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HomeMy WebLinkAbout09. Redevelopment AB 1X 26 AGENDA MEMO DATE: September 13, 2011 TO: Mayor and Members of the City Council FROM: Office of the City Manager By: Brian Saeki, Director of Community Development SUBJECT: ADOPT AN ORDINANCE TO ELECT AND IMPLEMENT PARTICIPATION BY THE CITY OF DOWNEY AND THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF DOWNEY IN THE VOLUNTARY ALTERNATIVE REDEVELOPEMNT 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 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF DOWNEY. RECOMMENDATION That the City Council: ADOPT AN ORDINANCE TO ELECT AND IMPLEMENT PARTICIPATION BY THE CITY OF DOWNEY AND THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF DOWNEY IN THE VOLUNTARY ALTERNATIVE REDEVELOPEMNT 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 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF DOWNEY. BACKGROUND On August 23, 2011, the City Council and Community Development Commission introduced an ordinance that would allow the Commission to continue operating in light of the provisions in Assembly Bill 1X 26 (“AB 1x 26”) and Assembly Bill 1X 27 (“AB 1X 27”). AB 1X 26 will eliminate all redevelopment agencies effective November 1, 2011. AB 1X 27 provides cities with the opportunity to participate in a voluntary alternative redevelopment program that would allow for redevelopment agencies to continue to exist. In order to participate in this program, cities are required to pay the State of California a one time cost based upon a calculation of current indebtedness and gross tax increment received annually. For the City of Downey, that amount is $1,281,573 and will be owed in early 2012. In addition, the Commission would also be required to pay approximately $300,000 to the State annually for the life of the redevelopment project areas. Staff is recommending that the City Council and Community Development Commission adopt the aforementioned ordinance. CITY OF DOWNEY, CALIFORNIA Mayor and Members of the City Council Adoption of An Ordinance Complying with AB 1X 27 September 13, 2011 Page 2 FISCAL IMPACT There is no impact to the General Fund as part of this action. The $1,281,573 payment will be made with undesignated redevelopment funds. No payment would be made as long as the California Supreme Court’s stay is in place or if either or both AB 1X 26 and AB 1X 27 are held invalid. If AB 1X 26 and/or AB 1X 27 are ruled invalid, the urgency ordinance and regular ordinance would be null and void and the Commission would be able to operate as it was operating prior to June 28, 2011. Attachment: Ordinance ORDINANCE NO. 11- AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DOWNEY, CALIFORNIA, TO ELECT AND IMPLEMENT PARTICIPATION BY THE CITY OF DOWNEY AND THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF DOWNEY IN 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 COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF DOWNEY WHEREAS, the City Council of the City of Downey (“City”) approved and adopted the Downey Redevelopment Project Area and the Woodruff Industrial Redevelopment Project Area (the “Project Areas”), as stated and referenced in the Redevelopment Plans for the Downey Redevelopment Project Area and the Woodruff Industrial Project Area (the “Redevelopment Plans”); and WHEREAS, the Community Development Commission of the City of Downey (“Commission”) is engaged in activities to execute and implement the Redevelopment Plans pursuant to the provisions of the California Community Redevelopment Law (Health and Safety Code § 33000, et seq.) (“CRL”); and WHEREAS, since adoption of the Redevelopment Plans, the Commission has undertaken redevelopment projects in the Project Areas to eliminate blight, to improve public facilities and infrastructure, to renovate and construct affordable housing, and to enter into partnerships with private industries to create jobs and expand the local economy; and WHEREAS, over the next few years, the Commission hopes to implement a variety of redevelopment projects and programs to continue to eliminate and prevent blight, stimulate and expand the Project Area’s economic growth, create and develop local job opportunities and alleviate deficiencies in public infrastructure, to name a few; and WHEREAS, as part of the 2011-12 State budget bill, the California Legislature has recently enacted and the Governor has signed, companion bills AB 1X 26 and AB 1X 27, requiring that each redevelopment agency be dissolved unless the community that created it enacts an ordinance committing it to making certain payments; and WHEREAS, specifically, AB 1X 26 prohibits agencies from taking numerous actions, effective immediately and purportedly retroactively, and additionally provides that agencies are deemed to be dissolved as of October 1, 2011; and WHEREAS, AB 1X 27 provides that a community may participate in an “Alternative Voluntary Redevelopment Program,” in order to enable a redevelopment agency within that community to remain in existence and carry out the provisions of the CRL, by enacting an ordinance agreeing to comply with Part 1.9 of Division 24 of the Health and Safety Code; and WHEREAS, the Alternative Voluntary Redevelopment Program requires that the community agree by ordinance to remit specified annual amounts to the county auditor- controller; and ORDINANCE NO. 11- PAGE TWO WHEREAS, under the threat of dissolution pursuant to AB 1X 26, and upon the contingencies and reservations set forth herein, the City shall make the Fiscal Year 2011-2012 community remittance, currently estimated to be One Million Two Hundred Eighty One Thousand Five Hundred Seventy Three Dollars ($1,281,573), as well as the subsequent annual community remittances as set forth in the CRL; and WHEREAS, the City reserves the right to appeal the California Director of Finance’s determination of the Fiscal Year 2011-12 community remittance, as provided in Health and Safety Code Section 34194; and WHEREAS, City understands and believes that an action challenging the constitutionality of AB 1X 26 and AB 1X 27 has been filed on behalf of cities, counties and redevelopment agencies; and WHEREAS, while the City currently intends to make these community remittances, they shall be made under protest and without prejudice to the City’s right to recover such amounts and interest thereon, to the extent there is a final determination that AB 1X 26 and AB 1X 27 are unconstitutional; and WHEREAS, the City reserves the right, regardless of any community remittance made pursuant to this Ordinance, to challenge the legality of AB 1X 26 and AB 1X 27; and WHEREAS, on August 11, 2011, the California Supreme Court issued a partial stay on the AB 1X 26 and AB 1X 27, and therefore the City shall not be obligated to make any community remittance for the duration of such stay; and WHEREAS , all other legal prerequisites to the adoption of this Ordinance have occurred. THE CITY COUNCIL OF THE CITY OF DOWNEY, 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 Alternative Voluntary Redevelopment Program. In accordance with Health and Safety Code Section 34193, and based on the Recitals set forth above, the City Council hereby determines that the City shall comply with the provisions of Part 1.9 of Division 24 of the Health and Safety Code, as enacted by AB 1X 27. Section 3.Payment Under Protest. Except as set forth in Section 4, below, the City Council hereby determines that the City shall make the community remittances set forth in Health and Safety Code section 34194 et seq. Section 4.Effect of Stay or Determination of Invalidity. On August 11, 2011, the California Supreme Court issued a partial stay on the State’s enforcement of AB 1X 26 and AB 1X 27. Therefore, the City shall not make any community remittance payments unless and until the stay is lifted or the California Supreme Court determines AB 1X 26 and AB 1X 27 to ORDINANCE NO. 11- PAGE THREE be valid. Any community remittance 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 that AB 1X 26 and AB 1X 27 are unconstitutional. If there is a final determination that either or both AB 1X 26 and AB 1X 27 are invalid, this Ordinance shall be deemed to be null and void and of no further force or effect. Section 5.Implementation. The City Council hereby authorizes and directs the City Manager to take any action and execute any documents necessary to implement this Ordinance, including but not limited to notifying the Los Angeles County Auditor-Controller, the Controller of the State of California, and the California Department of Finance of the adoption of this Ordinance and the City’s agreement to comply with the provisions of Part 1.9 of Division 24 of the Health and Safety Code, as set forth in AB 1X 27. Section 6.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, whereby the Commission will transfer annual portions of its tax increment to the City in amounts not to exceed the annual community remittance payments to enable the City, directly or indirectly, to make the annual remittance payments. The City Council does not intend, by enactment of this Ordinance, to pledge any of its general fund revenues or assets to make the remittance payments. Section 7.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 Los Angeles in accordance with CEQA Guidelines. Section 8.Custodian of Records. The documents and materials that constitute the record of proceedings on which these findings are based are located at the City Clerk’s office located at City Hall, 11111 Brookshire Avenue, Downey, CA 90241. The custodian for these records is City Clerk. Section 9.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 application, and to this end the provisions of this 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 10.Certification; Publication. The City Clerk shall certify to the adoption of this Ordinance and cause it, or a summary of it, to be published once within 15 days of adoption in a newspaper of general circulation printed and published within the City of Downey, and shall post a certified copy of this Ordinance, including the vote for and against the same, in the Office of the City Clerk in accordance with Government Code Section 36933. ORDINANCE NO. 11- PAGE FOUR Section 11.Effective Date. This Ordinance shall become effective thirty (30) days from its adoption. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council on the ______ day of August, 2011, by the following vote: ___________________________________ Luis H. Marquez, Mayor ATTEST: _______________________________ Joyce E. Doyle, Interim City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss: CITY OF DOWNEY ) I HEREBY CERTIFY that the foregoing Ordinance No. 11- was introduced at a regular meeting of the City Council of the City of Downey held on the _____ day of August, 2011, and adopted at a regular meeting of the City Council of the City of Downey held on the _____ day of August, 2011, by the following vote, to wit: AYES: Council Members: NOES: Council Member: ABSENT: Council Member: ABSTAIN: Council Member: