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Property Tax Increment The Agency will use property tax increment as provided for in Section 33670 of the Redevelopment Law, and as authorized in the Plan, to employ tax increment financing to underwrite Project costs. Tax increment revenue may only be used to pay indebtedness incurred by the Agency; indebtedness includes principal and interest on loans, monies advanced, or debts (whether funded, refunded, assumed, or otherwise) incurred by the Agency to finance or refinance, in whole or in part, redevelopment activities. Project tax increment revenues are distributed to address an array of obligations. As required by Section 33334.2 of the Redevelopment Law, twenty percent (20%) of Project tax increment revenue is deposited into the Housing Fund for the purposes of increasing, improving, and preserving the community's supply of low and moderate income housing. The remaining 80% of the tax increment revenue will be used to pay for taxing entity obligations, debt service costs, and other program expenditures. Program expenditures include infrastructure, capital facility, and economic development programs within the Project Area. The Redevelopment Plan contains specific limits on the collection of tax increment revenue as required by Redevelopment Law. Section 33492.13(a)(1) requires a limit on the amount of the tax increment revenue that may be received by the Agency; the Plan establishes a $750 million cumulative tax increase revenue limit. Also, provided by Section 33492.13(a)(4) of the Redevelopment Law, the Agency may collect tax increment revenue for a period of 45 years following the date the County Auditor-Controller certifies, pursuant to Section 33492.9 of the Redevelopment Law, that the annual tax increment revenue is $100,000 or more. Thus, the total number of years the Agency may collect tax increment revenue will be at least 45, and very likely longer as the Project Area is not expected to reach the $100,000 threshold for some years. A preliminary forecast of Project tax increment revenues is included later in this Section. Bonded Debt Under the Redevelopment Plan, the Agency would have the capacity to issue bonds and/or notes for any of its corporate purposes, payable in whole or in part from tax increment revenue. Many redevelopment agencies in the state employ bond financing as an integral component of their overall redevelopment-financing program. The Redevelopment Plan permits the Agency the ability to incur debt for a 20-year period after the County Auditor-Controller certifies that the tax increment revenue exceeds $100,000. ROSENOW SPEVACEK GROUP, INC. REDEVELOPMENT AGENCY OF THE CITY OF STOCKTON MAY 3, 2004 ROUGH AND READY ISLAND REDEVELOPMENT PROJECT - C-2 - PRELIMINARY REPORT