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HomeMy WebLinkAboutStaff Report 10/03/2011 4.D • A Itom/ #4.i _1858 ' DATE: October 3, 2011 TO: Honorable Mayor and 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:: Introduction of an. Ordinance Authorizing the City of Petaluma to Participate in the Voluntary Alternative Redevelopment. Program. RECOMMENDATION It is recommended that the 'City Council introduce the Ordinance Authorizing Petaluma to Participate in the Voluntary Alternative Redevelopment Program. BACKGROUND The Governor signed several budget- related bills in late June 2011, including AB xl 26 (The "Dissolution Act "), which eliminates redevelopment agencies, and AB xl 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. Since the enactment of the legislation, the California Redevelopment Association filed a lawsuit with the California Supreme Court ( "Court"), California Redevelopment 'Association, et al. v. Ana Matosantos, et al. arguing'that both Acts are unconstitutional. On August 11, 2011, the Court issued an Order and supplemental Orders on August 17 and September 14, 2011, staying portions of the Dissolution Act and virtually all of the Voluntary Program Act until the Court renders a decision on the case. DISCUSSION 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. On,September 19, 2011, the City Council adopted a resolution of intent to adopt the ordinance opting in to the Voluntary Redevelopment Program. Accordingly, staff now Agenda Review: City Attorney Finance Director City Manager - recommends that the;City Council adopt the attached ordinance opting in to the Voluntary Program. This action will protect the City'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. The Ordinance will only become effective if and when the Court lifts the Stay or declares the Voluntary Alternative Redevelopment Program to be constitutional. FINANCIAL IMPACTS This action will require the City to make annual payments to the County Auditor- Controller, from . tax increment revenues transferred from PCDC to the City, 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 payments. ATTACHMENTS 1. An Ordinance of the City Council Authorizing the City of Petaluma to Participate in the Voluntary Alternative Redevelopment Program. Page 2 ATTACHMENT 1 ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PETALUMA, CALIFORNIA, DETERMINING IT WILL COMPLY WITH THE VOLUNTARY ALTERNATIVE REDEVELOPMENT PROGRAM PURSUANT TO PART 1.9 OF DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE IN ORDER TO PERMIT THE CONTINUED EXISTENCE AND OPERATION OF THE PETALUMA COMMUNITY DEVELOPMENT COMMISSION WHEREAS, pursuant to the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq. (the "CRL "), the City Council (the "City Council ") of the City of Petaluma (the "City ") approved and adopted the Redevelopment Plan for the Central Business District Redevelopment Project and the Redevelopment Plan for the Petaluma Community Development Redevelopment Project ( "Redevelopment Plans ") covering certain properties within the City (the "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 CRL; and WHEREAS, the Commission has undertaken redevelopment projects in the Project Areas to eliminate blight, improve public facilities and infrastructure, construct and renovate affordable housing, and work with private industry to create jobs and expand the local economy; and WHEREAS, the Commission has plans to implement' a variety of redevelopment programs and projects in the future to continue to eliminate and prevent blight, stimulate and expand economic growth, and improve public infrastructure: and WHEREAS, ABxl 26 (the "Dissolution Act ") and ABx1 27 (the "Voluntary Program Act "), (collectively, the "Redevelopment Restructuring Acts "), have been enacted to significantly modify the CRL generally as follows: the Dissolution Act immediately suspends all new redevelopment activities and incurrence of indebtedness, and dissolves redevelopment agencies effective October 1, 2011, . and the Voluntary Program Act, through the addition of Part 1.9 to the CRL (the "Voluntary Alternative Redevelopment Program "), allows a redevelopment agency to avoid dissolution under the Dissolution Act by opting into an alternative voluntary redevelopment program requiring specified annual contributions to local school and special districts; and WHEREAS, specifically, Section 34193(a) of the CRL (as added to the CRL by the Voluntary Program Act) authorizes the City Council to enact an ordinance to comply with Part Page 3 ' I 1.9 of the CRL, thereby exempting the Commission from the provisions of the Dissolution Act, and enabling the Commission to continue to exist and function under the CRL, so long as the City complies with the Voluntary Alternative Redevelopment Program; and WHEREAS, through the adoption of this Ordinance, it is the intent of the City Council to enact the ordinance described in Section 34193(a) of the CRL and to participate in the Voluntary Alternative Redevelopment Program set forth in Part 1.9 of the CRL; and WHEREAS, pursuant to Section 34193.2(b) of the CRL, participation in the Voluntary Alternative Redevelopment Program requires remittance of certain payments as set forth in the Voluntary Program Act (as further described below); and WHEREAS, by adoption of this Ordinance the City Council does not intend to waive any rights of appeal regarding the amount of any remittance payments established by the California Department of Finance, as provided in the Voluntary Program Act, or to waive its rights to object to the Redevelopment Restructuring Acts, or any portions of them, in general; and WHEREAS, on August 11, 2011, the California Supreme Court (the "Court") agreed to review the California Redevelopment Association and League of California Cities' petition challenging the constitutionality of the Redevelopment Restructuring Acts and issued an order granting a partial stay on specified portions of the Redevelopment Restructuring Acts, as modified on August 17, 2011 and affirmed on September 14, 2011 (the "Stay "), including a stay of the provisions of the Voluntary Program Act; and WHEREAS, accordingly, the City Council intends to adopt this Ordinance understanding that it will be effective only upon the lifting of the Stay and the Court's determination that the Voluntary Program Act is constitutional. THE CITY COUNCIL OF THE CITY OF PETALUMA, CALIFORNIA, DOES ORDAIN AS FOLLOWS: Section 1. Recitals. The Recitals set forth above are true and correct and incorporated herein by reference. Section 2. Participation in the Voluntary Alternative. Redevelopment Program. To the extent required by law to maintain the existence and powers ofthe Commission under the CRL (including the Redevelopment Restructuring Acts), the City Council hereby enacts the ordinance authorized by Section 34193(a) of the CRL, whereby the City elects to and will comply with the provisions of Part 1.9 of the CRL, including the making of the community remittance payments called for in Section 34194 of the CRL (the "Remittance Payments "), and whereby the Commission will not be subject to dissolution or the other prohibitions and limitations of Parts 1.8 and 1.85 of CRL as added by the Dissolution Act. Section 3. Effect of Stay or. Determination of Invalidity, The City shall not make any Remittance Payments during the Stay or in the event the Court or any court of competent Page 4 jurisdiction determines that ABx1 26 and/or ABx1 27 are unconstitutional and therefore invalid, and all appeals therefrom are exhausted or unsuccessful, or the time for appeal therefrom has lapsed. Any Remittance Payments 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 of unconstitutionality. If there is a final determination of invalidity of ABx 1 26 and/or ABx 1 27, this Ordinance shall be deemed to be null and void and of no further force or effect. Section 4. Additional Understandings and Intent. It is the understanding and intent of the City Council that, once the Commission is again authorized to enter into agreements under the CRL, the City will.enter into an agreement with the Commission as authorized pursuant to Section 34194.2 of the CRL, whereby the Commission will transfer annual portions of its tax increment to the City in amounts not to exceed the annual Remittance Payments (the "Commission Transfer Payments ") to enable the City, directly or indirectly, to make the annual Remittance Payments. Unless otherwise specified by resolution of the City Council, it is the City Council's intent that the City's annual Remittance Payments shall be made exclusively from the Commission Transfer.. Payments or from other funds that become available as a result of the City's receipt of the Commission Transfer Payments. The City Council does not intend, by enactment of this Ordinance, to pledge any of its general fund revenues or other assets to make the Remittance Payments, it being understood by the City Council that any Remittance Payments will be funded solely from the Commission Transfer Payments and/or other assets transferred to the City in accordance with the Voluntary Program Act. Section 5. Implementation. The City Manager or his designee is hereby authorized to take all necessary actions to implement this Ordinance and comply with the Voluntary Program Act, including, without limitation, providing required notices to the County Auditor - Controller, the State Controller, and the Department of Finance, entering into any agreements with the Commission to obtain the Commission Transfer Payments, and making the Remittance Payments. Section 6.. CEQA. The City Council finds, under Title 14 of the .California Code of Regulations, Section 15378(b)(4), that this Ordinance is exempt from the requirements of the California Environmental Quality Act ( "CEQA ") in that it is not 'a project, but instead consists of the creation and continuation of a governmental funding mechanism for potential future projects and programs, and does not commit funds to any specific project or program. The City Council therefore directs that a Notice of Exemption be filed with the County Clerk of the County of Sonoma in accordance with CEQA Guidelines. Section 7. Custodian ofRecor.ds. The documents and materials that constitute the record of proceedings on which thes findings are based are located at the City Clerk's Office located at 11 English Street, Petaluma, CA 94952. The custodian for these records is the City Clerk. Section 8. Severability. If any provision of this Ordinance or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Ordinance which can be given effect without the invalid provision or Page 5 • application, and to this end the provisions of the Ordinance are severable. The City Council hereby declares, that it would have adopted this Ordinance irrespective of the invalidity of any particular portion thereof. Section 9. Publication. The City Clerk is hereby directed to publish or post this Ordinance or a synopsis thereof `for the period and in the manner provided by the City Charter and any other applicable law. Section 10. Enactment and Effective Dates. This Ordinance shall be deemed enacted as of the date of its adoption for purposes of Section 34193(a) of the CRL, and shall take effect and will be enforceable thirty (30) days after its adoption, conditioned upon the lifting of the Stay and the Court's determination that the Voluntary Program Act is constitutional. INTRODUCED this 3 day of 2011. ADOPTED at a regular meeting of the City Council on the day of , 2011. 1721015.1 Page 6