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Home My WebLink AboutCC AG PKT 2011-08-02 #BAGENDA STAFF REPORT DATE: August 2, 2011 TO: Honorable Mayor and City Council THRU: Jill R. Ingram, City Manager FROM: Quinn M. Barrow, City Attorney SUBJECT: REDEVELOPMENT AGENCY - RIVERFRONT PROJECT AREA SUMMARY OF REQUEST: It is recommended that the Council introduce Ordinance No. 1612. BACKGROUND AND ANALYSIS: At the regular City Council meeting, of August 8, 2011, the City Attorney's office and the Director of Development Services will present a comprehensive analysis of AB 26 and AB 27 with a recommendation as to whether or not the City should "opt in" to prevent the dissolution of the Seal Beach Redevelopment Agency. In the event City staff recommends preserving the agency, the City Council will be asked to adopt Ordinance No. 1612 at that time. A first reading of Ordinance No. 1612 does not in any way bind the City to adopt the Ordinance. In order to meet the State deadline, City staff is requesting such Council action at this time. If an "opt -in" ordinance is not adopted prior to August 28, 2011, the City must then take certain steps to begin the "opt -out" process. RECOMMENDATION: It is recommended that the Council introduce Ordinance No. 1612. Attachments: A. Draft Ordinance No. 1612 Agenda Item B ORDINANCE NO. 1612 AN ORDINANCE OF THE CITY OF SEAL BEACH TO COMPLY WITH PART 1.9 OF DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE AND TAKING CERTAIN ACTIONS IN CONNECTION THEREWITH RECITALS A. The Redevelopment Agency of the City of Seal Beach (the "Agency ") is a redevelopment agency in the City of Seal Beach (the "City "), created pursuant to the Community Redevelopment Law (Part 1 (commencing with Section 33000) of Division 24 of the California Health and Safety Code) (the "Redevelopment Law "). B. The City Council of the City (the "City Council ") adopted Ordinance No. 708, approving and adopting the redevelopment plan for the Riverfront Project Area, and from time to time, the City Council has amended such redevelopment plan. The Agency is undertaking a program to redevelop the Project Area. C. AB X1 26 was signed by the Governor of California on June 29, 2011, making certain changes to the Redevelopment Law, including adding Part 1.8 (commencing with Section 34161) and Part 1.85 (commencing with Section 34170) to Division 24 of the California Health and Safety Code. Commencing upon the effectiveness of AB X1 26, AB X1 26 suspends most redevelopment agency activities and, among other things, prohibits redevelopment agencies from incurring indebtedness or entering into or modifying contracts. Effective October 1, 2011, AB X1 26 dissolves all existing redevelopment agencies and redevelopment agency components of community development agencies, designates successor agencies to the former redevelopment agencies, and imposes numerous requirements on the successor agencies and subjects successor agency actions to the review of oversight boards established pursuant to the provisions of Part 1.85. D. AB X1 27 was signed by the Governor of California on June 29, 2011, adding Part 1.9 (commencing with Section 34192) to Division 24 of the California Health and Safety Code. Part 1.9 establishes an Alternative Voluntary Redevelopment Program whereby, notwithstanding the provisions of Part 1.8 and Part 1.85, a redevelopment agency will be authorized to continue to exist and carry out the provisions of the Redevelopment Law upon the enactment, prior to the applicable deadline established in Part 1.9, by the city council of the city which includes that redevelopment agency (the "participating city ") of an ordinance to comply with Part 1.9. E. Part 1.9 requires a participating city to make specified annual remittances to the applicable county auditor - controller, who shall allocate the remittances for deposit into a Special District Allocation Fund, for allocation to specified special districts, and into the county Educational Revenue Augmentation Fund, for allocation to educational entities. -I- S7284-000 I \1 3 79176v2. doc Richards, Watson & Gershon F. To participate in the Alternative Voluntary Redevelopment Program, in addition to adopting the ordinance described in Recital D, above, the participating city must, by November 1, 2011, notify the applicable county auditor - controller, the State Controller, and the State of California Department of Finance (the "Department of Finance ") that the participating city agrees to comply with the provisions of Part 1.9. The participating city's agreement to make the remittances provided for under Part 1.9 is a precondition to continue redevelopment pursuant to Part 1.9. G. Part 1.9 provides that for fiscal year 2011 -12, a participating city shall remit to the applicable county auditor - controller an amount equal to the amount determined by the State of California Director of Finance (the "Director of Finance ") for the redevelopment agency pursuant to a formula set forth in Part 1.9, which formula utilizes information contained in the State Controller's redevelopment agency 2008 -09 annual report. The amount represents the redevelopment agency's proportionate share of the sum of $1,700,000,000. The initial amount determined by the Director of Finance is subject to recalculation and reduction in the event the participating city timely files an appeal in accordance with Health and Safety Code Section 34194(b)(2)(L). H. For fiscal year 2012 -13 and each fiscal year thereafter, a participating city's remittance amount shall equal the amount determined pursuant to calculations performed by the participating city in accordance with the requirements of Part 1.9, subject to adjustment based on audit and verification by the Director of Finance, the State Controller and the applicable county auditor - controller. On or before November 1 of each year, commencing November 1, 2012, a participating city shall notify the Department of Finance, the State Controller, and the applicable county auditor - controller of the remittance amount calculated by the participating city. I. Pursuant to the provisions of Part 1.9, a participating city shall pay one - half of the total remittance amount for a fiscal year on or before January 15 of that year and shall pay the remaining one -half of the remittance amount on or before May 15 of that year. J. A participating city making remittances pursuant to Part 1.9 may use any available funds not otherwise obligated for other uses. K. A participating city and the redevelopment agency in that participating city may enter into an agreement pursuant to Part 1.9 whereby the agency will transfer a portion of its tax increment to the participating city in an amount not to exceed the annual remittance required that year pursuant to Part 1.9. L. Pursuant to the provisions of Part 1.9, if a participating city fails to make a remittance payment, as calculated in accordance with the applicable provisions of Part 1.9 and according to the schedule set forth in Recital I, above, the applicable county auditor - controller shall notify the Director of Finance of the failure to make the payment within 30 days. Upon receipt of the notification, the Director of Finance may determine that the redevelopment agency in the participating city shall be subject to the requirements of Part 1.8 and Part 1.85. -2- S7284 -000 i \1379176v2.doc Richards, Watson & Gershon M. On August 1, 2001, the California Director of Finance has indicated that the amount of the City's 2011 -12 remittance is $937,868. The City may appeal the amount of remittance to the Director of Finance on or before August 15, 2011. N. The City desires to participate in the Alternative Voluntary Redevelopment Program so that the Agency may continue to exist and carry out the provisions of the Redevelopment Law. O. The City has, or will have, available funds not otherwise obligated for other uses with which to make the fiscal year 2011 -12 remittance in an amount not to exceed $937,868, or such lesser amount recalculated by the Director of Finance, payable one - half by January 15, 2012, with the remaining one -half payable by May 15, 2012. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SEAL BEACH DOES ORDAIN AS FOLLOWS: Section 1 . The above recitals are true and correct and are a substantive part of this Ordinance. Section 2 . This Ordinance is adopted as required by Health and Safety Code Section 34193. Section 3 . So that the Agency may continue to exist and carry out the provisions of the Redevelopment Law notwithstanding the provisions of Part 1.8 and Part 1.85, the City Council hereby determines and declares that it shall comply with the requirements and obligations contained in Part 1.9, as Part 1.9 exists on the date of adoption of this Ordinance. In adopting this Ordinance or agreeing to comply with the provisions of Part 1.9, the City does not intend to incur an indebtedness or liability within the meaning of any constitutional or statutory debt limitation or restriction. Section 4 . Performance of actions under or pursuant to this Ordinance, including the making of payments by the City to the Orange County Auditor - Controller (the "Auditor - Controller"), is made under protest. Neither the adoption of this Ordinance nor the performance of actions under or pursuant to this Ordinance is intended by the City or Agency to waive any right either may have to challenge the legality of all or any portion of AB X1 26 or AB X1 27 through administrative or judicial proceedings, or to appeal the City's fiscal year 2011 -12 remittance amount pursuant to Health and Safety Code Section 34194(b)(2)(L), or to otherwise contest the remittance amount for any year. Any payments hereunder are intended to be made without prejudice to the City's right to seek to recover reimbursement of such payments, plus interest, should the requirement of making such payments be stayed, enjoined, repealed, or held unconstitutional or unenforceable by any court of competent jurisdiction. This Ordinance shall be null and void and of no further force and effect in the event that AB X1 26 or AB X1 27 is repealed, or held unconstitutional or unenforceable by any court of competent jurisdiction. Section 5 . The City Manager, or the City Manager's designee, is hereby authorized and directed to notify the Auditor - Controller, the State Controller, and the -3- 57284- 0001 \1379176v2.doc Richards, Watson & Gershon Department of Finance, on or before November 1, 2011, that the City agrees to comply with the provisions of Part 1.9, as Part 1.9 exists on the date of adoption of this Ordinance, with such notification to be accompanied by a certified copy of this Ordinance. Section 6 . This Ordinance has been reviewed with respect to applicability of the California Environmental Quality Act ( "CEQA "), the State CEQA Guidelines (California Code of Regulations, Title 14, Sections 15000 et seq., hereafter the "Guidelines "), and the City's environmental guidelines. The City has determined that this Ordinance is not a "project" for purposes of CEQA, as that term is defined by Guidelines Section 15378. Specifically, this Ordinance constitutes the creation of government funding mechanisms or other government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. (Guidelines Section 15378(b)(4).) In addition, this Ordinance is an organizational or administrative activity that will not result in a direct or indirect physical change in the environment. (Guidelines Section 15378(b)(5).) Therefore, because it is not a "project," this Ordinance is not subject to CEQA's requirements. Further, even if this Ordinance were deemed a "project" and therefore subject to CEQA, the Ordinance would be covered by the general rule that CEQA applies only to projects that have the potential to cause a significant effect on the environment. (Guidelines Section 15061 (b)(3).) As an organizational or administrative activity or the creation of government funding mechanisms or other government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment, this Ordinance does not have the potential to cause a significant effect on the environment and is therefore exempt under this general rule. Further, it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, and thus this Ordinance is not subject to CEQA. (Guidelines Section 15061(b)(3).) Section 7 . The City Clerk shall certify to the passage of this Ordinance and is hereby directed to publish or post this Ordinance, or a summary of this Ordinance, in accordance with law. Section 8 . The City Clerk is hereby directed to send a certified copy of this Ordinance to the Agency. Section 9 . The City Clerk is hereby directed to file a Notice of Exemption with the County Clerk pursuant to Section 15062 of the Guidelines within five days of the adoption of this Ordinance. Section 10 . The officers and staff of the City are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable to effectuate this Ordinance and any such actions previously taken by such officers are hereby ratified and confirmed. Section 11 . If any part of this Ordinance is held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, for any reason, such decision shall not affect the validity of the remaining portions of this Ordinance and this City -4- 57284 - 0001\ I379176v2.doc Richards, Watson & Gershon