by the officer's execution and delivery thereof). Section 2. Letter Aqreement. The acceptance by the Agency of the Letter Agreement, in the form on file with the Secretary of the Agency is hereby approved. Each of the Chairman and the Executive Director, or another officer of the Agency designated by either of them in writing, acting singly, is hereby authorized and directed, for and in the name and on behalf of the Agency, to execute the acceptance of the Letter Agreement in substantially said form, with such changes as the officer executing the same may approve (such approval to be conclusively evidenced by the officer's execution of the acceptance thereof). Section 3. Other Acts. The officers of the Agency are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents which they may deem necessary or advisable in order to effectuate the purposes of this Resolution, the Implementation Agreement and the Letter Agreement and any such actions previously taken by such officers are hereby ratified and confirmed. Section 4. Effective Date. This Resolution shall take effect immediately upon adoption. APPROVED and ADOPTED this 23rd day of October, 2008 by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: Jean M. Benson, Chairman ATTEST: Rachelle D. Klassen, Secretary 12395.0003\1063257.4 2 IMPLEMENTATION AGREEMENT This Implementation Agreement (the "Agreement"), dated as of 1, 2008, is made and entered into by and between the Palm Desert Redevelopment Agency (the "Agency") and the County of Riverside (the "County"). RECITALS A. Riverside County Palm Desert Financing Authority (the "Authority") is a joint powers authority duly organized and existing under and pursuant to that certain Joint Exercise of Powers Agreement dated as of January 1, 2002, as amended, by and between the County and the Agency, and under the provisions of Articles 1 through 4 (commencing with Section 6500), Chapter 5, Division 7, Title 1 of the Government Code of the State of California and is authorized pursuant to Article 4 of such Chapter to borrow money for the purpose of financing and refinancing public capital improvements. B. The Authority is issuing its Lease Revenue Bonds (County Facilities Projects), Series 2008A (the "Series 2008A Bonds"), in the aggregate principal amount of $ , pursuant to an Indenture, dated as of 1, 2008, by and between the Authority and Wells Fargo Bank, National Association, as trustee. C. Proceeds from the sale of the Series 2008A Bonds will be used to finance the construction and installation of a new sheriff station and related facilities in the City of Palm Desert (the "City") and certain other County capital improvement projects. D. In connection with the issuance of the Series 2008A Bonds, the Authority and the County are entering into a Sublease, dated as of 1, 2008 (the "Series 2008A Sublease"), whereby the County will lease certain real property (the "Leased Properties") from the Authority. E. Pursuant to the Series 2008A Sublease, the County is obligated to make certain rental payments to the Authority for the lease of the Leased Properties. F. The County, the City and the Agency have entered into a Cooperative Agreement, dated as of February 13, 1992. G. Pursuant to the Cooperative Agreement, for each fiscal year that Tax Increment relating to the Project Area No. 3 and the Added Territory portion of Project Area No. 1, as Amended (as such terms are defined in the Cooperative Agreement) is allocated and paid to the Agency, the Agency shall pay into a special trust account held by the Agency (which account being referred to as the "County Capital Improvement Fund" therein and herein) a portion of the County Share (as hereinafter defined) of the Tax Increment. H. The Agency may withdraw moneys from the County Capital Improvement Fund upon the written consent, or at the direction, of the County pursuant to the Cooperative Agreement. 12395.0003/1035827.7 RWG DRAFT: 9/29/2008 I. The Agency and the County desire to enter into this Agreement to implement the intent of the Cooperative Agreement and clarify the rights and obligations of the parties in connection with the issuance of the Series 2008A Bonds. NOW, THEREFORE, in consideration of the foregoing, and the mutual promises and covenants set forth herein, the parties agree as follows: Section 1. Definitions. Unless context clearly requires otherwise, the following terms when used in this Agreement shall have the meanings ascribed thereto in this Section 1: "ARencv" means the Palm Desert Redevelopment Agency. "Agreement" means this Implementation Agreement, as the same may be amended or supplemented from time to time. "Authority" means the Riverside County Palm Desert Financing Authority. "Business Day" means a day other than (i) a Saturday or Sunday, (ii) a day on which the business offices of the Agency or the County are closed, or (iii) a day on which the offices of the financial institution with which the Capital Improvement Fund is then maintained are authorized or required to close. "City" means the City of Palm Desert, California "Cooperative Agreement" means the Cooperative Agreement, dated as of February 13, 1992, by and among the County, the City and the Agency, as the same may be amended or supplemented from time to time. "County" means the County of Riverside, California. "County Share" means that portion of the Tax Increment which is attributable to and derived from the general tax rate of one percent levied within the Project Areas and which in turn is attributable to and derived from the share of the one percent levy made on behalf of the County general fund. "Fiscal Year" means each 12-month period extending from July 1 in one calendar year to June 30 of the succeeding calendar year, both dates inclusive. "Original Sheriff Station" means that certain real property and the sheriff station facilities and improvements thereon located at 73-520 Fred Waring Drive in the City. "Original Sheriff Station Bonds" means the bonds issued by the Agency to finance the construction and installation of the Original Sheriff Station facilities and improvements and the indebtedness incurred by the Agency to refund such bonds. "Original Sheriff Station Draw Account" means the account by that name established in the County Capital Improvement Fund pursuant to Section 2 of this Agreement. 12395.0003/1035827.7 2 "Original Sheriff Station Lease" means the Lease, dated as of February 2, 1989, by and between the Agency and the County, relating to the Original Sheriff Station. "Original Sheriff Station Lease Termination Agreement" means the Lease Termination Agreement, dated as of , 2008, by and between the Agency and the County, under which the Agency and the County agree that the Original Sheriff Station Lease would terminate upon completion of certain requirements. "Original Sheriff Station Lease Termination Date" means the date on which the Original Sheriff Station Lease will terminate pursuant to the Original Sheriff Station Lease Termination Agreement. "Original Sheriff Station Portion" means, with respect to each Fiscal Year, the amount of debt service payable by the Agency with respect to the Original Sheriff Station Bonds, as set forth in Exhibit A. "Project Areas" means the Agency's Project Area No. 3 and the Added Territory (as defined in the Cooperative Agreement) portion of the Agency's Project Area No. 1, As Amended. "Redevelopment Law" means the Community Redevelopment Law, set forth in California Health and Safety Code Sections 33000 et se . "Series 2008A Base Rental Pavment" means the semi-annual base rental payable by the County pursuant to Section 3(a)(i) of the Series 2008A Sublease. "Series 2008A Bonds" means the Riverside County Palm Desert Financing Authority Lease Revenue Bonds (County Facilities Projects), 2008 Series A, issued pursuant to the Series 2008A Indenture. "Series 2008A Draw Account" means the account by that name established in the County Capital Improvement Fund pursuant to Section 3 of this Agreement. "Series 2008A Indenture" means the Indenture, dated as of 1, 2008, by and between the Authority and Wells Fargo Bank, National Association, as trustee, as the same may be amended or supplemented from time to time. "Series 2008A Issuance Date" means the date on which the Series 2008A Bonds are issued by the Authority. "Series 2008A Scheduled Draw Amount" means, with respect to each Series 2008A Semi -Annual Draw Date, the amount (indicated in Exhibit B) that the Agency is scheduled to draw from the Series 2008A Draw Account on such date pursuant to Section 3(c) (which may differ from the actual draw amount upon the County's directions described in Section 3(d) and under the circumstances described in Section 5(a)). 12395.0003/1035827.7 3 "Series 2008A Semi -Annual Draw Date" means each date (April 1 and October 1) indicated in Exhibit B that the Agency is scheduled to make a draw from the Series 2008A Draw Account pursuant to Section 3(c). "Series 2008A Sublease" means the Sublease, dated as of 1, 2008, by and between the Authority, as lessor, and the County, as lessee, described in Paragraph D of the Recitals hereof, as the same may be amended or supplemented from time to time. "Series 2008A Trustee" means Wells Fargo Bank National Association, in its capacity as trustee under the Series 2008A Indenture, or any successor trustee thereunder. "Tax Increment" means taxes allocated, paid to and received by the Agency from the Project Areas pursuant to Section 33670 (b) of the Redevelopment Law. Section 2. Original Sheriff Station Draw Account,. (a) The Agency shall establish a separate account within the County Capital Improvement Fund to be designated the "Original Sheriff Station Draw Account." (b) The County hereby confirms its consent and agreement to the use of moneys deposited in the County Capital Improvement Fund to pay (or reimburse the Agency for the payment of) debt service on the Original Sheriff Station Bonds, including principal and interest accrued, to the Original Sheriff Station Lease Termination Date. The amount of debt service payable by the Agency with respect to the Original Sheriff Station Bonds for each Fiscal Year (i.e., the "Original Sheriff Station Portion") is set forth in Exhibit A. (c) From and after the Series 2008A Issuance Date to and including the Fiscal Year during which the Original Sheriff Station Lease Termination Date occurs, moneys deposited in the County Capital Improvement Fund each Fiscal Year shall be set aside, first, in the Original Sheriff Station Draw Account until the aggregate amount of such transfers to the Original Sheriff Station Draw Account is equal to the Original Sheriff Station Portion for such Fiscal Year; provided that, for Fiscal Year 2008-09, the Agency shall make the transfer from moneys already on deposit in the County Capital Improvement Fund to the Original Sheriff Station Draw Account as soon as practicable after the Series 2008A Issuance Date; provided further that, for the Fiscal Year during which the Original Sheriff Station Lease Termination Date occurs, the aggregate amount to be deposited into the Original Sheriff Station Draw Account shall only be equal to (1) the Original Sheriff Station Portion for such Fiscal Year, multiplied by (ii) a percentage that represents (A) the number of days that have elapsed from the preceding July 1 to the Original Sheriff Station Lease Termination Date (both dates inclusive), divided by (B) the total number of days in such Fiscal Year (see example calculation set forth in Exhibit A). After the Series 2008A Issuance Date, the Agency shall not use any money in the County Capital Improvement Fund except for moneys deposited in the Original Sheriff Station Draw Account to pay (or reimburse the Agency for the payment of) debt service on the Original Sheriff Station Bonds. The Agency may make withdrawals from the Original Sheriff Station Draw Account at any time to pay (or reimburse the Agency for the payment of) debt service on the Original Sheriff Station Bonds. 12395.0003/ 1035827.7 4 (d) All interest earned on moneys in the Original Sheriff Station Draw Account shall be deposited in the County Capital Improvement Fund. (e) On the last day (i.e., June 30) of the Fiscal Year during which the Original Sheriff Station Lease Termination Date occurs, the Agency shall transfer any money remaining in the Original Sheriff Station Draw Account to the County Capital Improvement Fund and then close the Original Sheriff Station Draw Account. Section 3. Series 2008A Draw Account. (a) The Agency shall establish a separate account within the County Capital Improvement Fund to be designated the "Series 2008A Draw Account." (b) Notwithstanding any provision of the Cooperative Agreement to the contrary but subject to Section 3(d) and Section 5 below, so long as this Agreement remains effective, each Fiscal Year, after the transfers to the Original Sheriff Station Draw Account required by Section 2 have been completed, moneys deposited in the County Capital Improvement Fund shall be set aside in the Series 2008A Draw Account until the aggregate amount of such transfers to the Series 2008A Draw Account is equal to the sum of the Series 2008A Scheduled Draw Amounts for such Fiscal Year. Moneys deposited in the County Capital Improvement Fund each Fiscal Year may not be used for any purpose other than as permitted under Section 2 and Section 3 of this Agreement until the required transfers to the Original Sheriff Station Draw Account and the Series 2008A Draw Account pursuant to Section 2(c) and this Section 3(b) have been made. (c) Subject to Section 3(d) and Section 5, the Agency shall make withdrawals from the Series 2008A Draw Account on the Series 2008A Semi -Annual Draw Dates and in the Series 2008A Scheduled Draw Amounts set forth in Exhibit B; provided, that if a Series 2008A Semi - Annual Draw Date is not a Business Day, then the withdrawal shall be made on the immediately preceding Business Day. All moneys so withdrawn from the Series 2008A Draw Account pursuant to this Section 3(c) shall be transferred immediately by the Agency to the County. The County shall apply the amounts so transferred to pay Series 2008A Base Rental Payments coming due under the Series 2008A Sublease. (d) The County may in its discretion pay any Base Rental Payment, in whole or in part, from sources available to the County other than the Series 2008A Draw Account. Prior to any Semi -Annual Draw Date, if the County shall have deposited with the Series 2008A Trustee moneys representing all or a portion of a Base Rental Payment, then the County may provide to the Agency in a written notice, signed by the County Executive Officer: (i) specifying the amount that the County has so deposited with the Series 2008A Trustee (the "County Deposit"); (ii) specifying the related Rental Payment Date (as defined in the Series 2008A Sublease) and Series 2008A Semi -Annual Draw Date; (iii) directing the Agency to, for the affected Fiscal Year, deposit in the Series 2008A Draw Account only an amount equal to the total Series 2008A Scheduled Draw Amounts for such Fiscal Year less the County Deposit, notwithstanding 3(b) above, and 12395.0003/1035827.7 5 (iv) directing the Agency to, on the affected Series 2008A Semi -Annual Draw Date, withdraw from the Series 2008A Draw Account and transfer to the County only an amount equal the Series 2008A Scheduled Draw Amount less the County Deposit, notwithstanding Section 3(c) above. Upon receipt of such a notice, the Agency shall comply with the directions therein. The Agency shall have no obligation to verify the genuineness or the accuracy of such notice. (e) Upon the occurrence of any event affecting future Series 2008A Base Rental Payments under the Series 2008A Sublease (including, but not limited to, abatements, prepayments or other modifications to the Series 2008A Sublease), the County shall promptly notify the Agency in writing. The County and the Agency shall amend Exhibit B to include a new draw schedule that corresponds to the modified Series 2008A Base Rental Payment schedule under the Series 2008A Sublease; provided, that the Agency shall in no way be deemed to have (nor shall the Agency be responsible for obtaining) knowledge regarding any modification to the Series 2008A Base Rental Payment schedule unless and until the County has notified the Agency of such modification in writing. Whenever the Series 2008A Sublease is amended, supplemented or otherwise modified, the County shall promptly, upon execution thereof, provide the Agency with a copy of such amended Series 2008A Sublease. (f) All interest earned on moneys in the Original Sheriff Station Draw Account shall be deposited in the County Capital Improvement Fund. (g) Upon the termination of this Agreement, the Agency shall transfer any money remaining in the Series 2008A Draw Account to the County Capital Improvement Fund and then close the Series 2008A Draw Account. Section 4. Additional Withdrawals. Moneys deposited in the Original Sheriff Station Draw Account and the Series 2008A Draw Account shall be applied solely as permitted by Sections 2 and 3 of this Agreement. After the transfers to the Original Sheriff Station Draw Account and the Series 2008A Draw Account required by Sections 2 and 3 have been completed each Fiscal Year, the County may consent to or direct any additional withdrawal from the County Capital Improvement Fund during the remainder of such Fiscal Year to the extent provided in Section 8 of the Cooperative Agreement. Section 5. A2encv Oblieations Limited. (a) The Agency's obligations with respect to transfers and withdrawals from the County Capital Improvement Fund (and the accounts therein) under this Agreement and the Cooperative Agreement on any date shall be limited to the actual balance then on deposit in the County Capital Improvement Fund. In any Fiscal Year, the Agency shall make transfers to the Series 2008A Draw Account solely to the extent that moneys are available therefor in the County Capital Improvement Fund. If the Agency reasonably anticipates that the balance of the Series 2008A Draw Account will be less than the Series 2008A Scheduled Draw Amount on any Series 2008A Semi -Annual Draw Date, then the Agency shall notify the County of the deficiency at least one Business Day before such Series 2008A Semi - Annual Draw Date and, in such event, unless the County instructs the Agency to withdraw a lesser amount, the Agency shall withdraw the full balance of the Series 2008A Draw Account (in 12395.0003/1035827.7 6 lieu of the Series 2008A Scheduled Draw Amount) and transfer such balance to the County on such Series 2008A Semi -Annual Draw Date. (b) The County acknowledges and agrees that Base Rental Payments (and any "Additional Rental" under the Sublease) shall be the responsibility of the County. The Agency has not assumed any responsibility with respect to the County's obligations under the Series 2008A Sublease or in connection with the Series 2008A Bonds by the Agency's execution of this Agreement or any action taken (or to be taken) relating to this Agreement. The County agrees to indemnify and save the Agency and its officers, directors, agents and employees, harmless against any loss, expense and liabilities arising out of this Agreement or in the exercise and performance of the Agency's obligations in accordance with this Agreement, including attorney fees and expenses and any other costs and expenses of defending against any claim of liability, but excluding losses, expenses and liabilities that are directly due to the gross negligence or intentional act or omission of the Agency or its officers, directors, agents or employees. The County's obligations under this Section 5(b) shall survive the final withdrawal from the County Capital Improvement Fund and the termination of other provisions of this Agreement. Section 6. Excluded from Can. All of the withdrawals described in Sections 2, 3 and 4 hereof shall not be included in the calculation under the Cooperative Agreement of any "cap" or cumulative amount of Tax Increment allocated to the Agency which is derived from the general fund basic tax rate levy of the County. Section 7. Entire Agreement. This Agreement constitutes the entire agreement with respect to the subject matters hereof. The parties hereto agree that this agreement supersedes any prior understandings, agreements or representations by and between the parties, written or oral, to the extent that they relate in any way to the subject matters hereof. Section 8. Effectiveness. Except as provided in Section 4(b), this Agreement shall terminate upon the earliest occurrence of the following: (i) the transfer of the Series 2008A Scheduled Draw Amount to the County on the final Series 2008A Semi -Annual Draw Date indicated in table set forth in Exhibit B: (ii) the termination of the Series 2008A Sublease; or (iii) the termination of the Agency's obligation to make deposits in the County Capital Improvement Fund pursuant to the Cooperation Agreement or by the operation of law and depletion of the remaining balance of the Series 2008A Draw Account thereafter. Section 9. Amendment. No amendment or any provision of this Agreement shall be valid unless the same shall be in writing and signed by all the parties hereto. Section 10. Governing Law. This Agreement shall be governed by and construed by the laws of California. Section 11. Severability. The invalidity or unenforceability of any term or provision of this Agreement shall not affect the validity or enforceability of the remaining terms and provisions thereof. 12395.0003/1035827.7 7 Section 12. Headins4s. The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement. Section 13. Notice. Any notice or other communication to be given under this Agreement may be given by delivering the same in writing: To the County: Regarding dailv operational matters under this Agreement, the Series 2008 Bonds and the Series 2008A Base Rental Payments: County of Riverside 4080 Lemon Street Riverside, CA 92502 Attention: Lani Sioson, Management Analyst Regarding all other matters: County of Riverside 4080 Lemon Street Riverside, CA 92502 Attention: To the Agency: Regarding daily operational matters under this Agreement: Palm Desert Redevelopment Agency 73 -5 10 Fred Waring Drive Palm Desert, CA 92260 Attention: Aria Scott, Senior Financial Analyst Regarding all other matters: Palm Desert Redevelopment Agency 73 -5 10 Fred Waring Drive Palm Desert, CA 92260 Attention: Paul Gibson, Finance Director Section 14. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to an original, but all together shall constitute but one and the same instrument. 12395.0003/1035827.7 8 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives on the date first written above. PALM DESERT REDEVELOPMENT AGENCY Executive Director COUNTY OF RIVERSIDE County Executive Officer 12395.0003/1035827.7 9 Exhibit A Orip-inal Sheriff Station Portion Fiscal Year Original Sheriff Station Portion 2008-09 $335,560 2009-10 $310,462 2010-11 $336,223 2011-12 $311,603 2012-13 $321,907 2013-14 $322,538 2014-15 $319,356 2015-16 $317,475 2016-17 $315,248 2017-18 $328,254 2018-19 $307,342 The table above sets forth the Original Sheriff Station Portion for each Fiscal Year through the end of Fiscal Year 2018-19; however, if the Original Sheriff Station Termination Date occurs earlier, then the Original Sheriff Station Draw Account will be closed on the last day (i.e., June 30) of the Fiscal Year during which the Original Sheriff Station Lease Termination Date occurs and no further transfer of the Original Sheriff Station Portion will be made thereafter. The County currently expects that the Original Sheriff Station Lease Termination Date will occur around mid-2010. For the Fiscal Year during which the Original Sheriff Station Lease Termination Date occurs, the deposit into the Original Sheriff Station Draw Account shall only be equal to (i) the Original Sheriff Station Portion for such Fiscal Year, multiplied by (ii) a percentage that represents (A) the number of days that have elapsed from the preceding July 1 to the Original Sheriff Station Lease Termination Date (both dates inclusive), divided by (B) the number of days in such Fiscal Year. For example, if the Original Sheriff Station Lease Termination Date is August 31, 2010, then the transfer to the Original Sheriff Station Draw Account for Fiscal Year 2010-11 will be computed as follows: $336,223 (Original Sheriff Station Portion for Fiscal Year 2010-11) x 17% (62 days elapsed divided by 365 days in Fiscal Year 2010-11) $57,158 (Required Fiscal Year 2010-11 transfer to the Original Sheriff Station Account) 12395.0003/ 103 5827.7 Exhibit B Series 2008A Scheduled Semi -Annual Draws Series 2008 Series 2008A Total Scheduled Draw Semi -Annual Draw Date* Scheduled Draw Amount Amounts for Fiscal Year April 1, 2009 1 October 1, 2009 -- 1 April 1, 2010 1 October 1, 2011 -- April 1, 2012 { October 1, 2012 -- April 1, 2013 October 1, 2013 -- 1 April 1, 2014 October 1, 2014 -- 1 April 1, 2015 October 1, 2015 -- April 1, 2016 October 1, 2016 -- April 1, 2017 October 1, 2017 -- April 1, 2018 October 1, 2018 -- April 1, 2019 October 1, 2019 -- April 1, 2020 October 1, 2020 -- April 1, 2021 * Each draw is scheduled to be on the first day of the month that Series 2008A Base Rental Payment would have to be paid by the County to the Series 2008A Trustee under the Series 2008A Sublease. Pursuant to Section 3(a)(i) of the Series 2008A Sublease, the Series 2008A Base Payments are to be paid by the County to the Series 2008A Trustee [151 days before each May 1 and November 1. 12395.0003/ 103 5827.7 [RIVERSIDE COUNTY LETTERHEAD] , 2008 Palm Desert Redevelopment Agency 73 -5 10 Fred Waring Drive Palm Desert, CA 92260-2578 Attention: Carlos Ortega, Executive Director Re: Riverside County Palm Desert Financing Authority Lease Revenue Bonds (County Facilities Projects), 2003 Series A (the "2003 RCPDFA Bonds"), and Riverside County Palm Desert Financing Authority Lease Revenue Bonds (County Facilities Projects), 2008 Series A (the "2008 RCPDFA Bonds") Dear Mr. Ortega: This letter evidences the requests, instructions and agreements by the County of Riverside (the "County") regarding the transfer of moneys from the County Capital Improvement Fund (the "Fund") in connection with certain payments relating to the above -referenced bonds. As used in this letter, the County Capital Improvement Fund refers to the fund by that name held by the Palm Desert Redevelopment Agency (the "Agency") on behalf of the County pursuant to the Cooperative Agreement, dated as of February 13, 1992 (the "Cooperative Agreement"), by and among the County, the Agency and the City of Palm Desert (the "City"). The Riverside County Palm Desert Financing Authority ("RCPDFA") issued its 2003 RCPDFA Bonds on December 18, 2003, pursuant to an Indenture, dated as of December 1, 2003, by and between RCPDFA and Wells Fargo Bank National Association (as successor to BNY Western Trust Company), as trustee (the "2003 Bond Trustee"). Proceeds of the 2003 RCPDFA Bonds were used to finance certain County projects and to refund the Palm Desert Financing Authority Lease Revenue Bonds (Blythe County Administrative Center), Series 1996. In connection with the 2003 RCPDFA Bonds, RCPDFA and the County entered into a Facilities Lease, dated as of December 1, 2003 (the "2003 Facilities Lease"). Since the issuance of the 2003 RCPDFA Bonds, the Agency has been making semi-annual transfers to the 2003 Bond Trustee for the payment of the 2003 Bond Lease Payments on behalf of the County, at the County's requests and instructions. To finance additional County projects, RCPDFA is contemplating the issuance of the 2008 RCPDFA Bonds. In connection with the 2008 RCPDFA Bonds, RCPDFA and the County will enter into a Sublease (the "2008 Sublease") with respect to certain real properties. The County will be obligated to make semi-annual rental payments (the "2008 Bond Lease Payments") under the 2008 Sublease in amounts that will be calculated to be sufficient for 123 95-0003\ 10773 90v6. doc RCPDFA to pay debt service on the 2008 RCPDFA Bonds. A portion of the proceeds of the 2008 RCPDFA Bonds will be used to construct a new sheriff station to be located in the City. In connection with the sale of the 2008 RCPDFA Bonds, the County's financial advisor has recommended that the County execute and deliver an Implementation Agreement (the "2008 Implementation Agreement"), by and between the County and the Agency. Capitalized terms used below that are not otherwise defined have the meanings ascribed to them in the 2008 Implementation Agreement. To effectuate the issuance of the 2008 RCPDFA Bonds, each of the following is acknowledged and agreed by the County and the Agency (such agreements to be effective on the issuance date of the 2008 RCPDFA Bonds): (i) The County will be responsible for administering the 2003 RCPDFA Bonds, the 2008 RCPDFA Bonds and any future RCPDFA bond issues supported by a County lease. Such administration includes assuring the 2003 Bond Lease Payments, the 2008 Bond Lease Payments and any other lease payments relating to the other bond issues are made in accordance with the respective lease agreements. (ii) Amounts in the Fund will be applied, first, to pay the debt service on the Original Sheriff Station Portion of Agency bonds until the Original Sheriff Station Lease Termination Date, and second, to the 2008 Bond Lease Payments (net of any other funds to be used by the County for the 2008 Bond Lease Payments), in accordance with the 2008 Implementation Agreement. (iii) After the Original Sheriff Station Lease Termination Date, amounts in the Fund will be applied first to the 2008 Bond Lease Payments (net of any other funds to be used by the County for the 2008 Bond Lease Payments), in accordance with the 2008 Implementation Agreement. (iv) To the extent that there are moneys remaining in the Fund after application detailed in (ii) and (iii) above, the Agency will make additional transfers from the Fund to the County, on each April 1 and October 1, in the amount set forth in Exhibit A hereto, to be applied by the County to the 2003 Bond Lease Payment. To the extent that the moneys so transferred from the Fund are insufficient to cover the 2003 Bond Lease Payments, the County shall use its other available moneys to make up the difference. (v) After application detailed in (ii), (iii) and (iv) above, draws may be made from the Fund for other purposes as directed by the County in accordance with the Cooperative Agreement. (vi) Upon the occurrence of any event affecting the 2003 Bond Lease Payments or the 2008 Bond Lease Payments (including, without limitation, abatements, prepayments or other modifications to the 2003 Facilities Lease or the 2008 Sublease), the County shall promptly notify the Agency in writing. The County shall provide the Agency with a new draw schedule which corresponds to, as applicable, the modified 2003 Bond Lease Payment schedule to replace the one set forth in Exhibit A hereto, or the modified 2008 Bond Lease Payment schedule to replace the one set forth in Exhibit B of the 2008 Implementation Agreement. Whenever the 12395-0003\1077390v6.doc 2003 Facilities Lease or the 2008 Sublease is amended, supplemented or otherwise modified, the County shall promptly, upon execution thereof, provide the Agency with a copy of such amended the 2003 Facilities Lease or the 2008 Sublease, as applicable. (vii) So long as the Agency is obligated to make deposits into the Fund pursuant to the Cooperative Agreement, the Agency shall provide the following to the County: (A) an annual report by each September 15, regarding the amount of tax increment revenue that the Agency is entitled to receive under the limits set forth in the redevelopment plans (the "Plan Limits") relating to the Agency's Project Area No. 3 and the Added Territory portion of the Agency's Project Area No. 1, As Amended (the "Project Areas"), and (B) to the extent that the Agency is obligated to make continuing disclosure filings with respect to any bonds secured by the tax increment revenues of the Project Areas, a copy of the annual report and any other filing regarding disclosure of matters that affect deposits into the Fund. (viii) The County agrees to provide the Agency a copy of each annual report and other filing pursuant to the continuing disclosure undertakings with respect to the 2003 RCPDFA Bonds and the 2008 RCPDFA Bonds. The requests, instructions and agreements by the County and the Agency set forth in this letter shall not be revoked or modified, except by a written instrument which is signed by the County Executive Officer and the Agency's Executive Director. Yours truly, COUNTY OF RIVERSIDE M. County Executive Officer cc: , Riverside County Auditor -Controller's Office Robert Schneider, Wells Fargo Bank National Association Acknowledged and accepted: PALM DESERT REDEVELOPMENT AGENCY I0 Executive Director 12395-0003\1077390v6.doc Transfer Date April 1, 2009 October 1, 2009 April 1, 2010 October 1, 2010 April 1, 2011 October 1, 2011 April 1, 2012 October 1, 2012 April 1, 2013 October 1, 2013 April 1, 2014 October 1, 2014 April 1, 2015 October 1, 2015 April 1, 2016 October 1, 2016 April 1, 2017 October 1, 2017 April 1, 2018 October 1, 2018 April 1, 2019 October 1, 2019 April 1, 2020 October 1, 2020 April 1, 2021 October 1, 2021 April 1, 2022 October 1, 2022 April 1, 2023 October 1, 2023 April 1, 2024 October 1, 2024 April 1, 2025 October 1, 2025 April 1, 2026 October 1, 2026 Exhibit A Transfers from County Capital Improvement Fund for Application Towards 2003 Bond Lease Payments Amount $1,032,055.00 439,450.00 1,034,450.00 430,673.75 1,040,673.75 420,913.75 1,060,913.75 409,873.75 1,069,873.75 397,828.75 1,077,828.75 384,908.75 1,094,908.75 371,063.75 1,106,063.75 356,180.00 1,116,180.00 340,410.00 1,135,410.00 322,522.50 1,152,522.50 303,847.50 1,173,847.50 284,707.50 1,194,707.50 264,232.50 1,214,232.50 242,145.00 1,237,145.00 218,762.50 1,253,762.50 194,181.25 1,279,181.25 168,412.50 1,308,412.50 141,337.50 Transfer Date April 1, 2027 October 1, 2027 April 1, 2028 October 1, 2028 April 1, 2029 October 1, 2029 April 1, 2030 October 1, 2030 April 1, 2031 October 1, 2031 April 1, 2032 October 1, 2032 April 1, 2033 Amount $856,337.50 124,356.25 874,356.25 105,943.75 885,943.75 86,793.75 911,793.75 66,537.50 926,537.50 45,425.00 945,425.00 23,325.00 973,325.00 * Each draw is scheduled to be on the first day of the month that 2003 Bond Lease Payment would have to be paid by the County to the 2003 Bond Trustee under the 2003 Facilities Lease. Pursuant to the 2003 Facilities Lease, the 2003 Bond Lease Payments are to be paid by the County to the 2003 Bond Trustee 15 days before each May 1 and November 1. 12395-0003\1077390v6.doc