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HomeMy WebLinkAboutED Housing Fund DepositCITY OF SAN RAFAEL AGENDA ITEM NO.: 3 MEETING DATE: November 21, 2011 San Rafael Redevelopment Agency Agenda Report Department: Redevelopment Prepared by:_ Initials: Stephanie ovette, Acting Economic Development Director Nancy Mackle, Executive Director SUBJECT: RESOLUTION OF THE SAN RAFAEL REDEVELOPMENT AGENCY REDUCING ITS DEPOSIT TO THE LOW AND MODERATE INCOME HOUSING FUND FOR THE 2011-12 FISCAL YEAR AND MAKING CERTAIN FINDINGS AND DETERMINATIONS RECOMMENDATION: Staff recommends that the Agency Board adopt the attached resolution authorizing the reduction of the Agency's deposit into the low and moderate -income housing fund. BACKGROUND AND ANALYSIS: On June 28, 2011, the Governor signed ABx1 26 & 27, budget trailer bills to implement the State Budget for FY 2011-2012. ABxl 26, the Dissolution Act, immediately suspended all new redevelopment activities and incurrence of indebtedness; and dissolved redevelopment agencies effective October 1, 2011. All redevelopment agency functions are to be assumed by a successor agency, expected to be the sponsoring city or county of each redevelopment agency. These provisions of the legislation have not occurred due to a stay issued by the California Supreme Court, in response to a lawsuit by the California Redevelopment Association. ABx1 27 created an Alternative Voluntary Redevelopment Program in which existing Redevelopment Agencies may choose to participate in order to avoid dissolution of the Agency, required under ABx 1 26. In order to opt into the Voluntary Program, a city must adopt an ordinance stating it will comply with the provisions of ABxI 27 and submit annual remittance payments to the County Auditor - Controller. ABx1 27 also allows an agency to suspend its Fiscal Year (FY) 2011-2012 deposit to the Low- and Moderate -Income Housing Fund to pay the first year remittance payment if there are insufficient other monies to meet debt and other existing Agency obligations. ABx1 27 is also subject to the California Supreme Court stay. SRRDA actions in response to ABx1 26 & 27 Participation in I oluntan, Alternative Program On September 6, 2011, the City Council adopted an ordinance opting into the Voluntary Alternative program and acknowledged the use of the Agency's low and moderate income housing fund as the source for the payment. By opting into the Voluntary Alternative Program, the SRRDA is allowed to continue operations and retain existing funds as long as the required annual remittance payments are made. FOR AGENCY SECRETARY ONLY File No.: Agency Meeting: Disposition: Transfer Payment Agreement On September 19, 2011 SRRDA and the City entered into an Agency Transfer Payment Agreement ("TPA"). The TPA provides that the City of San Rafael will discharge the SRRDA fiscal obligations until such time the SRRDA or a successor agency can legally assume the SRRDA obligations. The Agency is obligated to provide funding to the City of San Rafael for these obligations pursuant to the terms of the TPA. ABxI 27 allowed an Agency to suspend its Fiscal Year (FY) 2011-2012 deposit to the Low- and Moderate -Income Housing Fund to pay the first year remittance payment if there are insufficient other redevelopment monies to meet debt and other obligations. The San Rafael TPA stipulates the SRRDA will utilize a portion of the 2011-12 housing funds since these funds are the only currently available or legally allowable funds for the remittance payment. The Fiscal Agreement with the County and Schools limits the Agency's annual tax increment to the payment on the outstanding bonds. The Agency's capital improvement funds are from previous SRRDA bonds and these funds can only be used for capital improvements in the Project Area. Federal Tax Law would not allow these funds to be expended on payments to the local schools and special districts as required by ABx1 27. The TPA was binding as of the date of approval by the City Council, but the operation of its terms is conditioned upon the lifting of the Stay and the Court's determination that the Voluntary Program Act is constitutional. Enforceable Obligation Payment Schedule ("EOPS') AB lx 26 also required City Council's to adopt and publish an enforceable obligation payment schedule ("EOPS") for their redevelopment agencies. The SRRDA FOPS showed a total of $2.1 million of projects and obligations for housing and non -housing programs and projects due in 2011-12. The EOPS included the SRRDA 2011-12 adopted budget of $800,000. The budget figure includes Agency staff costs and Agency support for staff in other City Departments that provide services to the Agency and the Redevelopment Project Area. The FOPS provided further evidence that there are insufficient other moneys to meet the SRRDA debt and other obligations, priority needs and its obligations without reducing the housing fund deposit. California Redevelopment AQencv Lawsuit On August 11, 2011 the California Supreme 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 (the "Stay"), including a stay of provisions of the Voluntary Alternative Program Act. The City enacted the Continuation Ordinance prior to consideration of this Resolution, conditioned upon the lifting of the Stay and the Court's determination that the Voluntary Alternative Program Act is constitutional. The California Supreme Court heard arguments on the case on November 10, 2011 and has committed to issuing a ruling in January, ahead of the first required remittance date. Page 2 of 3 FISCAL IMPACT: The Agency's 2011-12 (first year) remittance payment is $299,490. The SRRDA remittance is one of the smallest in the State because the County and the school districts within the Redevelopment Project Area already receive the majority of the Agency's tax increment pursuant to the 1984 Fiscal Agreement. The Agency does not have any other source of legally available revenues for the payment. The Agency receives approximately $900,000 annually in housing revenue. These housing funds are allocated between bond debt service for previous housing expenditures, specific housing programs, and staff costs for housing related technical assistance and reporting. The payment to the State will reduce Agency funds available for affordable housing programs in this fiscal year. Agency cost in subsequent years is anticipated to be $70,000 annually. Staff will be working with the parties to the Fiscal Agreement to fund this $70,000 from tax increment from the Project Area in the same manner as the previous payments to the Educational Revenue Augmentation Fund ("ERAF"). • Adopt the Resolution authorizing using $299,490 from the 2011-12 housing fund to make the payment to the State. • Direct staff to alter the proposed Resolution to reflect the desires of the Agency members. • Reject the Resolution. ACTION REQUIRED: To continue operation of the SRRDA, staff recommends the Agency Board adopt the attached resolution, approving utilizing a portion of the Agency's affordable housing funds for the payment to the State and authorize the City Manager or her designee to take all actions necessary to effect the Resolution. Page 3 of 3 RESOLUTION NO. 2011-13 RESOLUTION OF THE SAN RAFAEL REDEVELOPMENT AGENCY REDUCING ITS DEPOSIT TO THE LOW AND MODERATE INCOME HOUSING FUND FOR THE 2011-12 FISCAL YEAR AND MAKING CERTAIN FINDINGS AND DETERMINATIONS MOVED BY: MEMBER CONNOLLY SECONDED BY: MEMBER BROCKBANK WHEREAS, pursuant to the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.; the "Redevelopment Law"), the City Council (the "City Council") of the City of San Rafael (the "City") adopted Ordinance No. 1055, on May 1, 1972, declaring the need for the San Rafael Redevelopment Agency (the "Agency") to function in the City; and WHEREAS, pursuant to the Redevelopment Law, the City Council adopted the Redevelopment Plan for the Central San Rafael Redevelopment Project Area by Ordinance No. 1079, adopted on November 20, 1972, as amended by Ordinance No. 1534, adopted on January 5, 1987, as amended and restated by Ordinance No. 1572, adopted on October 16, 1989, as further amended by Ordinance No. 1669, adopted on November 21, 1994, as further amended and restated by Ordinance No. 1732, adopted on October 5, 1998, as amended by Ordinance No. 1776, adopted on March 4, 2002, as amended by Ordinance No. 1786, adopted on August 19, 2002, as amended by Ordinance No. 1822, adopted on March 15, 2004, as amended by Ordinance No. 1850, adopted on June 4, 2007 and as further amended by Ordinance No. 1852 adopted on June 18, 2007 (the "Redevelopment Plan"); and WHEREAS, the Agency is responsible for implementing the Redevelopment Plans pursuant to the Redevelopment Law; and WHEREAS, as part of the 2011-12 State budget bill, ABX1 26 (the "Dissolution Act") and ABXI 27 (the "Voluntary Program Act"; collectively, the "Redevelopment Restructuring Acts") have been enacted to significantly modify the Redevelopment Law 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 Redevelopment Law ("Part 1.9"), establishes a voluntary alternative redevelopment program whereby the Agency is authorized to continue to exist upon the enactment of an ordinance by the City to comply with Voluntary Program Act, including payment of an annual remittance to the County Auditor -Controller ( "Opt -In Ordinance"), and 1 , 141 ,01, 1 o22937,1 ORIII f j 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 (the "Stay"), including a stay of the provisions of the Voluntary Program Act; and WHEREAS, the City has enacted the Opt -In Ordinance prior to consideration of this Resolution, conditioned upon the lifting of the Stay and the Court's determination that the Voluntary Program Act is constitutional; and WHEREAS, Part 1.9 authorizes the Agency to enter into an agreement with the City whereby the Agency agrees to transfer a portion of its Tax Increment to the City in an amount not to exceed the amount of the City's annual remittance to the County Auditor -Controller ("Agency Transfer Payment Agreement"); and WHEREAS, the Agency and the City entered into an Agency Transfer Payment Agreement on September 19, 2011, which provides that the Agency Transfer Payment Agreement is immediately binding upon the parties, but the operation of its terms will be conditioned upon the lifting of the Stay and the Court's determination that the Voluntary Program Act is constitutional; and WHEREAS, pursuant to Part 1.9, the State Director of Finance has notified the City that the City's remittance amount for the 2011-12 fiscal year is Two Hundred Ninety -Nine Thousand Four Hundred Ninety Dollars ($299,490) (the "Remittance Amount"), one-half of which is due on January 15, 2012 and one-half of which is due on May 15, 2012; and WHEREAS, pursuant to Section 33670 of the Redevelopment Law, the Agency is to deposit a specified percentage of the taxes allocated to the Agency (the "Tax Increment") into its Low and Moderate Income Housing Fund (the "Housing Fund") for use to increase, improve and preserve the community's supply of low and moderate income housing; and WHEREAS, Section 34194.3 of the Redevelopment Law exempts the Agency from making the full amount of the required deposit into the Housing Fund for the 2011-12 fiscal year, if the City complies with the provisions of Part 1.9, and if the Agency finds that there are insufficient other moneys to meet its debt and other obligations, current priority needs, or its obligations under the Agency Transfer Payment Agreement; and WHEREAS the Agency has agreed to provide the City funds in an amount not to exceed the Remittance Amount pursuant to the Agency Transfer Payment Agreement; and WHEREAS, the staff report presented with this Resolution (the "Staff Report") sets forth the Agency's available fund balances; the anticipated available 2011-12 Tax Increment to the Agency; and the Agency's debt and other obligations, its current priority program needs, and its obligations under the Agency Transfer Payment Agreement to be paid from such fund balances and 2011-12 Tax Increment, demonstrating that there are insufficient other moneys to meet the Agency's debt 2 141 01 .1022937 1 and other obligations, current priority needs and its obligations under the Agency Transfer Payment Agreement without reducing its Housing Fund deposit by Two Hundred Ninety Nine Thousand and Four Hundred and Ninety Dollars ($299,490) ("Housing Fund Reduction Amount"); and WHEREAS, the Agency has reviewed and duly considered the Staff Report, documents, and other written evidence presented at the meeting. NOW, THEREFORE, BE IT RESOLVED, that the Agency Board finds that the above Recitals are true and correct and have served, together with the supporting documents, as the basis for the findings and approvals set forth below. BE IT FURTHER RESOLVED, based upon substantial evidence, the Agency hereby finds that there are insufficient other moneys to meet the Agency's debt and other obligations, current priority needs, and its obligations under the Agency Transfer Payment Agreement without reducing its Housing Fund deposit by the Housing Fund Reduction Amount. BE IT FURTHER RESOLVED, the Agency hereby finds and determines that it is necessary to reduce its Housing Fund deposit by the Housing Fund Reduction Amount for the 2011-12 fiscal year to meet its debt and other obligations, its current priority program needs, and its obligations under the Agency Transfer Payment Agreement. BE IT FURTHER RESOLVED, the Agency hereby authorizes the Agency Executive Director, or designee, to take such actions as are necessary and appropriate to carry out and implement the reduction of the Agency Housing Fund deposit by the Housing Fund Reduction Amount for the 2011-12 fiscal year. BE IT FURTHER RESOLVED, the Agency hereby amends its 2011-2012 budget to reduce the deposit into the Housing Fund by the Housing Fund Reduction Amount. BE IT FURTHER RESOLVED, that if the Court has not determined whether the Voluntary Program Act is constitutional by the date when the Agency would otherwise be required to deposit Tax Increment into the Housing Fund, the City Finance Director is hereby directed to establish an account into which the Housing Fund Reduction Amount can be deposited pending the decision of the Court. BE IT FURTHER RESOLVED, that this Resolution shall take immediate effect, but its operation will be conditioned upon the lifting of the Stay and the Court's determination that the Voluntary Program Act is constitutional. v 141 oF11022937 1 1, ESTHER C. BEIRNE, Agency Secretary of the San Rafael Redevelopment Agency, hereby certify that the foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the San Rafael Redevelopment Agency of said City on Monday, the 21" day of November, 2011, by the following vote, to wit: AYES: MEMBERS: Brockbank, Connolly, Heller, Levine & Chairman Boro NOES: None •I z Esther C. Beirne, Agency Secretary 141 01 102293 1 CITY OF SAN RAFAEL ROUTING SLIP / APPROVAL FORM INSTRUCTIONS: USE THIS FORM WITH EACH SUBMITTAL OF A CONTRACT, AGREEMENT, ORDINANCE OR RESOLUTION BEFORE APPROVAL BY COUNCIL / AGENCY. -1 SRRA / SRCC AGENDA ITEM NO. > DATE OF MEETING: 11/21/2011 FROM: Stephanie Lovette DEPARTMENT: Economic Development DATE: 11/15/2011 TITLE OF DOCUMENT: RESOLUTION OF THE SAN RAFAEL REDEVELOPMENT AGENCY REDUCING ITS DEPOSIT TO THE LOW AND MODERATE INCOME HOUSING FUND FOR THE 2011-12 FISCAL YEAR AND MAKING CERTAIN FINDINGS AND DETERMINATIONS j Dep meat &H(signature) (LOWER HALF OF FORM FOR APPROVALS ONLY) APPROVED AS COUNCIL / AGENCY AGENDA ITEM: City tanager (signature) REMARKS: Goldfarb prepared the resolution APPROVED AS TO FORM: City Attorney (signature)