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Home My WebLink AboutStaff Report 09/19/2011 3.GA geowlal Items#3. A i DATE:, "September f-0,2011. 41 Honorable Mayor arid' Members of the City Council /Honorable Chair and Members of the Petaluma Community Development Commission through the City Manager/Executive Director FROM: Ingrid Alverde, Redevelopment/Economic Development Manager SUBJECT: Consideration of a Non -Binding Resolution of. the: City Council of the City Of Petaluma Declaring.,: its Intent to Participate ,in the Voluntary Alternative Redevelopment..Program RECOMMENDATION It is recommended that the City Council approve the Resolution Declaring its Intent to Participate in the Voluntary Alternative'Redevelopment Program. " BACKGROUND The Governor signed several budget -related bills in late June 2011, including AB x 26 (The "Dissolution Act"), which eliminates redevelopment .agencies,' and AB x 1 27(the "Voluntary Program Act"), which allows an agency to remain active if the City agrees to make annual payments to the County Auditor -Controller. DISCUSSION Since the enactment of the legislation, the California Redevelopment Association filed a lawsuit p ("Court"), f P " ociation, et al. v. with `the!California Supreme Court Court Cali ornia Redevelo ment Ass Ana Matosantos,,et, al:, arguing that both Acts are unconstitutional. On August 11, 2011, the Courtissued, and .Order and a revised Order on August 11, 2011 staying portions of the Dissolution .Act and all' of .the Voluntary Program Act until the Court renders a decision on the case. Prior to the Court order, 'cities had until October 1, 2011 to adopt an ordinance or a resolution of intent agreeing to 'annual payments in return for the ability to retain their redevelopment agencies. Agencies.: adopting a resolution of intent prior_ to the, October 1„ 2011 were given until November 1, 2011 to .adopt the,required ordinance. Staff had_ originally prepared the required ordinance for council consideration on August 24, 2011 but pulled, the, item as, a result of the court order. Staff recommends that the Council adopt 'the attached, non-binding resolution of Agenda Review: (2� City Attorney Finance Director City Manager��( .� intent to participate in the 'Voluntary 'Program so that the potential paymerits associated with the Voluntary Program are included in this year's Statement of Indebtedness. This action will also protect the agency's option to participate in. the Program .and, to ,retain control of the City's Redevelopment activities, programs and projects by adhering to the original State requirements. Staff will present a conditional ordinance for Council review in October, prior to the State's November 1, 2011 deadline. FINANCIAL IMPACTS This action will require PCDC to make annual payments to the auditor controller from its. tax increment revenues in the amount of. approximately $5.2 million"in 2012 and $1.2 million° every year thereafter. Staff estimates that PCDC will have sufficient funds to make the payment. ATTACHMENTS, 1. Non=Binding Resolution of the City Council of the City of Petaluma Declaring its Intent to Participate in the Voluntary Alternative Redevelopment Program Page 2 RESOLUTION NO. A NON-BINDING RESOLD' TION,OF THK'CITY ,CO.UN.CIL.OF THE CITY OF PETALUMA 'DE'CLARING'ITS INTENT TO:PARTICIPATE IN .THE VOLUNTARY ALTERNATIVE REDEVELOPMENT' PROGRAM AND TO ENTER INTO A REMITTANCE AGREEMENT BY AND BETWEEN THE CITY OF PETALUMA AND THE PETALUMA COMMUNITY DEVELOPMENT COMMISSION WHEREAS, the. City Council of the City of Petaluma ("City") approved and adopted the Redevelopment Plan for the Central Business District Redevelopment Project and the Petaluma Community Development Project ("Redevelopment Plans"), covering certain properties within the City ("Project Areas"); and WHEREAS, the Petaluma Community Development Commission ("Commission") is a redevelopment agency engaged in' activities to execute and implement the Redevelopment Plans pursuant to the provisions of the California Community Redevelopment Law (Health and 'Safety Code Section 33000, et seq.) (the "CRL"); and WHEREAS, the Legislature of the State of California adopted Assembly Bill xl 26 ("AB 26"), which amends Sections 33500, 33501, 33607.5 and 33607.7 of the CRL and adds Part 1.8 (commencing with Section 34161) and Part. 1.85 (commencing with Section,34170) to Division 24 of the Health and Safety Code, and adds Sections 97.4 and 98.2 to the Revenue and Taxation Code; and WHEREAS, concurrently with the adoption of AB 26, the State Legislature adopted Assembly Bill x 127 ("AB 27"), which adds Part 1.9 (commencing with Section 34192) to Division 24 of the Health and Safety Code ("Alternative Voluntary Redevelopment Program");, and WHEREAS, AB 26 suspends virtually all redevelopment activities as of'its effective date and dissolves the Commission effective October 1, 2011 unless the,City adopts an ordinance agreeing to comply with the Alternative Voluntary Redevelopment Program; and WHEREAS, pursuant to Health and Safety Code Section_ 34192, if a city that includes a redevelopment agency complies with all requirements and obligations ,contained in the Altemative VoluntaryRedevelopment Program established in AB 27, the redevelopment agency will' be exempt: from the ,provisions 'of AB 26, including but not limited to the suspension and dissolution provisions; and any otherconflicting provision of law; and WHEREAS, in keeping with the goals of the Commission toeliminate an&teduce blight in accordance with the Redevelopment'Plans and the Implementation Plan for the ProjectAreas, the City desires to comply with the requirements and obligations contained in AB 27 in order to continue redevelopment activities within the City and to fund projects that -will eliminate blighting conditions in the Project Areas; and WHEREAS, pursuant to Health and Safety Code Section 34193, a redevelopment agency may continue to exist and carry out the provisions of the CRL only upon the enactment of an ordinance adopted by the City to comply with the provisions of AB 27 on or before November 1, 2011; and WHEREAS, to that end, on August 24, 201, the City Council was scheduled to introduce an Ordinance to comply with the requirements and obligations contained _*in AB 27 in order to continue redevelopment activities within the'City and to fund projects that will. eliminate blighting conditions in the Project Areas, and scheduled a second reading and 'adoption of said Ordinance for the City Council's next regularly scheduled meeting on September 12; 2011; and WHEREAS, the August 24, 2014 Agenda forthe City Council and the Commission Board also included for consideration the adoption of 'resolutions to appropriate funds to make certain remittances to the County Auditor -Controller pursuant to Section.34T04 and.to approve a�Remittance Agreement between the City and the.Commission pursuant to Health and Safety Code Section 34194.2 (collectively, -the "AB 27 Agenda Items"); and WHEREAS, on August -,11,,'20:1 I, in California Redevelopment, Association, et al. v. Ana Matosantos, .et al., a challenge to the constitutionality of AB 26 and AB 27; the California Supreme Court ,issued an order staying portions of AB 26 and all.of AB 27, pending its decision in the case; and WHEREAS, on August 17; 2011, the California Supreme Court issued an order modifying its order of August 11, 2011, in part, but continuing the stay of the Voluntary Alternative Redevelopment Program; and WHEREAS; as of September 19, 2011, the City and Commission remain subject to the California Supreme Court's stay orders; and WHEREAS, in order to ensure, that the'voluntary payment to the, County Auditor -Controller pursuant to Section.34194 is, included in the October 1, 2011 Statement of Indebtedness of the Commission, the City Council de'sire's to declare its intention to participate in the Alternative Voluntary Redevelopment Program. NOW,'THEkEFORE, BE IT RESOLVED BY THE CITY OF PETALUMA AS FOLLOWS: Section 1. All of the recitals above are true and correct and are incorporated herein. Section 2. - The City Council of the City of'Petaluma declares its intent, if 'and when legally permitted -to do so; to: (1) adopt an Ordinance providing for th'e.:City of Petaluma's participation in the Alternative Voluntary Redevelopment Program; and (2) take all steps authorized pursuant to AB 27 to implement said Ordinance, including without limitation entering into a Remittance Agreement with the Petaluma Community Development Commission. Section.,:, The City desires to reserve all of its rights to challenge the validity of any and all provisions, o'f AB 26 and AB 27 in any administrative or Judicial proceeding, or to repeal such Ordinance as adopted, in the event that any provisions of AB 26 or AB 27 are found to 'be invalid or unl'awfu'l, without prejudice to the City's right to recover any amounts remitted under AB 27. Section 4. If any provision, clause, section or part of this Resolution is found to be unconstitutional, illegal or invalid, such finding shall affect only such provision, sentence, clause, section or part, and shall not affect or impair any of the remaining parts. 1715097.1