HomeMy WebLinkAboutResolution 2011-066 RESOLUTION NO. 2011-066
r A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ATASCADERO APPROVING AND AUTHORIZING EXECUTION OF A
REMITTANCE FUNDING AGREEMENT BETWEEN THE CITY OF
ATASCADERO AND THE ATASCADERO COMMUNITY
REDEVELOPMENT AGENCY PURSUANT TO HEALTH AND SAFETY
CODE SECTION 34194.2
WHEREAS, pursuant to the California Community Redevelopment Law (Health and
Safety Code Sections 33000, et seq.) ("CRL"), the City Council ("City Council") of the City of
Atascadero ("City") created the Atascadero Community Redevelopment Agency ("Agency") to
serve as the redevelopment agency within the City; and,
WHEREAS, the Agency is carrying out the Redevelopment Plan(s) ("Redevelopment
Plans)") for the Atascadero Redevelopment Project(s) consisting of certain areas within the City
("Project Area(s)"); and,
WHEREAS, as part of the 2011-12 State budget bill, the California Legislature enacted,
and the Governor signed: (i)ABX I 26, which 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 (ii) ABX I 27, which provides that agencies
do not have to cease activities and do not have to dissolve, if the community creating the
IBM redevelopment agency enacts an ordinance agreeing to comply with the alternative voluntary
redevelopment program described in Section 2 of ABXI 27 adding Part 1.9 (commencing with
section 34192) of Division 24 of the Health and Safety Code (the "Alternative Redevelopment
Program"); and,
WHEREAS, on August 9., 2011, the City Council adopted Urgency Ordinance No. 556
and also held a first reading of regular Ordinance No. 557 with a second reading and adoption on
September 13, 2011, 2011, determining that the City would comply with the Alternative
Redevelopment Program, subject to certain terms and conditions, and has notified the State
Department of Finance, the State Controller and the San Luis Obispo County Auditor-Controller
of such determination; and,
WHEREAS, the Alternative Redevelopment Program requires the City to remit specific
arcual payments to the county auditor-controller ("City Remittance"); and,
WHEREAS, pursuant to Section 34194.2 of the CRL, the City may enter into an
agreement with the Agency, whereby the Agency will transfer a portion of its tax increment to
the City in a particular fiscal year, in an amount not to exceed the amount of the City Remittance
for such fiscal year, for the purpose of financing activities within the Project Area(s) related to
the Agency's goals; and,
bw WHEREAS, a Petition for Writ of Mandate was filed in the Supreme Court of the State
of California on July 18, 2011 Walr'jornia Redevelopment Association, et al. v. dna d4atosanms,
City of Atascadero
Resolution No.2011-066
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et al., Case No. 5194861), challenging the constitutionality of ABXI 26 and ABXI 27 on behalf
of cities, counties and redevelopment agencies and requesting a stay of enforcement; and,
u.
WHEREAS, on August 11, 2011, the Supreme Court issued a partial stay on the
effectiveness of ABXI 26 and ABXI 27 until the Court can rule on the constitutionality of the
two bills, which stay was further modified by the Court on August 17, 2011 (collectively, the
"Stay"); and,
WHEREAS, the Stay is unclear as to what actions an agency or city should be taking
during pendency of the Stay and, therefore, notwithstanding the pending litigation and the Stay,
City adopted Ordinances No.556 and 557 agreeing to comply with the Alternative
Redevelopment Program, subject to certain terms and conditions, and City and Agency wish to
enter into a remittance agreement pursuant to Section 34194.2 of the CRL in order to enable the
City to make the annual City Remittance payments required by ABX] 27 and enable the Agency
to continue its activities necessary to carry out the goals and objectives of the Plan, in the event
ABXI 26 and ABXI 27 are upheld and the Stay is lifted;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ATASCADERO DOES
HEREBY RESOLVE AS FOLLOWS:
1. The City Council hereby approves the Remittance Funding Agreement, substantially in
the form attached hereto as Exhibit A("Agreement'), and hereby authorizes and directs the City
am Manager to execute the Agreement on behalf of the City, subject to such technical or clarifying
revisions as are reasonably determined necessary by the City Manager and approved by the City
Attorney. The City Council hereby further authorizes and directs the City Manager to take all
actions and execute all documents as necessary or appropriate to carry out the Agreement.
2. This resolution shall take effect immediately upon adoption.
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City of Atascadero
Resolution No.2011-066
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PASSED AND ADOPTED by the City Council of the City of Atascadero on the 27`h day
of September 2011,by the following vote:
AYES: Council Members Clay, Fonzi, Sturtevant and Mayor O'Malley
NOES: None
ABSENT: Council Member Kelley
ABSTAIN: None
CfT.Y OF AT CADERO
Tom O'Malle , Mayor
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ATTEST:
Marcia McClure Torgerson, C.M.C., City C k
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AP/P/Ij/QVED TO FORM:
Brian A. Pierik, City Attorney
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City of Atascadero
Resolution No.2011-066
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EXHIBIT A
REMITTANCE AGREEMENT
PURSUANT TO
CALIFORNIA HEALTH AND SAFETY CODE SECTION 34194.2
THIS REMITTANCE AGREEMENT (this "Agreement") is entered into this
27th day of September, 2011, by and between the CITY OF ATASCADERO, a general law city
and municipal corporation (the "City") and the ATASCADERO COMMUNITY
REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), with
reference to the following facts:
A. The Agency is responsible for implementing the Redevelopment Plan(s)
for the Atascadero Redevelopment Project(s) ("Redevelopment Plan(s)") covering certain
properties within the City ("Project Area(s)").
B. Assembly Bill No. xl 26 ("AB 26") and Assembly Bill No. xl 27 ("AB
27") were passed by the State Legislature on June 15, 2011 and signed by the Governor on June
29, 2011.
C. AB 26 requires that each redevelopment agency be dissolved unless,
'y pursuant to AB 27 (to be codified as Part 1.9 of the California Health and Safety Code,
commencing with Section 34192), the community that created it enacts an ordinance committing
it to participate in what is commonly (mown as the voluntary alternative redevelopment program
and to make certain statutorily-specified payments described in Health and Safety Code Section
34194 to the County Auditor-Controller ("Alternative Redevelopment Program" or
"Program').
D. On August 9, 2011, The City Council of the City of Atascadero (the "City
Council") adopted an Urgency Ordinance No. 556 to comply with AB 27 and participate in the
Alternative Redevelopment Program. Also on August 9, 2011, the City held a first reading of a
regular Ordinance No. 557 and the second reading and adoption of the regular Ordinance
occurred on September 13, 2011. These two ordinances (i.e. the Urgency Ordinance and the
regular Ordinance)are collectively referred to herein as the"Ordinance".
E. An action challenging the constitutionality of AB 26 and AB 27 has
been filed on behalf of cities, counties and redevelopment agencies and is being litigated by
the League of California Cities and California Redevelopment Association, and the Supreme
Court of the State of California has stayed, in part, the effect of AB 26 and AB 27.
F. Pursuant to the Ordinance, the City has committed to make the remittances
required by the Alternative Redevelopment Program, to otherwise comply with the Program's
requirements and, in doing so, to authorize the continuation of the Agency after enactment of AB
NOW 26 and AB 27.
City of Atascadero
Resolution No. 2011-066
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G. The City has committed to make the remittances under protest and without
bw prejudice to the City's right to recover such amounts and interest thereon in the event there is a
final determination by the Supreme Court that AB 26 and AB 27 are invalid.
H. Notwithstanding the Supreme Court's order staying the effectiveness
of AB 26 and AB 27, the City and Agency desire to prepare for the Supreme Court's
ultimate determination on the merits of the litigation and to be prepared for continued
operation of the Agency if AB 26 and AB 27 are found to be a valid exercise of the State
Legislature's power.
I. Execution of this Agreement will allow the City and Agency to
continue redevelopment activities immediately upon the Supreme Court's determination on
the merits of the litigation, or upon its lifting of the stay as to AB 26 and AB 27, should
either take place.
J. In the event the Supreme Court issues a final determination that AB 26
and AB 27 are invalid, this Agreement shall be null and void and of no further force or effect, as
the City has already determined that the Ordinance shall be deemed to be null and void and of no
further force or effect in such event.
K. Unless and until AB 26 and AB 27 are invalidated, the City, pursuant to
Section 34194.1, may use any available funds not otherwise obligated for other uses in making
remittances to the County Auditor-Controller pursuant to Section 34194 or 34194.5.
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L. Pursuant to Section 34194.2, the City may enter into an agreement with
the Agency, whereby the Agency will transfer a portion of the taxes allocated to it pursuant to
Health and Safety Code Section 33670 ("Tax Increment") to the City, in an amount not to
exceed the annual remittance required that year pursuant to Chapter 3 of Part 1.9, for the purpose
of financing activities within the redevelopment area that are related to accomplishing Agency
project goals ("City Remittances").
M. The purpose of this Agreement is to provide for the foregoing transfer of
Tax Increment funds, should the Supreme Court uphold the validity of AB 26 and AB 27, in this
current fiscal year and forthcoming fiscal years, in amounts sufficient to pay the annual City
Remittances required by the Alternative Redevelopment Program and to allow the City to
undertake projects, programs and activities related to the Agency's project goals, including the
administrative costs of undertaking those projects, programs, and activities.
N. The obligations of the Agency under this Agreement shall constitute an
indebtedness of the Agency for the purpose of carrying out the Redevelopment Plan(s) for the
Project Area(s).
O. As further stated in the Ordinance, the City reserves the right, whether any
City Remittance has been paid,to challenge the legality of AB 26 and AB 27.
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City of Atascadero
Resolution No.2011-066
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NOW,THEREFORE,the parties hereto do mutually agree as follows:
ow I. INTRODUCTORY PROVISIONS
The recitals above are an integral part of this Agreement and set forth the
intentions of the parties and the premises on which the parties have decided to enter into this
Agreement and said recitals are hereby incorporated into this Agreement.
II. OBLIGATIONS OF THE PARTIES
1. The Agency shall transfer to the City in a timely manner Tax Increment or
any other available funds in an amount sufficient for the City to make the City Remittances
required by the Alternative Redevelopment Program. The amount to be transferred to the City
shall equal the entire amount determined by the State Director of Finance to be the City's
obligation under the Program, subject to the City's right to appeal the amount of remittance to
the Director pursuant to the Program. The City and Agency agree that if Agency does not have
sufficient Tax Increment or other funds available to make the full City Remittance required in
any fiscal year, City shall have no obligation to use City funds for such purpose, in which case
the Agency may be deemed to be dissolved under Health and Safety Code Section 34195.
Notwithstanding the foregoing, Agency shall have no obligation to transfer any monies under
this Section 1 for the duration of the Supreme Court's stay.
2. Subject to the timely receipt from the Agency of Tax Increment or other
funds sufficient to make the annual City Remittances required by the Program, the City shall pay
ow to the San Luis Obispo County Auditor-Controller, no later than January 15 and May 15 of each
year, one-half of the City Remittance amount due for each fiscal yew while this Agreement is in
effect. The City's obligation to make such City Remittance payments shall be a special limited
fund obligation of the City payable solely from Tax Increment or other available funds paid to
the City by the Agency pursuant to this Agreement. Nothing contained in this Agreement shall
be deemed to be a pledge of the City's general fund revenues or any other assets to pay the City
Remittances for any fiscal year. Notwithstanding the foregoing, City shall have no obligation to
transfer any monies under this Section 2 for the duration of the Supreme Court's stay.
III. TERMINATION
This Agreement shall be deemed null and void if AB 26 and AB 27 are determined by a
court of competent jurisdiction to be unconstitutional, illegal, invalid or otherwise unenforceable
or inapplicable, for any reason or in any manner. Notwithstanding the foregoing or any other
provision of this Agreement, either the City or the Agency may terminate this Agreement at any
time, for any reason or no reason, by written notice to the other party.
i.
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IV. LIABILITY AND INDEMNIFICATION
r.
In contemplation of the provisions of California Government Code section 895.2
imposing certain tort liability jointly upon public entities solely by reason of such entities being
parties to an agreement as defined by Government Code section 895, the parties hereto, as
between themselves, pursuant to the authorization contained in Government Code sections 895.4
and 895.6, shall each assume the full liability imposed upon it, or any of its officers, agents or
employees, by law for injury caused by negligent or wrongful acts or omissions occurring in the
performance of this Agreement to the same extent that such liability would be imposed in the
absence of Government Code section 895.2. To achieve the above-stated purpose, each party
indemnifies, defends and holds harmless the other party for any liability, losses, cost or expenses
that may be incurred by such other party solely by reason of Government Code section 895.2.
V. ENTIRE AGREEMENT; WAIVERS; AND AMENDMENTS
1. This Agreement shall be executed in duplicate Originals, each of which is
deemed to be an original. This Agreement constitutes the entire understanding and agreement of
the parties, and supersedes all negotiations or previous agreements between the parties with
respect to the subject matter of this Agreement.
2. This Agreement is intended solely for the benefit of the City and the
Agency. Notwithstanding any reference in this Agreement to persons or entities other than the
City and the Agency, there shall be no third party beneficiaries under this Agreement.
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3. Any waiver or amendment of the provisions of this Agreement must be in
writing and signed by the authorized representatives of the parties.
4. As to the performance of any obligation under this Agreement of which
time is a component, the performance of such obligation within the time specified is of the
essence.
VI. SEVERABILITY
If any term, provision, covenant or condition of this Agreement is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions
shall continue in full force and effect unless the rights and obligations of the parties have been
materially altered or abridged by such invalidation, voiding or unenforceability.
VI. BINDING ON SUCCESSORS
This Agreement shall be binding on and shall inure to the benefit of all successors
and assigns of the parties, whether by agreement or operation of law. This Agreement shall
survive any full or partial merger of the City and the Agency and shall remain in effect and be
fully enforceable according to its terms.
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City of Atascadero
Resolution No. 2011-066
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fN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
CITY OF ATASCADERO
By:
Wade McKinney, City Manager
Attest:
By:
Marcia McClure Torgerson, C.M.C., City Clerk
Approved as to form:
By:
Brian A. Pierik, City Attorney
•.
COMMUNITY REDEVELOPMENT AGENCY OF ATASCADERO
By:
Wade McKinney, Executive Director
Attest:
By:
Marcia McClure Torgerson, C.M.C., Agency Secretary
Approved as to form:
By:
Brian A. Pierik, Agency Counsel
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