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HomeMy WebLinkAboutCC Item No. 13 08-09-2011CITY OF LADE LSIROR, DREAM EXTREME- REPORT TO CITY COUNCIL TO: HONORABLE MAYOR PRO TEM AND MEMBERS OF THE CITY COUNCIL FROM: ROBERT A. BRADY CITY MANAGER DATE: AUGUST 9, 2011 SUBJECT: 1. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA DECLARING ITS INTENTION TO ENACT AN ORDINANCE WHEREBY THE CITY SHALL ELECT TO COMPLY WITH AND PARTICIPATE IN THE ALTERNATIVE VOLUNTARY REDEVELOPMENT PROGRAM CONTAINED IN PART 1.9 OF DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE; AND 2. AN ORDINANCE OF THE CITY OF LAKE ELSINORE, CALIFORNIA ELECTING TO COMPLY WITH AND PARTICIPATE IN THE ALTERNATIVE VOLUNTARY REDEVELOPMENT PROGRAM CONTAINED IN PART 1.9 OF DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE Background On June 29, 2011, the State of California enacted Assembly Bill x1 26 and Assembly Bill x1 27, both trailer bills to the main state budget (Senate Bill 87). ABx1 26 eliminates redevelopment agencies and directs the resolution of their activities. ABx1 27 provides agencies an alternative "voluntary" program requiring various payments in lieu of elimination. Cities that are willing to make these payments will exempt their redevelopment agencies from the provisions of ABx1 26, and these agencies will be authorized to continue to exist and implement redevelopment activities. Discussion Payments under ABx1 27 would need to be made by the City of Lake Elsinore from funds that are to be transferred by the Redevelopment Agency to the City. Payment amounts will be determined by the State's Department of Finance based on a formula in the statute. Lake Elsinore's fiscal year 2011-12 payment is reported to be $7,739,443. AGENDA ITEM NO. 13 Page 1 of 12 Resolution And Ordinance Re Election To Comply August 9, 2011 Page 2 One half of the payment will be due on January 15th, 2012, and the other half will be due on May 15th, 2012. Thereafter, Lake Elsinore will be required to make annual payments to the County Auditor-Controller in accordance with a statutory formula which amounts are estimated to range from $1.8 million to $2.8 million and decreasing to less than $1 million as the applicable redevelopment plans expire. The FY 2011/12 payment obligation published by the Department of Finance may be appealed on or before August 15 and the Agency's finance team is evaluating and will advise the Agency in this regard. The attached resolution and first reading of the ordinance represent a non-binding alternative that would allow the Agency to remain in operation and allow the City and Agency to continue to have control over redevelopment and affordable housing activities within the City of Lake Elsinore. The City's finance team is evaluating and compiling financial data as to the full extent of the ABx1 27 voluntary program to determine if sufficient Agency funds will be available in the future to fund the payment obligation and the specifics impacts of the legislation. However, in order to comply with the state mandated timelines, the City has been presented with the non-binding resolution for adoption along with the first reading of the required ordinance. The Finance Team intends to present more definitive numbers to the City Council prior to the City Council's consideration of final adoption (second reading) of the ordinance. Accordingly, the actions tonight assure that the City has sufficient time to elect into the voluntary payment program but does not irrevocably commit the City to that course of action. Fiscal Impact The Agency anticipates having sufficient funds to transfer to the City so that the City can make the requisite ABx1 27 payment. However, the City's Finance Team will finalize a definitive analysis prior to consideration of the second reading of the ordinance. Recommendation 1. Adopt Resolution No. 2011-050 declaring the City's intention to enact an Ordinance whereby the City shall elect to comply with and participate in the alternative voluntary redevelopment program contained in Part 1.9 of Division 24 of the California Health and Safety Code 2. Waive further reading and introduce by title only Ordinance No. 2011-1293 electing to comply with and participate in the alternative voluntary redevelopment Page 2 of 12 Resolution And Ordinance Re Election To Comply August 9, 2011 Page 3 program contained in Part 1.9 of Division 24 of the California Health and Safety Code Prepared by: Barbara Leibold City Attorney Approved by: Robert A. Brady uâ–º~ ) City Manager lll~~~ Attachment: Resolution No. 2011-050 Ordinance No. 2011-1293 Page 3 of 12 Page 4 of 12 RESOLUTION NO. 2011-050 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, DECLARING ITS INTENTION TO ENACT AN ORDINANCE WHEREBY THE CITY SHALL ELECT TO COMPLY WITH AND PARTICIPATE IN THE ALTERNATIVE VOLUNTARY REDEVELOPMENT PROGRAM CONTAINED IN PART 1.9 OF DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE WHEREAS, the Redevelopment Agency of the City of Lake Elsinore ("Agency") is a community redevelopment agency organized and existing under the California Community Redevelopment Law, Health and Safety Code Sections 33000, et seq. ("CRL"), and has been authorized to transact business and exercise the powers of a redevelopment agency pursuant to action of the City Council ("City Council") of the City of Lake Elsinore ("City"); and WHEREAS, the Agency is engaged in activities necessary and appropriate to carry out the Redevelopment Plan for the Rancho. Laguna Redevelopment Project No. I, as amended, the Redevelopment Plan for Rancho Laguna Redevelopment Project No. Il, as amended, and the Redevelopment Plan for Rancho Laguna Redevelopment Project No. III, as amended which were adopted by and through a series of ordinances of the City Council of the City; and WHEREAS, Parts 1.8, 1.85 and 1.9 of Division 24 of the Health and Safety Code were added to the CRL by ABX1 26 and ABX1 27, which measures purport to become effective immediately. ABX1 26 and ABX1 27, which are trailer bills to the 2011-12 budget bills, were approved by both houses of the Legislature on June 15, 2011 and signed by the Governor on June 28, 2011; and WHEREAS, Part 1.85 of the CRL ("Part 1.85") provides for the statewide dissolution of all redevelopment agencies, including the Agency, as of October 1, 2011, and provides that, thereafter, a successor agency shall administer the enforceable obligations of the Agency and otherwise wind up the Agency's affairs, all subject to the review and approval by an oversight committee; and WHEREAS, Part 1.8 of the CRL ("Part 1.8") provides for the restriction of activities and authority of the Agency in the interim period prior to dissolution to certain "enforceable obligations" and to actions required for the general winding up of affairs, preservation of assets, and certain other goals delineated in Part 1.8; and WHEREAS, the dissolution of the Agency would be detrimental to the health, safety, and economic well-being of the residents of the City and cause irreparable harm to the community, because, among other reasons, the redevelopment activities and projects made possible, implemented, and funded by the Agency are highly significant and of enduring benefit to the community and the City, and are a critical component of its future; and WHEREAS, Part 1.9 of the CRL ("Part 1.9") provides that a redevelopment agency may continue in operation if a city or county that includes a redevelopment agency adopts an Page 5 of 12 CITY COUNCIL RESOLUTION NO. 2011-_ Page 2 of 4 ordinance agreeing to comply with and participate in the Alternative Voluntary Redevelopment Program established in Part 1.9 ("Program"); and WHEREAS, as a condition of the Agency's continued existence and operation of its redevelopment agency, the City is required to make certain annual remittances to the county auditor-controller pursuant to Chapter 3 of Part 1.9, beginning with a larger upfront remittance for the 2011-2012 fiscal year ("First Remittance"), to be paid in two equal installments on January 15, 2012 and May 15, 2012; and WHEREAS, the City expects it will have sufficient moneys and revenues to fund an amount equal to the City's payment of the First Remittance and further expects to have sufficient moneys and revenues to fund the subsequent annual remittances required by Part 1.9; and WHEREAS, the City's needs are such that it can commit to spend the funds received from the Agency pursuant to the Agreement to Transfer Tax Increment (defined below) to finance activities within the Redevelopment Project that are related to accomplishing the goals of the Redevelopment Project; and WHEREAS, the City intends to adopt the ordinance required by Part 1.9, in order to allow the Agency to continue in operation and perform its functions ("Ordinance"); and WHEREAS, the City intends to adopt the Ordinance and desires to forestall the dissolution of the Agency until November 1, 2011 to allow the City sufficient time to enact the Ordinance; and WHEREAS, the City and Agency desire to enter into an agreement pursuant to CRL Section 34194.2 whereby the Agency shall make an initial transfer of a portion of its tax increment to the City in an amount equal to the First Remittance, and thereafter to transfer amounts of tax increment equal to any subsequent remittance which the City is required to make to the county auditor-controller pursuant to the City's participation in the Program ("Agreement to Transfer Tax Increment"); and WHEREAS, the City is aware that the validity, passage, and applicability of ABX1 26 and ABX1 27 is the subject of a judicial challenge; and WHEREAS, the City, by the adoption of this resolution, does not represent, disclaim, or take any position whatsoever on the issue of the validity of ABX1 26 or ABX1 27, but rather the City seeks to comply with the Constitution and laws of the State of California, including Part 1.9, in order to preserve the ability of the Agency to continue to operate and thereby benefit the community; and WHEREAS, the City has duly considered all other related matters and has determined that the City's participation in the Program is in the best interests of the Agency, the City, and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements. Page 6 of 12 CITY COUNCIL RESOLUTION NO. 2011-_ Page 3 of 4 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. The foregoing Recitals are incorporated into this Resolution by this reference, and constitute a material part of this Resolution. SECTION 2. Pursuant to CRL Section 34193(b), the City hereby expresses its intent to adopt the Ordinance to comply with Part 1.9. This resolution is that "nonbinding resolution of intent" referred to in CRL Section 34193(b) and shall be interpreted and applied in all respects in accordance with such section and Part 1.9, to the fullest extent permitted by law. SECTION 3. On or before October 1, 2011, the City Manager (or his designee) is hereby authorized and directed to notify the county auditor, the State Department of Finance, and the Controller of the State concerning the resolution, in accordance with Section 34193(b). SECTION 4. The City Attorney is hereby authorized to bring an action in the Superior Court pursuant to CRL Sections 33500 and 33501 to determine the validity of the Ordinance referred to in this resolution, or the validity of any bonds contemplated to be issued by the Agency or other material contracts of the Agency, or any findings of the City Council related thereto, upon the determination of the City Manager that such action is reasonably necessary or appropriate to facilitate the consummation of any Agency transaction for which governing board approval has been given. SECTION 5. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Lake Elsinore, California, this 9th day of August 2011. ROBERT MAGEE, MAYOR PRO TEM CITY OF LAKE ELSINORE Attest: VIRGINIA BLOOM CITY CLERK APPROVED AS TO FORM: BARBARA ZEID LEIBOLD CITY ATTORNEY Page 7 of 12 Page 8 of 12 ORDINANCE NO. 2011-1293 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ELECTING TO COMPLY WITH AND PARTICIPATE IN THE ALTERNATIVE VOLUNTARY REDEVELOPMENT PROGRAM CONTAINED IN PART 1.9 OF DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE WHEREAS, the Redevelopment Agency of the City of Lake Elsinore ("Agency") is a community redevelopment agency organized and existing under the California Community Redevelopment Law, Health and Safety Code Sections 33000, et seq. ("CRL"), and has been authorized to transact business and exercise the powers of a redevelopment agency pursuant to action of the City Council ("City Council") of the City of Lake Elsinore ("City"); and WHEREAS, the Agency is engaged in activities necessary and appropriate to carry out the Redevelopment Plan for the Rancho Laguna Redevelopment Project No. I, as amended, the Redevelopment Plan for Rancho Laguna Redevelopment Project No. ll, as amended, and the Redevelopment Plan for Rancho Laguna Redevelopment Project No. III, as amended which were adopted by and through a series of ordinances of the City Council of the City. WHEREAS, Parts 1.8, 1.85 and 1.9 of Division 24 of the Health and Safety Code were added to the CRL by ABX1 26 and ABX1 27, which measures purport to become effective immediately. ABX1 26 and ABX1 27, which are trailer bills to the 2011-12 budget bills, were approved by both houses of the Legislature on June 15, 2011 and signed by the Governor on June 28, 2011; and WHEREAS, Part 1.85 of the CRL ("Part 1.85") provides for the statewide dissolution of all redevelopment agencies, including the Agency, as of October 1, 2011, and provides that, thereafter, a successor agency shall administer the enforceable obligations of the Agency and otherwise wind up the Agency's affairs, all subject to the review and approval by an oversight committee; and WHEREAS, Part 1.8 of the CRL ("Part 1.8") provides for the restriction of activities and authority of the Agency in the interim period prior to dissolution to certain "enforceable obligations" and to actions required for the general winding up of affairs, preservation of assets, and certain other goals delineated in Part 1.8; and WHEREAS, the dissolution of the Agency would be detrimental to the health, safety, and economic well-being of the residents of the City and cause irreparable harm to the community, because, among other reasons, the redevelopment activities and projects made possible, implemented, and funded by the Agency are highly significant and of enduring benefit to the community and the City, and are a critical component of its future; and Page 9 of 12 WHEREAS, Part 1.9 of the CRL ("Part 1.9") provides that a redevelopment agency may continue in operation if a city or county that includes a redevelopment agency adopts an ordinance agreeing to comply with and participate in the Alternative Voluntary Redevelopment Program established in Part 1.9 ("Program"); and WHEREAS, as a condition of the Agency's continued existence and operation of its redevelopment agency, the City is required to make certain annual remittances to the county auditor-controller pursuant to Chapter 3 of Part 1.9, beginning with a larger upfront remittance for the 2011- 2012 fiscal year ("First Remittance"), to be paid in two equal installments on January 15, 2012 and May 15, 2012; and WHEREAS, the City will have sufficient moneys and revenues to fund an amount equal to the City's payment of the First Remittance and expects to have sufficient moneys and revenues to fund the subsequent annual remittances required by Part 1.9; and WHEREAS, the City's needs are such that it can commit to spend the funds received from the Agency pursuant to the Agreement to Transfer Tax Increment (defined below) to finance activities within the Redevelopment Project that are related to accomplishing the goals of the Redevelopment Project, including but not limited to attraction and retention of a wide range of businesses, rehabilitation of deteriorated and obsolete structures, development of housing, improvement of infrastructure and public facilities, crime reduction, and blight elimination; and WHEREAS, the City and Agency intend to execute an agreement pursuant to CRL Section 34194.2, whereby the Agency shall make an initial transfer of a portion of its tax increment to the City in an amount equal the First Remittance, and thereafter to transfer amounts of tax increment equal to any subsequent remittance which the City is required to make to the county auditor-controller pursuant to the City's participation in the Program ("Agreement to Transfer Tax Increment"); and WHEREAS, the City is aware that the validity, passage, and applicability of ABX1 26 and ABX1 27 is the subject of a judicial challenge; and WHEREAS, the City, by the adoption of this Ordinance, does not represent, disclaim, or take any position whatsoever on the issue of the validity of ABX1 26 or ABX1 27, but rather the City seeks to comply with the Constitution and laws of the State of California, including Part 1.9, in order to preserve the ability of the Agency to continue to operate and thereby benefit the community; and WHEREAS, the City reserves the right to appeal the California Director of Finance's determination of the Fiscal Year 2011-12 community remittance, as provided in Health and Safety Code Section 34194; and WHEREAS, while the City currently intends to make these community remittances, they shall be made under protest and without prejudice to the City's right to recover such amounts and interest thereon, to the extent there is a final determination that AB 1X 26 and AB 1X 27 are unconstitutional; and -2- Page 10 of 12 WHEREAS, the City reserves the right, regardless of any community remittance made pursuant to this Ordinance, to challenge the legality of AB 1X 26 and AB 1X 27; and WHEREAS, to the extent a court of competent jurisdiction enjoins, restrains, or grants a stay on the effectiveness of the Alternative Voluntary Redevelopment Program's payment obligation of AB 1X 26 and AB 1X 27, the City shall not be obligated to make any community remittance for the duration of such injunction, restraint, or stay; and WHEREAS, the City has duly considered all other related matters and has determined that the City's participation in the Program is in the best interests of the City, and the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements. THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ORDAINS AS FOLLOWS: SECTION 1. The foregoing recitals are true and correct. SECTION 2. The City hereby finds that (i) the dissolution of the Agency would be detrimental and cause irreparable harm to the community and to the health, safety, and economic well-being of the citizens of the City, and (ii) the types of activities and projects made possible, implemented, and funded by the Agency are highly significant and of enduring benefit to the community and the City, and are a critical component of its future. SECTION 3. The City hereby commits to spend those funds received under the Agreement to Transfer Tax Increment or otherwise pursuant to CRL Section 34194.2 to finance activities within the Redevelopment Project that are related to accomplishing the goals of the Redevelopment Project. SECTION 4. The City hereby ordains that the City shall comply with the Constitution and the laws of the State of California, including Part 1.9, including the making of the remittances referred to in CRL Section 34194(c) at the times and in the manner described in Part 1.9. This ordinance is that ordinance referred to in CRL Section 34193 and shall be interpreted and applied in all respects so as to comply with Part 1.9, to the fullest extent permitted by law. SECTION 5. On or before November 1, 2011, the City Manager (or his designee) is hereby authorized and directed to notify the county auditor-controller, the Controller of the State, and the State Department of Finance that the City agrees to comply with the provisions of Part 1.9 as provided under CRL Section 34193, such notice to be in accordance with CRL Section 34193.1. SECTION 6. The City's remittances to the county auditor-controller made pursuant to Part 1.9 may be paid from any legally available funds of the City not otherwise obligated for other uses in accordance with CRL Section 34194.1. Nothing -3- Page 11 of 12 herein is intended or shall be interpreted to require any payments or impose any financial or other obligation of the City other than in accordance with the Constitution and laws of the State of California, including Part 1.9. SECTION 7. Except as set forth in Section 8, below, the City Council hereby determines that the City shall make the community remittances set forth in CRL Section 34194, et seq. SECTION 8. City shall not make any community remittance in the event a court of competent jurisdiction either grants a stay on the enforcement of AB 1X 26 and AB 1X 27 or determines that AB 1X 26 and AB 1X 27 are unconstitutional and therefore invalid, and all appeals therefrom are exhausted or unsuccessful, or time for filing an appeal therefrom has lapsed. Any community remittance shall be made under protest and without prejudice to the City's right to recover such amount and interest thereon in the event that there is a final determination that AB 1X 26 and AB 1X 27 are unconstitutional. If there is a final determination that AB 1X 26 and AB 1X 27 are invalid, this Ordinance shall be deemed to be null and void and of no further force or effect. SECTION 9. If any provision, clause, sentence or paragraph of this Ordinance or the application thereof to any person or circumstance shall be held invalid, such invalidity shall not affect the other provisions of this Ordinance and are hereby declared to be severable. SECTION 10. This Ordinance shall take effect thirty (30) days after the date of its final passage or such later date as may be designated by the City Council. The City Clerk shall certify as to adoption of this Ordinance and cause this Ordinance to be published and posted in the manner required by law. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Lake Elsinore, California, on this day of 2011. ROBERT MAGEE, MAYOR PRO TEM CITY OF LAKE ELSINORE ATTEST: VIRGINIA BLOOM CITY CLERK APPROVED AS TO FORM: BARBARA ZEID LEIBOLD CITY ATTORNEY -4- Page 12 of 12