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Lakewood City School District. (REFERRED TO COMMITTEE OF THE WHOLE 11/20/7) (Pg. 7) Law Director Butler provided background information and a hand out on Resolution 8963 -17. The Resolution was sent to Committee of the Whole in November. The Resolution would approve an agreement between the City and the School District that would amend a 2004 agreement that the City entered into contemporaneously with the development agreement for the Rockport Square project. The Rockport project was scheduled to launch around the time of the housing market crash and stalled. The resurrection of the project has prompted the City to re- engage with the School District. The School District pointed out that the City had been miscalculating its annual payments to be made to the School District. Because this project involved a TIFF district the normal process of receiving and distributing property taxes to the City and the schools, after that TIFF district was created in 2004, was modified. Instead of those regular tax payments being split between the City and Schools, they went into a fond that was meant to provide assistance for the public improvement aspects of the project. At that time in 2004 the City and School District entered into an agreement whereby the City would attempt to make the School District whole based on revenues that would eventually come in from the County. The City had been paying based on 2004 era millage rates in effect at the time. As the voters of Lakewood have approved additional millage since that time, the City's make whole payments should have also increased and they were not. The difference is over $510,000 over that period of time from 2004 to 2017. This agreement to the original make -whole agreement between the City and the Schools would permit the City to make these additional payments to the School District to make up for those lost years and would revise the waterfall of how we are to apply the money that comes in from the County while the TIFF district remains intact. It is expected to remain intact until 2026. The waterfall of payments has been revised in order to make sure that the City is able to pay all debt service for the bonds that were issued in anticipation of the Rockport project, and then pay the Schools, and then split any overage after that. Since the agreement /Resolution was introduced in November it has been slightly modified based on discussions between the City and School District. Director Butler explained the modifications, which are ministerial in nature. The modifications necessitated a substitute version. In response to a Councilmember question Director Pae explained why so many years have gone by without full payment being made and why the discrepancy was only recently discovered. The Rockport development was expected to be completed in 2009 and was 8 years delayed. During those years the schools increased their millage, which was not anticipated at the time of the original agreement. Recently, the schools brought this to the City's attention. The two parties have been meeting to discuss it. Also, since the development was stalled, the City was not receiving the revenue to support the difference until recently. Once the issue was brought to light, both parties worked to come to an agreement. 3