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HomeMy WebLinkAbout2011-036 AB26 t 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, 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 known as the voluntary alternative redevelopment program and to make certain statutorily-specified payments described in Health and Safety Code Section 341.94 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 26 and AB 27. G. The City has committed to make the remittances under protest and without 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 andvoid and of no fixrther 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. 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. NOW,THEREFORE,the parties hereto do mutually agree as follows: 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 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 year 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. IV. LIABILITY AND INDEMNIFICATION 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. 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. [signatures next page] IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. CITY OF{eATASCADERO By: Wade McKinney, City Manager Attest: Marcia McClure Torgerson, C.M.0 City Clerk Approved as to form: By: � �« Brian A. Pierik, City Attorney COMMUNITY REDEVELOPMENT AGENCY OF ATASCADERO B I& (I �6�w ' y: - h4, Wade McKinney,Executive Dirt ir ctor Attest: Marcia McClure Torgerson, C.M.C., A ncy Secretary Approved as to-form: By: -- Brian A. Pierik, Agency Counsel