HomeMy Public PortalAbout09. 2012.01.09 Staff Report, CityLIVLIZt01lL
CITY COUNCIL AGENDA REPORT
TO Honorable Mayor and City Council
FROM John Pomldor City Attorney
SUBJECT A Resolution to Express the City of Livermores Intent to Serve as the
Successor Agency for its Redevelopment Agency and to Elect to Retain
the Housing Assets and Functions Previously Performed by the
Redevelopment Agency
RECOMMENDED ACTION
Staff recommends the City Council adopt a resolution expressing the City of Livermores
intent to serve as the successor agency for its Redevelopment Agency pursuant to
Health and Safety Code section 34173 and to elect to retain the housing assets and
functions previously performed by the Redevelopment Agency pursuant to Health and
Safety Code section 34176
SUMMAR
The California Supreme Court recently upheld the Dissolution Act AB1x 26 and
invalidated the Alternative Redevelopment Program Act AB1x 27 As a result by
January 13 2012 a successor agency to the Redevelopment Agency of the City of
Livermore Redevelopment Agency and a successor housing agency need to be
identified as par of the Redevelopment Agency s dissolution
DISCUSSION
Background
On December 29 2011 the California Supreme Court delivered its decision in the
Califcrnia Redevelopment Association v Matosantos case finding ABx1 26 the
Dissclution Act largely constitutional and AB1x27 the Alternative Redevelopment
Program Act unconstitufional The Courts decision means that all California
MEETING DATE AGENDA ITEM
01 092012 602
187
redevelopment agencies including the Redevelopment Agency of the City of Livermore
the RDA will be dissolved under the constitutional Dissolution Act and no
redevelopment agency will have the opportunity to opt into continued existence under the
unconstitutional Alternative Redevelopment Program Act
As a result the RDA will be dissolved on February 1 2012 The RDAs non housing
funds and assets will then be turned over to a successor agency the Successor
Agency charged with winding up the affairs of the former RDA The Successor Agency
will have the responsibility of paying off the former RDAs existing debts by disposing of
the former RDAs properties and assets to help pay off debts and return revenues to the
local government entities that receive property taxes the Taxing Entities The RDAs
affordable housing assets other than its existing housing fund balance will be turned
over to a successor housing agency the Successor Housing Agency to continue
performing affordable housing activities The former RDAs affordable housing fund
balance Mill be used to repay existing housing fund debts andor remitted to the County
Auditor Controller for distribution to the Taxing Entitles
The Dissolution Act provides that the City of Livermore the City as the community that
established the RDA may be the Successor Agency to the former Redevelopment
Agency if the City elects to become the Successor Agency If the City elects not to serve
as the Successor Agency then another taxing entity making a proper election will be
designated as the Successor Agency If the City elects not to be the Successor Agency
it must adopt a resolution to that effect and notify the County Auditor Controller by no
later than January 13 2012 Although not required by the Dissolution Act staff
recommends that the City adopt a resolution that it elects to be the Successor Agency
and deliver notice to the Alameda County Auditor Controller in order to have a clear
record of the Citys intention
The Dissolution Act also authorizes the City to elect to become the Successor Housing
Agency of the former RDA and to retain the housing assets other than any existing
housing fund balance and affordable housing functions of the former RDA If the City
does not elect to become the Successor Housing Agency then our local Housing
Authority will become the Successor Housing Agency
Analysis
The Successor Agency and the Successor Housing Agency will play a key daytoday
role in assuring that the existing obligations of the former RDA are properly paid and that
the former RDAs properties and other assets are disposed of in an appropriate manner
While the Successor Agency will be overseen b an Oversight Board the staff of the
Successor Agency will have a strong role in initiating and implementing actions in a way
that achieves not only the requirements of the Dissolution Act but also is sensitive to the
AB fix 25 requires the fo ination of an U ight So nicn is Intended to supervise the activities of
the Successor Agency II be comps eJ of the fo1uorrj membe s 42o county board of supervisor
members one mayor one county sper to ide cf eicatror one hancellor of t e California Community
Colleges one member rep sorting the a special oic taxing entity and oa 10rmer RDA employee
appointed by the mayor
BE
long term development needs of the City and local community as well as helping to
protect the reputable name of the City in the financial markets by assuring timely
repayment of the former RDAs existing debts
If the City elects not to serve this role the Successor Agency may another taxing
entity within the County with possibly limited experience in redevelopment financial and
land disposition matters and with less regard for the interests of the City and local
community in performing its functions Similarly if the City elects not to serve as the
Successor Housing Agency then an entity outside the Citys control will perform various
affordable housing functions in the City using the affordable housing assets of the former
RDA
The Dissolution Act provides that the liability of the Successor Agency is limited to the
funds and assets it receives uncle the Dissolution Act to perform its functions Thus if
the City takes on the role of Successor Agency or the Successor Housing Agency the
City would not expose its General Fund to liability in discharging the obligations of the
former RDA unless it was found to have mismanaged or misappropriated the funds and
assets it does receive under the Dissolution Act
Subject to the approval of the Oversight Board and to specified reductions if other funds
are available for administration the Dissolution Act permits the Successor Agency to
receive an annual operating budget to defray its administrative costs in an amount up to
five percent 5X of the property tax allocated to the Successor Agency for FY 2011 12
and up to three percent 3 of the property tax allocated to the Successor Agency each
succeeding fiscal year provided however that the annual amount shalt not be less than
250000 for any fiscal year or such lesser amount as agreed to by the Successor
Agency The Dissolution Act does not directly provide for a source to fund the Successor
Housing Agencys administrative costs The City may need to fund its Successor Housing
Agency activities from asset related revenues that the Successor Housing Agency
receives e g affordable housing loan repayments and other program income generated
by the housing assets it inherits from the former Redevelopment Agency or other
revenue sources including the Citys General Fund
FISCAL AND ADMINISTRATIVE IMPACTS
The Dissolution Act permits the Successor Agency to receive an annual operating budget
to defray its administrative costs in an amount up to five percent 5 of the property tax
allocated to the Successor Agency for FY 2011 2 and up to three percent 3 of the
property tax allocated to the Successor Agency each succeeding fiscal year The annual
amount shall not be less than 250000 for any fiscal year or a lesser amount agreed to
by the Successor Agency
ATTACHMENTS
None
Me
Prepared by
Anara Morrison
Special Counsel
Approved bv
John Pbrudor
City Attorney
Fiscal Review by
Doug Alessio Interim
Administrative Services DGector
190
A RESOLUTION TO EXPRESS THE CITY OF LIVERMORES INTENT TO SERVE AS
THE SUCCESSOR AGENCY FOR ITS REDEVELOPMENT AGENCY PURSUANT TO
HEALTH AND SAFETY CODE SECTION 34173 AND TO ELECT TO RETAIN THE
HOUSING ASSETS AND FUNCTIONS PREVIOUSLY PERFORMED BY THE
REDEVELOPMENT AGENCY PURSUANT TO HEALTH AND SAFETY
CODE SECTION 34176
Assembly Bill 1X 26 the Dissolution Act and Assembly Bill 1X 27 the
Alternative Redevelopment Program Act were enacted on June 28 2011 to
significantly modify the Community Redevelopment Law Health Safety Code section
33000 et seq the Redevelopment Law
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 Restnacturing Acts
On December 29 2011 the California Supreme Court ruled that the Dissolution
Act is largely constitutional and the Alternative Redevelopment Program Act is
unconstitutional
The Courts decision means that all California redevelopment agencies will
dissolve on February 1 2012 pursuant to the Dissolution Act
The Dissolution Act provides that the community that authorized the creation of the
redevelopment agency shall be the successor agency to the dissolved redevelopment
agency unless the community elects not to serve as the successor agency under section
3417341 of the Redevelopment Law
Section 34176a of the Redevelopment Law provides that the community that
authorized the creation of a redevelopment agency may elect to retain the housing assets
and functions previously performed by the former redevelopment agency
The City of Livermore the City intends to and shall serve as the successor
agency for the Redevelopment Agenoy of the City of Livermore the Agency in
accordance with sections 34171 j and 34173 of the Redevelopment Law
The City desires to elect to retain the housing assets and functions previously
performed by the Agency in accordance with section 34176 of the Redevelopment Law
NOW THEREFORE BE IT RESOLVED that the City Council of the City of
Livermore hereby accepts the designation and hereby declares its intent to serve as the
successor agency or the Agency in accordance with sections 34171 Q and 34173 of the
Redevelopment Law
RESOLUTION NO
191
BE IT FURTHER RESOLVED that the City hereby elects to retain the housing
assets and functions previously performed by the Agency in accordance with section
34176 of the Redevelopment Law
ATTEST APPROVED AS TO FORM
BE IT FURTHER RESOLVED that the City Manager or the City Managers
designee is hereby directed to file a copy of this resolution with the County Auditor
Controller
ABSTAIN COUNCILMEMBERS
BE IT FURTHER RESOLVED that the City Manager or the City Managers
designee is hereby authorized to take such additional actions and to execute all
documents necessary and appropriate for the City to transfer the assets of the Agency
to the City in its capacity as successor agency to the Agency pursuant to sections
34175 and 34176 of the Redevelopment Law
On motion of COUncImember seconded by
Councilmember the foregoing resolution was passed and
adopted on January 9 2012 by the following vote
AYES COUNCILMEMBERS
NOES COUNCILMEMBERS
ABSENT COUNCILMEMBERS
ABSTAIN COUNCILMEMBERS
ATTEST APPROVED AS TO FORM
Susan Neer gmara Morrison
City Clerk Special Counsel
RESOLUTION NO
192