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effectiveness of the Dissolution Act, the State Department of Finance and various successor agencies have from time to time disagreed about the interpretation of different language contained in the Dissolution Act, as well as whether or not the State Department of Finance has exceeded its authority in rejecting items from ROPS submitted by successor agencies, as evidenced by numerous lawsuits. While the Successor Agency has covenanted in the Indenture to preserve and protect the security of the Bonds and the rights of the Bondholders (see APPENDIX A — "SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE"), any such action taken by the Successor Agency could incur substantial time and cost that may have a detrimental effect on the Successor Agency's ability to timely pay debt service on the Bonds. Moreover, the Successor Agency cannot guarantee the outcome of any such action taken by the Successor Agency to preserve and protect the security of the Bonds and the rights of the Bondholders. In addition to the existing limitations on Tax Revenues described in this Official Statement under "PROPERTY TAXATION IN CALIFORNIA," the California electorate or Legislature could adopt future limitations with the effect of reducing Tax Revenues payable to the Successor Agency. Real Estate and General Economic Risks Tax Revenues available for payment of any indebtedness of the Successor Agency are based upon the latest actual assessed values for the fiscal year 2018/19. Redevelopment of real property within the Project Area by the City, as well as private development in the Project Area, may be adversely affected by changes in general economic conditions, fluctuations in the real estate markets and interest rates, unexpected increases in development costs, changes in or new governmental policies including governmental policies to restrict or control certain kinds of development and by other similar factors. If development and redevelopment activities in the Project Area encounters significant obstacles of the kind described in the Official Statement or other impediments, the economy of the area in and around the Project Area, could be adversely affected, causing reduced taxable valuation of property in the Project Area a reduction of the Tax Revenues available to repay the Bonds. Due to the decline in the general economy of the region, owners of property within the Project Area may be less able or less willing to make timely payments of property taxes, causing a delay or reduction of Tax Revenues available to repay the Bonds. Recognized Obligation Payment Schedule The Dissolution Act provides that only those payments listed in the ROPS may be made by the Successor Agency from the funds specified in the ROPS. The Dissolution Act requires successor agencies to prepare and approve, and submit to the successor agency's oversight board and the State Department of Finance for approval, a ROPS pursuant to which enforceable obligations (as defined in the Dissolution Act) of the successor agency are listed, together with the source of funds to be used to pay for each enforceable obligation. Tax Revenues will not be distributed from the RPTTF by the County Auditor -Controller to the Successor Agency's Redevelopment Obligation Retirement Fund without a duly approved and effective ROPS obtained in sufficient time prior to the January 2 or June 1 distribution dates, as applicable. See "SECURITY FOR THE BONDS - Recognized Obligation Payment Schedules." In the event the Successor Agency were to fail to file a ROPS with respect to any six-month period, the availability of Tax Revenues to the Successor Agency could be adversely affected for such period. The Successor Agency has covenanted to take all actions required under the Dissolution Act to include scheduled debt service on the Bonds as well as any amount required under the Indenture to replenish the Reserve Account of the Debt Service Fund, in ROPS for each six-month period of a fiscal year and to enable the County Auditor -Controller to distribute from the RPTTF to the Successor Agency's Redevelopment Obligation Retirement Fund on each January 2 and June 1 amounts required for the Successor Agency to pay principal of, and interest on, the Bonds coming due in the respective six-month period of a fiscal year, including listing a reserve on the ROPS to the extent required by the Indenture or when the next property tax allocation is projected to be insufficient to pay all obligations due under the provisions of the Bonds for the next payment due in the 45 SA -3-59