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HomeMy WebLinkAboutStaff Report 3.E 01/09/2012 Age Iteivw#3 .E z ■LU 185e, DATE: January 9, 2012 TO: Honorable Mayor and Council Membe s'ihrough City Manager FROM: John Brown, City Mana Gaebler, Housing Administrator SUBJECT: Resolution Electing To Serve As the Successor Agency to the Petaluma Community Development Commission (PCDC) Pursuant to Health and Safety Code Section 34177 RECOMMENDATION It is recommended that the City Council adopt the attached Resolution Electing To Serve As the Successor Agency to the Petaluma Community Development Commission (PCDC) Pursuant to Health and Safety Code Section 34177. BACKGROUND Responding to a declared state fiscal emergency, in the summer of 2011 the State Legislature enacted two measures intended to stabilize school funding by reducing or eliminating the allocation of property tax revenues to the State's redevelopment agencies ("RDA's"). Assembly Bill IX 26 (the "Dissolution Act") bars RDA's from engaging in new business and provides for their windup and dissolution. AB IX 27 offered an alternative: redevelopment agencies could continue to operate if the cities and or counties that created them agreed to make payments into funds benefitting the school and special districts. In October 2011, the California Redevelopment Association (the"CRA") and League of California Cities (and others) sought relief from both bills from the California Supreme Court. On December 29, 2011, the California Supreme Court delivered a bifurcated decision, effective immediately, determining that all RDAs will be dissolved under the Dissolution Act and that none will have the opportunity to "opt into" continued existence under AB 1X 27. Although the CRA and various housing development advocacy groups (including many of Petaluma's nonprofit agencies) have indicated their intent to seek legislative relief to continue economic development and affordable housing activities in California, it is premature to speculate on the nature or likely outcome of such proposals. Therefore, there are certain decisions and actions that each city or county (the "Sponsoring Community") that established an existing redevelopment agency must make in January 2012. The first requires a Council decision as to whether or not it will designate the City as the "Successor Agency" to the Petaluma Community Development Commission. _ _ Agenda Review: City Attorney Finance Director City Manager DISCUSSION The Dissolution Act, which was found to be constitutional by the Supreme Court, does the following: • Continues to suspend and prohibit of most redevelopment activities in effect since late June 2011 • Dissolves RDAs as of February 1, 2012 • Creates "Successor Agencies" and local "Oversight Board" to continue to satisfy enforceable obligations of each former RDA, and administer the dissolution and wind-down of each dissolved RDA; and • Establishes roles for,the County-Auditor Controller, the Department of Finance and the ' State Controller's Office in the dissolution process and satisfaction of enforceable obligations of former RDAs. As noted above, as of February 1, 2012 every RDA will be dissolved and a Successor Agency will be created for each RDA. The Successor Agency will be the Sponsoring Community of the RDA (the City) unless it elects not to serve in that capacity. Technically, a Sponsoring Community needs to adopt a resolution and deliver it to the County Auditor-Controller no later than January 13, 2012 only if it elects not to act as the Successor Agency for its former RDA. (An alternative resolution declining to serve as Successor Agency is also attached). However, staff has been advised by the City Attorney that a resolution electing to serve as Successor Agency will indicate a clear statement of intent. Among other duties, the Successor Agency will be responsible for staffing the Oversight Board which will make decisions about the liquidation of RDA assets. The Oversight Board of the Successor Agency will consist of 7 members appointed by the following agencies: County Board of Supervisors (two members); Mayor (one member); County Superintendent of Education (one member); Chancellor of California Community Colleges (one member); Largest special district taxing entity (one member); and a former RDA employee appointed by the Mayor (one member). Any decisions made by the Oversight Board are subject to review by the State Department of Finance and the State Controller's Office. The advantages of serving in this capacity are clearly defined in the Fiscal Impact section below. If Council chooses not to assume that role, the Successor Agency will be "the first taxing entity submitting to the County Auditor-Controller a duly adopted resolution electing to become the "Successor Agency." If no taxing entity steps forward, the Governor will appoint three County residents to serve in that capacity. FISCAL IMPACTS The City's financial liability for serving as the Successor Agency is expressly limited in Health & Safety Code Section 34173(e) to the property tax increment the Successor Agency receives to pay enforceable obligations and the value of any PCDC assets transferred to it, so the City's 2 General Funds and other funds are not expected to be at risk if the City elects to be the Successor Agency to the dissolved PCDC. The Enforceable Obligation Payment Schedule (Attachment #2) that was approved by the City Council lists all PCDC enforceable obligations through 2011. It will be amended to cover the period January 1 through June 30, 2012 and will cover the obligations that will be paid by the Successor Agency, using bond proceeds as well as any balance in the redevelopment funds, until the Successor Agency can adopt, and the Oversight Board approves, a Recognized Obligation Payment Schedule There are significant financial impacts resulting from the dissolution of PCDC. PCDC's Administrative Fund (Fund 5400) with a balance of approximately $14,000,000 and the Housing Fund balance of$2,100,000 are in jeopardy of being transferred to the County for distribution among the taxing entities after payment of the enforceable obligations. The new property tax revenue to the City's General Fund generated from PCDC's dissolution will be approximately $498,000 annually. This amount could increase or decrease depending on changes in assessed valuation. An "administrative payment" to the Successor Agency is provided in Fiscal Year 2011-12 at 5% of the former RDA's tax increment, which should be approximately $700,000 and 3% each year after that but not less than $250,000 annually. This payment is given to the Successor Agency to meet the administrative expenses of serving as the Successor Agency, winding down the redevelopment agency, and continuing with its obligations (including administering debt repayment, staff support to the Oversight Board, filing State Controller's reports and associated mandated activities.) If Petaluma does not elect to become the Successor Agency, the administrative funds will be paid to the agency that does accept that role. Additionally, for the Council's information, the loss of redevelopment funding to administrative and personnel costs for the current fiscal Year 2011-2012 will be $891,550. The majority of these expenses will be covered by the administrative payment that is made to the Successor Agency. The funding for current redevelopment programs and all Housing programs could be lost even though the City took steps last year to protect the funding for programs and other assets of the agency. The positions currently allocated, in full or in part to the Redevelopment budget are: • City Manager 50% • Finance Director 30% • Economic Dev. Manager 100% • Housing Administrator 100% • Housing Coordinator 100% • Senior Planner 20% • Proj. Mgr—Green Building 20% • Engineering Manager 5% 3 ATTACHMENTS I. Exhibit#1: Resolution Electing.to Serve as Successor Agency Exhibit#2: Resolution Declining to Serve as Successor Agency 2. Current Enforceable Obligation Payment Schedule(EOPS) s/housing/s"cc essoragencysta((report 4 ATTACHMENT#1 EXHIBIT 1 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PETALUMA ELECTING TO SERVE AS SUCCESSOR AGENCY TO THE PETALUMA COMMUNITY DEVELOPMENT COMMISSION PURSUANT TO HEALTH AND SAFETY CODE SECTION 34177 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 with the City ('Project Area"), pursuant to the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.) (the"CRL"); 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 California Legislature adopted, the Governor signed, and the California Supreme Court, in California Redevelopment Association, et al. v. Ana Matosantos, et al., has upheld ABX 1 26, legislation that amends the CRL; provides that the Commission will be dissolved effective as of February 1, 2012; and empowers a designated "successor agency"to wind down the affairs of the Commission, subject to review and approval by a local Oversight Board and the State of California; and WHEREAS, ABXI 26 designates the city that created a redevelopment agency as the successor agency; and WHEREAS, ABXI 26 further provides that the City may elect not to serve as the successor agency, provided that it files a duly authorized resolution of its governing body to that effect with the county auditor-controller; and WHEREAS, the California Supreme Court has determined that such resolution must be adopted and filed with the county auditor-controller no later than January 13, 2012; and WHEREAS, under ABXI 26, if a city that authorized the creation of a redevelopment agency elects not to serve as a successor agency, the county auditor-controller shall determine the first local agency in the county that elects to become the successor agency, or, if no local agency elects to serve as the successor agency, the Governor shall appoint three county residents to serve as the governing board of a designated local authority serving as a successor agency, until a local agency elects to become the successor agency; and WHEREAS, the City Council of the City of Petaluma believes that it is in the best interest of the community for the City to serve as the successor agency to the Commission pursuant to ABXI 26. 5 NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Petaluma as follows: Section 1. All of the recitals above are true and correct and incorporated herein. Section 2. Based on the foregoing recitals and the information provided to the City Council by City staff, the City Council hereby declares that the City of Petaluma elects to serve as successor agency to the Petaluma Community Development Commission and to assume the responsibilities, rights and powers of a successor agency pursuant to Health and Safety Code Section 34177 and other applicable law. Section 3. The City Manager is hereby authorized to take all action necessary to effectuate this Resolution. Section 4. This Resolution is effective on the day of its adoption. Section 5. 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. • 6 EXHIBIT 2 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PETALUMA DECLINING TO SERVE AS SUCCESSOR AGENCY TO THE PETALUMA COMMUNITY DEVELOPMENT COMMISSION PURSUANT TO HEALTH AND SAFETY CODE SECTION 34173(d)(I) 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 with the City ("Project Area"), pursuant to the California Community Redevelopment Law (Health and Safety Code Section 33000 et.seq.) (the "CRL"); 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 California Legislature adopted, the Governor signed, and the California Supreme Court, in California Redevelopment Association. et al. v. Ana Matosantos, el al., has upheld ABX 1 26, legislation that amends the CRC; provides that the Commission will be dissolved effective as of February 1, 2012; and empowers a designated "successor agency" to wind down the affairs of the Commission, subject to review and approval by a local Oversight Board and the State of California; and WHEREAS, ABXI 26 designates the city that created a redevelopment agency as the successor agency; and WHEREAS. ABXI 26 further provides that the City may elect not to serve as the successor agency, provided that it tiles a duly authorized resolution of its governing body to that effect with the county auditor-controller; and WHEREAS, the California Supreme Court has determined that such resolution must be adopted and filed with the county auditor-controller no later than January 13, 2012; and WHEREAS, under ABXI 26, if city that authorized the creation of a redevelopment agency elects not to serve as a successor agency, the county auditor-controller shall determine the first local agency in the county that elects to become the successor agency, or, if no local agency elects to serve as the successor agency, the Governor shall appoint three county residents to serve as the governing board of a designated local authority serving as a successor agency, until a local agency elects to become the successor agency; and WHEREAS, the City Council of the City of Petaluma does not believe that it is in the best interest of the community for the City to expend the time and resources required to serve as the successor agency pursuant to ABXI 26. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Petaluma as follows: 7 Section 1. All of the recitals above are true and correct and incorporated herein. Section 2. Based on the foregoing recitals and the information provided to the City Council by City staff, the City Council hereby declares that pursuant to Health and Safety Code Section 34173(d)(1), the City of Petaluma elects not to serve as successor agency to the Petaluma Community Development Commission. The City Council so resolves with full recognition that another entity, yet to be determined, will serve as the successor agency to the Commission, and that Commission assets and enforceable obligations will be administered by an entity other than the City of Petaluma. Section 3. The City Manager is hereby authorized to take all action necessary to effectuate this Resolution. Section 4. The City Clerk is hereby directed to transmit a copy of this Resolution to the Sonoma County Auditor-Controller by or before January 13, 2012. Section 5. This Resolution is effective on the day of its adoption. Section 6. 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. 8 ATTACHMENT #2 Name of Redevelopment Agency: Petaluma Community Development Can.Msslon Pagel of t Pages Project Area(s) Central Business District and Petaluma Cornniucly District ENFORCEABLE OBLIGATION PAYMENT SCHEDULE Per AB 26-Section 34167 and 34169(1 Total Outstanding Total Due During Payments by Mona, Project Name/Debt Obligation Payee Description Debi or Oblige/Ion Fiscal Year Aug'- Sept Oct Nov Dec total II 2001A Tax Allocations Bonds U.S.Bank Bonds Issued to tune non-housing projects 3.430,000.00 404,314.00 24657,00 $ '24,657.00 412003A Tax Allocations Bonds U.S.Bank Bonds issued to fund non-housing projects 17,710.475.02 1.505,07200 50500600 $ 505,00600 a 2005A Tar Allocations Bonds U.S.Bank Bonds Issued to fund non-housing projects 25509,20002 104481400 394.907.00 $ 394907.00 II 2007 Tax Allocations Bonds U.S:Bank Bonds issued to fund non-housing projects 51,440,120.18 1.597.012.00 683,506.00 $ 603,506.00 32011-Tax Allocations Bonds U.S.Bank Bonds Issued to fund non-housing projects 14396,633.60 1.194.576.00 27228800 $ 272,268.00 it Logan Place Burbank Housing 2 Loan for affordable housing project 1.700000.00 1,700,00000 1.700.000.00 $ 1.700.000.00 0 Employee Costs Employees of City Payroll and benefits for employees 713,150.00 713,15000 59.42900 59.42900 59,42900 59.429.00 $ 237,716.00 31 Lease payments Discovery Systems Payment for office equipment 1,828.00 1.02800 152.00 15200 15200 15200 $ 60800 31 Lease payments SMART Payment for railroad Meg 12,000.00 12,000.00 1,000.00 1.00000 100000 100000 $ 4,000.00 3)Lease payments Ice House LLC Payment for otfcespace 240000 2,400.00 200.00 200.00 200.00 200.00 $ 800.00 O Contract for services Petaluma Downtown Assn Payment for services 50,000.00 50,000.00 4,166.67. 4,16667 4,16667 4.16667 $ 16.666.68 Old Redwood Hw/Conlracl for 8 design consulting services URS Corp. Design 4.128.260.00 724.288.00 144,857.60 144,85760 144.857.60 144857.60 144857.60 S 724,288.00 p Auto Center Drive Ext./Design URS Corp. Design 29399000 1501080 3,75270 " 3,752.70 .3.752,70 3.752.70 $ 1501080 Auto Center Drive ExilConstrucfon I)Contract FEDCO Construction Construct roadway 952,97000 243899.32 60.974.83 60,974.63 60,97483 60,97483 $ 243.899.32 Ante Center Drive Ext./Employee Employees of Cry of i)Costs Pelalume Payroll for employees' 238.04000 238.04000 5951000 59510.00 .59,51000 59,51000 S 238,04000 Rainier Ave.Cross-Town 31 Connector/Contract for consulting Metropolitan Planning Group Planning 23100.00 23,100.00 462000 4620.00 4,620.00 4,62000 4,62000 $ 23,10000 Rainier Ave.Cross-Town Ii Connector/Canned for consulting URS Corp. Envlronmenlal 056.14900 856,149.00 171.229.80 .171,229.60 171,229.80 17122980 17122980 $ 856,149.00 Petaluma River.Traln Contract for 1) consulting services CSWRluber-Stroeh Design 176,18000 4065162 '8.13152 8,131.52 8,131.52 8,131.52 8131,54 3 40657.62 Petaluma River Trail/Contract for ?I consulting-services.. Geoff Hornsby Right-of-way services 44.50000 9.50500 3,16833 3,16833 3,16833 $ 950499 US 101:East Washington 1l Inlerchange/Consulling Services URS Corp. Design 1,76404400 411,68900 82,337.80 8233180 82,337.80 6233180 82.337,80 $ 411,689.00 US 101 8 East Washington is Interchange/Consulling Services Associated Right of Way Ser Right-of-way services 17690000 19.817 00 396300 3,96300 3,96340 3,963 40 396340 $ 19817.00 US 101&East Washington Sonoma Co.Transportation 91 inlerchange/Crcy matching funds Agency Local Agency matching funds 1,797,144.00 $ - Old Redwood Miry/City matching Sonoma Co.Transportation 3l funds Agency Local Agency matching funds 14,829.000 00 $ - Rainier Ave.Crass-Town Sonoma Co.Transportation Ii Connector/Ctty matching funds Agency Local Agency matching funds 7,498,000.00 498,000.00 29000000 290,00000 • TOlele•:Thle Page 5 147,746,091 82 $ 11,30532134 4 539.377 65 4 604,125 32 6073493 65 2.487.857 55 2.473.256 14 6.71231041 Thiele-Paha2 i 5 - 4 - 5 forals•Page 3 8 - $ - it - $ - - - - Totals.Pa9e4 $ - 9 4 4' - - . •Totals-0ther Obtgadons S 1144.512234 00 5' 5.190052.00 4 5' _ - - 2,59502600 2,595026 00 go:els-All Pagas i4 26225832582 $' 1649537374 4 539.377 65 5 60432032 607.491 55 2.467.957 55 5.009 282 14 9,307.33641 This Enforceable Obligation Payment S hed 1 (BOPS)is to be adopteBbylhe redevelopment agency no later than late August R is valid through 1291111.It Is the ba Is for the Preliminary Draft Recognized Oblig tl P yrieMSchedule IROP51 wlrl h must beprepared by Me dl s I I g Ag y by 990/11 The draft ROES Oust be prepared hythe Successor Agency by 1190911.) If an agency adOpti a continuation dl per ABX1 27 this EOP6 will not be valid and there la no need to prepare a BOPS. Include any/payments to he made after the adoption of the EOP6. 9 • • r • Name.ot Redevelopmanl Agency: PelLUm(COmnunilyoevalopmarrl Commission Page 1 of Pages Project Areais) Central Business Distinct and Petaluma Community Dialed OTHER OBLIGATION.PAYMENT.SCHEDULE Pen AG 26-Section 34167 and 34169(') Total Outstanding Total Due During Payments by m onlh Project Name/Deal Obligation Payee Description Debt or Obligation Elicit Year Aug" Sept Od Nov Dec Total Il Section 33676 Payments General County Payments per former CRL 33676 :8,16362400 29155800 145.77900 $ 145.77900 2)Sedlon 33676 Payments• Cinnabar School Dish Payments per CRL 33676 350.39200 1251400 625700 $ .6257.00 -31 Section 33676 Payments Old Adobe Union School Payments per former CRL 33676 34650400 12.378.00 0,18900 S 6,189.00 4)Section 33676 Payments Pet.Coy Elem.Oat Payments per former CRL 33676 3.025.23200 100,04400 5402200 $ 54.022.00 5)Sevllon 33676 Payments- Waugh School Dist Payments per fernier CRL 33676. 304,892.00 1080900 5.44450 $ 5.444.50 ' 6)Seclion 33676 Payments Pet.Coy Jl.High Dist Payments per former CRL 33676 5,109.07200 105324.00 92,662.00 S 92662.00 71 Section 33676 Payments SoCo.JI.Jr.College Payments per forme CRL'33676 1.543.472.00 55.12400 2756200 $ 27.56200 81 section 33676 Payments Pet.HIQNElem AWJF Payments per former CRC33676 3,256.596.00 116.307.00 58.15350 $ 58.15350 9)Pass Through Agreement County Payments per former CRC 33401 93.357.672.00 3.334,203.00 1667.10150 51667,101.50 107,Pass Through Agreement County-Library Payments per former CRL 33401 6,899.10500 246.399.00 123,19950 $ 123.19950 11)Statutory Payments County-General Payments per CRC336075. 2.97949300 115.259.00 57.62950 $ 57,62950 12)Statutory Payments County-Library Payments per CRL'33607.5 199,49800 7.71700 3,850,80 $ 3,05850 131 Statutory Payments Son.Co.Water Agency Payments per 02E33607.5 80,321 00 3,107.00 1.553.50 $ 1.553,50 14)Statutory Payments Spring Lake Pk-SCWA Payments per CRL 336075 25.91500 100300 501.50 $ .501.50 151 Statutory Payments Zone 2A-Pet.Basin Payments per CRL 33607.5 168,755.00 7,00000 3,500.00 $ 3,500.00 -16)Statutory Payments Marin Sonoma Mosquito Payments per CRL 336075 25,926.00 100300 50150 $ 501.50 171 Statutory Payments Bay Area Air Quality Dist Payments per CRL 33607.5 19,902 00 77000 30500 $ 38500 18)Statutory Payments South So.Res.Cn.Land Payments per CRL 336075 2,406.00 9300 46.50 $ 4650 191 Statutory Payments' Pet.City Elem.Dist' Payments per CRL 336075 1.555.477.00 60,172.00 30,086.00 4 30.08600 20)Statutory Payments Pet City it High School Payments per CRC'336075 1.093,289.00 73,24000 3662000 $ 36,620.00 21)Statutory Payments Soo .Jt.Jr.College Payments per CRC336075 563,107.00 2178100 10.891.50 $ 10,891.50 22)statutory Payments School SorvIce Admin Payments per CRC 33607,5 206,405.00 7,98500 3,99250 $ 3,99250 23)Statutory Payments PelHlgh/EIem AWUF Payments per CRC 336075 1.108.16200 45.963.00 2298150 $ 22981.50 241 Statutory Payments Schools Equalization Aid Payments per CRC 33607.5 33,576.00 1,299.00 64950 $ 64950 25)Statutory Payments Coy of Petaluma j Paym ants per CRL'33607.5 1.758.380.00 68,021.00 34.01050 $ 3401050 26)Statutory Payments Warm Springs Dam Payments per CRL 33607.5 74,90100 2,897.00 1448.50 $ 114050 27)Housing Fund Loan Repayment City lnLleu Housing Fund Repayment for houslnq fund 1.300,000.00 400.000.00 200.00000 $ 20000000 28)Properly Tax Collection Fee Sonoma County Collection Fee fortax Increment 244,429.00 '244,42900 122,21450 $ 122,21450 29)Browns-geld Program City at Petaluma Cooperative Agreement 400,000.00 50000.00 2500000 $ 25,000.00 301 Rental Assistance/Fair Housing Petaluma People Service Cooperative Agreement 204,000.00 204,000,00 102,000.00 $ 102000.00 31)Transitional Housing salvation Army Cooperative Agreement 75,000.00 75.000.00 37.500.00,$ 37,50000 32)Transitional Housing COTS Cooperative Agreement 332,40000 332600.00 166.200.00 $ 16620000 33)Mobile Home Rent Control Sonoma County Cooperative Agreement 15,000.00 15,000.00 7,500.00 $ 7,50000 34)Rehab single family homes Rebuilding Together Cooperative Agreement 250,000.00 . 250000.00 125.00000 $ 125,000.00 35)Ecos.DevJSlte Development City or Petaluma Cooperative Agreement 6.000,000.00 1.000.00000 500,000.00 $ 500,000.00 [Totals-Other Obligations I f.34,512,234.001$ 5,190,052.001$ - I$ • I$ - Is - Is 1,595,026.00 I$2,595,026.00 •This Enforceable Obligation Payment Schedule(COPS)Is to be adopted byte redevelopment agency no later than late August.k la valid through 12/31111.11 Is @e baste for the Prellninary Draft Recognized Obligation Payment Schedule(BOPS),which most be prepared by tha dissolving Agency by 0130111./The draft ROPS must be prepared births Successor Agency by 11130/114 if an agency adopts a continuation ordinance per AO%117,this COPS will not be valid and there Is no need to prepare a ROPS. "include only payments to be made after the adoption or the FOPS. ***All payment amounts are estimates • 1774353.1 10