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HomeMy Public PortalAbout13. 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