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HomeMy WebLinkAbout2011/09/27 Item 12CITY C~~ 1~C1 L REDE~/EL~JPlvtE~fT A~GEI'~JCY AGENE~A STATEF~T ~~,~,~ C1TY OF eHUEA V15TA September 27, 2011, Item ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA APPROVING A CONDITIONAL REMITTANCE AGREEMENT PURSUANT TO ASSEMBLY BILL Xl 27, DIVISION 24, PART 1.9, SECTION 34194.2, WHICH REMITTANCE IS CURRENTLY ESTIMATED AT $4.1 MILLION FOR THE 2011-12 FISCAL YEAR AND $1 MILLION IN SUBSEQUENT YEARS RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA APPROVING AND ADOPTING A PRELIMINARY DRAFT OF AN INITIAL RECOGNIZED OBLIGATION PAYMENT SCHEDULE PURSUANT TO ASSEMBLY BILL X1 26, DIVISION 24, PART 1.8, SECTION 34169(h) OF THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW AND TAKING CERTAIN ACTIONS IN CONN ON THEREWITH SUBMITTED BY: ASSISTANT CITY MANAGE IRECTOR OF DEVELOPMENT SE V CES REVIEWED BY: CITY MANAGER 4/STHS VOTE: YES ~ NO SUMMARY In June 2011, the Governor signed two related redevelopment bills that purported to (1) dissolve redevelopment agencies (AB Xl 26) and (2) provide fora "voluntary" alternative redevelopment program ("VARP"; AB Xl 27). The Supreme Court, based on litigation, stayed those bills, with the exception of Part 1.8 of AB 26. Part 1.8 of AB 26, which was not stayed, specified actions that the redevelopment agencies must undertake, including the adoption of an Enforceable Obligations Payment Schedule ("EOPS") by August 28, 2011 and an Initial Recognized Obligation Payment Schedule ("ROPS") by September 30, 2011. The Redevelopment Agency ("Agency") has already adopted the EOPS, and this action seeks to comply with Part 1.8, specifically section 34169(h}, by adopting the ROPS. The ROPS seek to document the Agency's obligations such as bonds, debt service, storefront renovation programs, streetscape master plans, reimbursement agreements and City administrative costs in supporting the Agency as more specifically stated in the RODS. 1 2-1 September 27, 2011, Item ~ r~ Page 2 of 5 In addition, the City adopted the required ordinance to "opt" into the voluntary alternative redevelopment program ("VARP") in August of 2011. As part of the ordinance, and as permitted by AB Xl 27, the City and Agency may enter into a remittance agreement for the use of Agency funds to make the required state payments to participate in the VARP. Accordingly, staff has prepared a "Conditional Remittance Agreement" to ensure that Agency funds may be used to make the required state payments, thereby ensuring City general funds are not used. The agreement is conditioned upon the Supreme Court's decision on the lawfulness of AB X1 26 and AB X1 27. Staff recommends that the resolutions be approved. ENVIRONMENTAL REVIEW With regard to the ROPS and the Conditional Remittance Agreement, the Director of Development Services has reviewed the proposed activities for compliance with the California Environmental Quality Act (CEQA) and has determined that the activities are not a "Project" as defined under Section 15378 of the State CEQA Guidelines because the proposals consist of the creation of government funding mechanisms that do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. Therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activities are not subject to CEQA. Thus, no environmental review is necessary. RECOMMENDATION Approve the resolutions. BOARDS/COMMISSION RECOMMENDATION On August 2, 2011, Council adopted a first reading of an ordinance authorizing the City of Chula Vista to participate in the Voluntary Alternative Redevelopment Program (AB X1 27) subject to certain conditions and reservations. On August 9, 2011, the Council adopted a second reading of the aforementioned ordinance, with the ordinance being effective 30 days thereafter. On August 23, 2011, Council adopted the Resolution approving the Enforceable Obligation Payment Schedule {"EOPS") and the Resolution naming the City as the Successor Agency. DISCUSSION L AB XI 26 and AB XI 27 History and City/Agency Actions to Date. In July 2011, the governor signed two related redevelopment agency bills that purported to dissolve redevelopment agencies (AB Xl 26) and provide for a "voluntary" alternative redevelopment program ("VARP"} (AB X1 27). Subsequently, the California Redevelopment Agency along with specified cities filed a lawsuit in the California Supreme Court in California Redevelopment Association (CRA) v. Matosantos (5194861) ("CRA Action") to contest the legality of AB Xl 26 and AB Xl 27. On August 2, 2011, the City Council took actions to ensure the continued existence of the Agency. Specifically, Council introduced an ordinance, with a reservation of rights, to 12-2 September 27, 2011, Item ~ .~ Page 3 of 5 participate in the VARP. On August 9, 2011, City Council passed a second reading of the ordinance, with the ordinance being effective 30 days thereafter. On August 11, 2011, the California Supreme Court issued a stay ("Stay") in the CRA Action. The Stay was granted on all provisions of AB X1 27, and on all provisions of AB X1 26, except that the request to stay Division 24, Part 1.8 of the Health and Safety Code (Health & Safety Code, §§ 34161-34167) was denied. In response, counsel for the California Redevelopment Association ("CRA"} communicated to agencies their concern that the wording of the Stay was ambiguous as to AB X1 26. In particular, section 34169 imposed additional obligations on Redevelopment Agencies, including the adoption of the Enforceable Obligation Payment Schedule (EOPS) and the Recognized Obligation Payment Schedule ("ROPS"). On August 17, 2011, the California Supreme Court modified the Stay. First, it clarified that the exception to the Stay of AB X1 26 includes all of Part 1.8, including section 34169. Second, the Court modified the Stay of AB X1 27 to except from it Health & Safety Code, §§34194(b)(2), which provides the procedure for the Director of Finance to determine the remittance amount due the county auditor-controller from those agencies participating in the AB Xl 27 "Voluntary Alternative Redevelopment Program." The effect of the Stay was to preserve the status quo by authorizing redevelopment agencies to perform under "existing obligations" as defined by the statute while preventing agencies from undertaking new debt or making new commitments, among other things, pending the Supreme Court's decision on the merits of petitioners' claims that AB X1 26 and AB X1 27 violate the State Constitution and other laws. The August 17 modifications to the Stay have the effect of reviving portions of the previously stayed statutory scheme that require actions be taken by agencies, cities and the state during the period before January 15, 2012, by which time the Court intends to have rendered its decision. These actions include the adoption of the EOPS under AB X1 26 prior to August 29, 2411, the preparation of a preliminary draft of the initial recognized obligation payment schedule CROPS) by September 30, 2011, and the determination of the remittance payment amount required by agencies opting in to the Voluntary Alternative Redevelopment Program under AB X1 27. On August 23, 2011, Council adopted the Resolution approving the Enforced Obligation Payment Schedule and the Resolution naming the City as the Successor Agency. The proposed actions are a continuation of required actions that the City should take to comply with and preserve the City rights with respect to AB X1 26, AB X1 27, and the Supreme Court's Stay, specifically the approval and adoption of the ROPS and approval of a Conditional Remittance Agreement. II. Recognized Obligation Payment Schedule CROPS). Part 1.8, specifically Health and Safety Code Section 34169(h), requires that the Agency prepare a preliminary draft of an initial ROPS by September 30, 2011. The ROPS is similar to the EOPS, but it permits additional obligations to be added and covers the entire 2011-2012 fiscal year. The types of obligations documented in the RODS include, but are not limited to, bonds, debt service, storefront renovation programs, streetscape master plans, reirrmbur-cement agreements and City administrative costs in supporting the Agency. The ROPS does not_involve 12-3 September 27, 2011, Item ry ~- Page 4 of 5 any increased cost to the City or Agency budgets. The ROPS solely documents existing obligations. Special Counsel for the Agency and the City has opined that the Agency should adopt a resolution approving the ROPS, subject to full reservation of rights under the stay, to preserve all rights to make payments and perform enforceable obligations associated with the Agency's projects until the Supreme Court makes further modifications to the stay or makes its final determination in the underlying litigation action. City staff has prepared such a ROPS and it is attached to this staff report as Attachment 1. Staff recommends that the ROPS be approved and adopted. III. Conditional Remittance Agreement Between the City and the A ency. Prior to the Supreme Court's Stay, AB X1 27 authorized the City to continue redevelopment activities by opting into the VARP. To do so, the City was required to adopt an ordinance indicating it had elected to "opt in" (which the City adopted in August 2011) and to make a payment to the State in an amount determined by the State Department of Finance. Payments would be required to be made to the State for FY 2011-12 and each year thereafter. AB X1 27 (specifically section 34194.2) and the City's "opt in" ordinance authorized the City and Agency to enter into an agreement ("Conditional Remittance Agreement") to permit the Agency to commit its tax increment funds to the City, so the City may use such funds to make the required state payment. In so doing, no general fund monies would be used to make the required state payment. The amount of Agency funds subject to the Conditional Remittance Agreement would not exceed the required state payment for participation in the VARP. In terms of the required state payment for participation in VARP, the State Finance Director has indicated that the required payment for FY 2011-12 would be approximately $4.1 million. For subsequent fiscal years, such payments would be approximately $1 million. The Conditional Remittance Agreement would provide that those amounts be provided to the City by the Agency, so that the City may make the required state payment. Staff has prepared a Conditional Remittance Agreement for Council's consideration and it is attached as Attachment 2. The Conditional Remittance Agreement is conditioned on the City's ability to participate in the VARP following the Supreme Court's decision in the above reference litigation. While AB Xl 27 has been stayed, it is important that the City adopt the proposed Conditional Remittance Agreement to ensure the Agency has the maximum funds available for projects/programs and to make the required VARP state payment should the opportunity and need arise after the Supreme Court's decision. By encumbering, but not appropriating, the funds at this time they can be Listed on the ROPS and SOI and ensure that they are properly documented and preserved for Agency projects/programs and participation in VARP. If the resolution were not passed, then there would be less Agency funds available for projects/programs and to make the required VARP state payment. Staff recommends that the Conditional Remittance Agreement be approved. 12-4 September 27, 2011, Item ~ ~' Page 5 of 5 DECISION MAKER CONFLICT Staff has reviewed the decisions contemplated by this item and have determined that the actions contemplated are not site-specific and, consequently, the 500-foot rule found in California Code of Regulations section 18704.2(a) is not applicable. CURRENT YEAR FISCAL IMPACT With regard to the ROPS, the ROPS identifies all of the Agency's obligations determined to be enforceable obligations under Section 31467(d). The FY 2011-12 budget includes funding to meet the Agency's obligations. With regard to the Conditional Remittance Agreement, the Supreme Court stayed AB X1 27 and AB X1 27's lawfulness is being challenged. The Supreme Court has indicated that it intends to reach a decision by January 15, 2012. Thus, during this fiscal year it is unclear if Agency funds will be required. Should the Supreme Court find that AB 27 is lawful and the City is permitted to enter into VARP then approximately $4.1 million of Agency funds would be used to make the required state remittance payment. ONGOING FISCAL IMPACT The on-going fiscal impact will be identified once the pending litigation has been resolved, although current calculations estimate that the required payment will be approximately $1 million every year. ATTACHMENTS 1. Recognized Obligation Payment Schedule CROPS) and resolution of the Redevelopment Agency of the City of Chula Vista approving the ROPS. 2. Conditional Remittance Agreement and resolution of the City Council of the City of Chula Vista and the Redevelopment Agency of the City of Chula Vista approving the Conditional Remittance Agreement. 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Googins City Attorney Dated: ~~2~~~) CONDITIONAL REMITTANCE AGREEMENT PURSUANT TO CALIFORNIA HEALTH AND SAFETY CODE SECTION 3194.2 BETWEEN THE CITY OF CHULA VISTA, AND THE CHULA VISTA REDEVELOPMENT AGENCY 12-10 Attachment 2 CONDITIONAL REMITTANCE AGREEMENT PURSUANT TO CALIFORNIA HEALTH AND SAFETY CODE SECTION 34194.2 BETWEEN THE CITY OF CHULA VISTA AND THE CHULA VISTA REDEVELOPMENT AGENCY THIS CONDITIONAL REMITTANCE AGREEMENT ("Agreement") is entered into this 27~' day of September 2011, by and between the CITY OF CHULA VISTA, a municipal corporation ("City"} and the CHULA VISTA REDEVELOPMENT AGENCY ("Agency"), with reference to the following facts: A. Assembly Bill No. X1 27 ("AB 27") was passed by the State Legislature on June 15, 2011, and signed by the Governor on June 29, 2011. B. Upon enactment, AB 27 is to be codified as Part 1.9 of the California Health and Safety Code, commencing with Section 34192 ("Part 1.9"). C. AB 27 establishes a voluntary alternative redevelopment program ("VARP") whereby the City may choose to continue redevelopment pursuant to Part 1.9, upon the enactment of an Ordinance by the City to comply with the provisions of Part 1.9 and make certain remittances described in Health and Safety Code Section 34194 to the County Auditor- Controller. D. The City Council of the City of Chula Vista ("City Council"} has adopted an Ordinance to comply with Part 1.9 ("Ordinance"), thereby indicating its election to participate the VARP. E. Pursuant to the Part 1.9 Ordinance, the City Council has committed to comply with and make remittances required by Part 1.9 and authorize the continuation of the Agency after enactment of AB 27. F. Pursuant to Section 34194.1, in making remittances to the County Auditor-Controller pursuant to Section 34194 or 34194.5, the City may use any available funds not otherwise obligated for other uses. G. It is estimated that the required VARP remittance payment to the state for Fiscal Year 2011-12 is approximately $4.1 million, with payments of approximately $1 million each subsequent year. However, the actual amounts may vary. H. Pursuant to Section 34194.2, 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 an amount not to exceed tree anrraal remittance required that year pursuant to Chapter 3 of Part 1.9, 12-11 for the purpose of financing activities within the redevelopment area that are related to accomplishing the redevelopment agency project goals. I. The purpose of this Agreement is to provide for the transfer of funds by the Agency to the City in an amount sufficient for the City to make the remittances required by Part 1.9, with Net Available Tax Increment in this current fiscal year and forthcoming fiscal years. J. The term "Net Available Tax Increment" is defined as any tax increment funds allocated to the Agency, net of existing debt service payments and existing third-parry contractual obligations, not including any funds on deposit in the Agency's Low and Moderate Income Housing Fund, and also not including any portion of tax increment funds to be allocated to the Low and Moderate Income Housing Fund pursuant to Health and Safety Code Section 33334.2, 33334.4 and 33334.6 for the FY 2011-12 year only, to the extent the Agency makes a finding that there are insufficient other moneys to meet its debt and other obligations, current priority program needs or its obligation to transfer funds to the City under Section 34194.2 as provided in this Agreement. K. The obligations of the Agency under this Agreement shall constitute an indebtedness of the Agency for the purpose of carrying out the redevelopment plan for each of the Agency's redevelopment project areas. L. The City and the Agency are aware that the validity, passage, and applicability of the AB 27 and AB X1 26 ("AB 26") is the subject of judicial challenge(s), including the action: California Redevelopment Association, et al v. Ana Matosantos, et al ("CRA Action"). M. The City and Agency are aware that the Supreme Court accepted original jurisdiction of the CR.A Action on August 11, 2011, notified the parties of the briefing schedule, and importantly, issued a stay order affecting Part 1.85 and Part 1.9, but the Court did not stay Sections 34161 to 34167 of Part 1.8, then on August 17, 2011, the Supreme Court modified its stay order, which released the stay on Sections 34167.5 to 34169.5 of Part 1.8 and on Section 34194(b)(2) of Part 1.9, making those laws now effective ("Supreme Court Stay"). N. Given the Supreme Court Stay and potential decision or future action, the City and Agency desire to enter into this Agreement, but that this Agreement shall be conditional, in that it shall be effective only if the decision of the Supreme Court or other order of the Supreme Court permits the City to opt into the VARP and/or permits a payment to the state for participation in the VARP. 12-12 O. This Agreement shall in no way be construed as requiring the Agency or the City to abide by AB 26 and AB 27 (collectively "2011 Redevelopment Legislation") in the event either, or both, bills are found unconstitutional or otherwise legally invalid in whole or in part, nor shall this Agreement effect or give rise to any waiver of rights or remedies the Agency and/or the City may have, whether in law or in equity, to challenge 2011 Redevelopment Legislation.. This Agreement shall not be construed as the Agency's and/or City's willing acceptance of, or concurrence with, the 2011 Redevelopment Legislation, either AB 26 or AB 27; nor does this Agreement evidence any assertion or belief whatsoever on the part of the Agency and/or City the 2011 Redevelopment Legislation is/are constitutional or lawful. NOW, THERE, 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. II. OBLIGATIONS OF THE PARTIES 1. The Agency shall transfer to the City in a timely manner Net Available Tax Increment, or other funds, in an amount sufficient for the City to make the remittance payments required by Part 1.9. The amounts to be transferred to the City shall be sufficient far the City to pay the remittance amount determined by the State Director of Finance pursuant to Part 1.9, subject to the City's right to appeal the amount of remittance to the Director pursuant to Part 1.9. 2. Subject to receipt of sufficient Net Available Tax Increment or other funds from the Agency, the City shall timely remit to the County Auditor-Controller the payments required by Part 1.9 as provided in the Ordinance. The City's obligation to make such remittances shall be a special limited obligation of the City payable solely from Net Available Tax Increment or any other funds made available to the City by the Agency, including but not limited to amounts previously or subsequently pledged to the City for payment of redevelopment expenses that remain unencumbered. Nothing contained in this Agreement shall be deemed to be a pledge of the City's general fund revenues or other assets to make the remittance payments contemplated by Part 1.9, it being understood that the any remittance payments shall be funded solely from Agency funds and/or assets. 3. The obligations of Agency under this Agreement shall be payable out of Net Available Tax Increment, as defined in the above recitals and/or as defined- or provided for in any 12-13 applicable constitutional provision, statue or other provision of law now existing or adopted in the future, levied by or for the benefit of taxing agencies in the Agency's redevelopment project areas, and allocated to the Agency and/or any lawful successor entity of the Agency and/or any entity established by law to carry out the redevelopment plan for the redevelopment project areas and/or expend tax increment or pay indebtedness of the Agency to be repaid with tax increment, pursuant to Health and Safety Code 33670 or any applicable constitutional provision, statue or other provision of law now existing or adopted in the future. In the event that additional funds are required in order to make the Agency payments to the City required by this Agreement, the Agency shall make such payments from income received by the Agency from its projects and programs or any other additional funds available to it. III. 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-state purpose, each party indemnifies, defends and holds harmless to 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. IV. 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. 2. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to the subject matter of this Agreement. 3. 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. 4. Any waiver or amendment of the provisions of this Agreement must be in writing and signed by the authorized representatives of the parties. 12-14 V. SEVERABILITY If any term, provisions, 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. VII. CONDITIONAL AGREEMENT-EFFECTIVENESS This Agreement shall not be effective unless Supreme Court action, whether by decision in the CRA action or other order of the Court, permits the City to opt into the VARP and/or permits a payment to the state for participation in the VARP, and if such conditions are met, then this Agreement shall be effective on the date of the Court's decision or order. (Signature page to follow.) 12-15 SIGNATURE PAGE TO - CONDITIONAL REMITTANCE AGREEMENT PURSUANT TO CALIFORNIA HEALTH AND SAFETY CODE SECTION 34194.2 BETWEEN THE CITY OF CHULA VISTA AND THE CHULA VISTA REDEVELOPMENT AGENCY IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above. For the CITY OF CHULA VISTA: By: James D. Sandoval City Manager Attest: By: Donna Norris City Clerk Approved as to form: By: Glen R. Googins City Attorney For the CHULA VISTA REDEVELOPMENT AGENCY: By: James D. Sandoval Executive Director Attest: By: Donna Norris Secretary Approved as to form: By: Glen R. Googins Agency General Counsel 12-16 RESOLUTION 2011- RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA APPROVING A CONDITIONAL REMITTANCE AGREEMENT PURSUANT TO ASSEMBLY BILL X1 27, DIVISION 24, PART 1.9, SECTION 34194.2, WHICH REMITTANCE IS CURRENTLY ESTIMATED AT $4.1 MILLION FOR THE 2011-12 FISCAL YEAR AND $1 MILLION IN SUBSEQUENT YEARS WHEREAS, Assembly Bill No. X1 27 ("AB 27") was passed by the State Legislature on June 15, 2011, and signed by the Governor on June 29, 2011; and WHEREAS, upon enactment, AB 27 is to be codified as Part 1.9 of the California Health and Safety Code, commencing with Section 34192 ("Part 1.9"); and WHEREAS, AB 27 establishes a voluntary alternative redevelopment program ("VARP") whereby the City may choose to continue redevelopment pursuant to Part 1.9, upon the enactment of an Ordinance by the City to comply with the provisions of Part 1.9 and make certain remittances described in Health and Safety Code Section 34194 to the County Auditor- Controller; and WHEREAS, the City Council of the City of Chula Vista ("City Council") has adopted an Ordinance to comply with Part 1.9 ("Ordinance"), thereby indicating its election to participate the VARP; and WHEREAS, pursuant to the Part 1.9 Ordinance, the City Council has committed to comply with and make remittances required by Part 1.9 and authorize the continuation of the Agency after enactment of AB 27; and WHEREAS, pursuant to Part 1.9, the City would be required to make a remittance payment to the state in Fiscal Year 2011-12 and each year thereafter to participate in the VARP; and WHEREAS, the State Department of Finance is tasked with determining the remittance amount required by Part 1.9 to the State; and WHEREAS, for the 2011-12 Fiscal Year the remittance amount is estimated to be $4.1 million and approximately $1 million in subsequent years; and WHEREAS, pursuant to Section 34194.1, in making remittances to the County Auditor- Controller pursuant to Section 34194 or 34194.5, the City may use any available funds not otherwise obligated for other uses; and 12-17 Resolution No. Page 2 WHEREAS, pursuant to Section 34194.2, 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 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 the redevelopment agency project goals; and WHEREAS, the purpose of this Agreement is to provide for the transfer of funds by the Agency to the City in an amount sufficient for the City to make the remittances required by Part 1.9, with Net Available Tax Increment in this current fiscal year and forthcoming fiscal years; and WHEREAS, the term "Net Available Tax Increment" is defined as any tax increment funds allocated to the Agency, net of existing debt service payments and existing third-party contractual obligations, not including any funds on deposit in the Agency's Low and Moderate Income Housing Fund, and also not including any portion of tax increment funds to be allocated to the Low and Moderate Income Housing Fund pursuant to Health and Safety Code Section 33334.2, 33334.4 and 33334.6 for the FY 2011-12 year only, to the extent the Agency makes a finding that there are insufficient other moneys to meet its debt and other obligations, current priority program needs or its obligation to transfer funds to the City under Section 34194.2 as provided in this Agreement; and WHEREAS, the obligations of the Agency under this Agreement shall constitute an indebtedness of the Agency for the purpose of carrying out the redevelopment plan for each of the Agency's redevelopment project areas; and WHEREAS, the City and the Agency are aware that the validity, passage, and applicability of the AB 27 and AB X1 26 is the subject of judicial challenge(s), including the action: California Redevelopment Association, et al v. Ana Matosantos, et al ("CRA Action"); and WHEREAS, the City and Agency are aware that the Supreme Court accepted original jurisdiction of the CRA Action on August 11, 201 1, notified the parties of the briefing schedule, and importantly, issued a stay order affecting Part 1.85 and Part 1.9, but the Court did not stay Sections 34161 to 34167 of Part 1.8, then on August 17, 2011, the Supreme Court modified its stay order, which released the stay on Sections 34167.5 to 34169.5 of Part 1.8 and on Section 34194(b)(2) of Part 1.9, making those laws now effective ("Supreme Court Stay"); and WHEREAS, given the Supreme Court Stay and potential decision or future action, the City and Agency desire to enter into this Agreement, but that this Agreement shall be conditional, in that it shall be effective only if the decision of the Supreme Court or other order of the Supreme Court permits the City to opt into the VARP and/or permits a payment to the state for participation in the VARP; and 12-18 Resolution No. Page 3 WHEREAS, this Agreement shall in no way be construed as requiring the Agency (or the City) to abide by AB 26X1 and AB 27 (collectively "2011 Redevelopment Legislation") in the event either, or both, bill are found unconstitutional or otherwise legally invalid in whole or in part, nor shall this Agreement effect or give rise to any waiver of rights or remedies the Agency (and/or the City) may have, whether in law or in equity, to challenge 2011 Redevelopment Legislation. This Agreement shall not be construed as the Agency's (and/or City's) willing acceptance of, or concurrence with, the 2011 Redevelopment Legislation, either AB X1 26 or AB 27; nor does this Agreement evidence any assertion or belief whatsoever on the part of the Agency (and/or City) the 2011 Redevelopment Legislation is/are constitutional or lawful. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Chula Vista and the Redevelopment Agency of the City of Chula Vista as follows: Section 1. The foregoing Recitals are incorporated into this Resolution by this reference, and constitute a material part of this Resolution. Section 2. The City hereby approves the attached Conditional Remittance Agreement and directs the City Manager or his designee to execute the aforementioned agreement and to take any and all measures to implement this Resolution and aforementioned Agreement. Section 3. The Agency hereby approves the attached Conditional Remittance Agreement and directs the Executive Director or his designee to execute the aforementioned agreement and to take any and all measures to implement this Resolution and aforementioned Agreement. Section 4. The officers and staff of the City and Agency are hereby authorized directly, jointly and severally, to do any and all things that they may deem necessary or advisable to effectuate this Resolution, and any such actions previously taken by such officers and staff are hereby ratified and confirmed. Section 5. This Resolution shall take effect upon the date of adoption. Presented by Approved as to form by Jim Sandoval Glen R. Googins City Manager City Attorney 12-19 RESOLUTION NO. 2011- RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA APPROVING AND ADOPTING A PRELIMINARY DRAFT OF AN INITIAL RECOGNIZED OBLIGATION PAYMENT SCHEDULE PURSUANT TO ASSEMBLY BILL Xl 26, DIVISION 24, PART 1.8, SECTION 34169(h) OF THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW AND TAKING CERTAIN ACTIONS IN CONNECTION THEREWITH WHEREAS, the Redevelopment Agency of the City of Chula Vista ("Agency") is organized and existing pursuant to the California Community Redevelopment Law (Health and Safety Code § 33000, et seq.; hereinafter, the "CRL") and is responsible for the administration of redevelopment activities within the City of Chula Vista; and WHEREAS, the City Council of the City of Chula Vista ("City") approved and adopted a Redevelopment Plan ("Redevelopment Plan") covering the Merged Bayfront/Town Centre I and Merged Chula Vista project areas ("Project Areas") within the City of Chula Vista; and WHEREAS, since adoption of the Redevelopment Plan, the Agency 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, continued redevelopment of the Project Areas to eliminate blight, improve public facilities and infrastructure, renovate and construct affordable housing, and enter into partnerships with private industries to create jobs and expand the local economy is vital to the health, safety and welfare of the City; and WHEREAS, Parts 1.8, 1.85, and 1.9 of Division 24 of the CRL were added by Assembly Bill X1 26 and Assembly Bill X1 27 (together, "2011 Redevelopment Legislation"), which laws purports to become effective immediately; and WHEREAS, the 2011 Redevelopment Legislation is a part of multiple trailer bills to the FY 2011-2012 California budget bills that were approved by both Houses of the State Legislature on June 15, 2011 and signed by the Governor on June 28, 2011; and WHEREAS, Part 1.8 of the CRL added by the Redevelopment Legislation ("Part 1.8") provides for the restriction of activities and authority of the Agency in the interim period prior to dissolution to certain "enforceable obligations" and to actions required for the general winding up of affairs, preservation of assets, and certain other goals delineated in Part 1.8; and 12-20 Resolution No. Page 3 WHEREAS, Part 1.85 of the CRL added by the 2011 Redevelopment Legislation ("Part 1.85") provides for the statewide dissolution of all redevelopment agencies, including the Agency, as of October 1, 2011, and provides that, thereafter, a successor agency will administer the enforceable obligations of the Agency and otherwise wind up the Agency's affairs, all subject to the review and approval of an oversight committee; and WHEREAS, Park 1.9 of the CRL ("Part 1.9") provides that a redevelopment agency may continue in operation if a city or county that includes a redevelopment agency adopts an ordinance agreeing to comply with and participate in the Voluntary Alternative Redevelopment Program established in Part 1.9 ("Program" or "VARP"); and WHEREAS, the Agency is aware that the validity, passage, and applicability of the 2011 Redevelopment Legislation is the subject of judicial challenge(s), including the action: California Redevelopment Association, et al v. Ana Matosantos, et al ("CRA Action"); and WHEREAS, the Supreme Court accepted original jurisdiction of the CRA Action on August 11, 2011, notified the parties of the briefing schedule, and importantly, issued a stay order affecting Part 1.85 and Part 1.9, but the Court did not stay Sections 34161 to 34167 of Part 1.8, then on August 17, 2011, the Supreme Court modified its stay order, which released the stay on Sections 34167.5 to 34169.5 of Part 1.8 and on Section 34194(b)(2) of Part 1.9, making those laws now effective ("Supreme Court Stay"); and WHEREAS, Section 34169(h) in Part 1.8 (one of the several statutes that is not stayed) mandates that every redevelopment agency prepare a preliminary draft of an initial "Recognized Obligation Payment Schedule" ("ROPS") by September 30, 2011, and to provide it to the "successor agency," if a successor agency is established pursuant to Part 1.85, commencing with section 34170; and WHEREAS, the City is the designated "successor agency" pursuant to Part 1.85, but Part 1.85 was stayed in its entirety pursuant to the Supreme Court stay; and WHEREAS, the dissolution of the Agency would be detrimental to the health, safety and economic well-being of the residents of the City and cause irreparable harm to the community, because, among other reasons, the redevelopment activities and projects made possible, implemented and funded by the Agency are highly significant and of enduring benefit to the community and the City and are critical component of the City's future; and WHEREAS, subject to the Supreme Court Stay, the Program allows a community's redevelopment agency to continue operating, without the constraints of California Health and Safety Code Section 34161, et seq., and in furtherance thereof the City of Chula Vista, by ordinance, has indicated its election to so participate in the Program; and WHEREAS, therefore and notwithstanding any actions planned or already taken with respect to compliance with the Part 1.9, it is necessary that all redevelopment agencies adopt an ROPS in order to ensure that the Agency continues to have authority to fulfill its applicable financial obligations during the effectiveness of the Supreme Court Stay; and 1 2-21 Resolution No. Page 4 WHEREAS, the Agency's ROPS, which is consistent with the requirements of § 34169(h) of the CRL, is attached to this Resolution as Exhibit "A", which documents obligations of the Agency, including. but not limited to items such as, bonds, debt service, storefront renovation programs, streetscape master plans, reimbursement agreements and City administrative costs in supporting the Agency; and WHEREAS, the Agency reserves its right to amend the ROPS as may be necessary to capture all the obligations the Agency may have in the performance of its duties; and WHEREAS, all of the prerequisites with respect to the approval of this Resolution have been met. NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of Chula Vista as follows: Section 1. The foregoing Recitals are incorporated into this Resolution by this reference, and constitute a material part of this Resolution. Section 2. Pursuant to CRL 34169(h), the Agency hereby approves and adopts a preliminary draft its initial Recognized Obligation Payment Schedule ("ROPS") attached hereto as Exhibit A and fully incorporated by this reference. The ROPS is that preliminary draft of an initial "Recognized Obligation Payment Schedule" referred to in CRL Section 34169(h) and shall be interpreted and applied in all respects in accordance with such section and the CRL, to the fullest extent permitted by law; however, the ROPS shall only be applicable to and binding on the Agency to the extent that Part 1.8 is applicable to the Agency. To the extent that Part 1.8 is not applicable, whether because the City's enactment of the Ordinance (that is currently subject to the stay issued in the CRA Action), decision(s) by the Supreme Court in the CRA Action, or for any other reason under the law or by order of a court of competent jurisdiction the ROPS shall not control the Agency's payments on or performance of its obligations. Section 3. The Executive Director and Treasurer of the Agency (and their designees) are hereby authorized and directed to evaluate potential amendments to the ROPS from time to time as may be appropriate and/or as required by the 2011 Redevelopment Legislation whether pursuant to its terms, by court order, or as otherwise required by law and to recommend to the Agency the adoption of those amendments necessary for the continued payment on and performance of its obligations. Section 4. The Executive Director of the Agency is further authorized and directed to cause to be posted the ROPS as required by state law and/or to provide the ROPS to the "successor agency" as required by state law. Section 5. The Agency, pursuant to section 33149(1) in Part 1.8, hereby designates the Redevelopment Administrator of the Redevelopment Agency of the City of Chula Vista as the official whom the Department of Finance may request for review in connection with the 4 12-22 Resolution No. Page 5 ROPS and who shall provide the Department of Finance with the telephon_ e number and e-mail contact information for the purpose of communicating with the Department of Finance. Section 6. The officers and staff of the Agency are hereby authorized and directly, jointly and severally, to do any and all things which they may deem necessary or advisable to effectuate this Resolution, and any such actions previously taken by such officers and staff are hereby ratified and confirmed. Section 7. This Resolution shall in no way be construed as requiring the Agency (or the City) to abide by the 2011 Redevelopment Legislation in the event either, or both, bill are found unconstitutional or otherwise legally invalid in whole or in part, nor shall this Resolution effect or give rise to any waiver of rights or remedies the Agency (and/or the City) may have, whether in law or in equity, to challenge 2011 Redevelopment Legislation. This Resolution shall not be construed as the Agency's (and/or City's) willing acceptance of, or concurrence with, the 2011 Redevelopment Legislation, either AB X1 26 or AB X1 27; nor does this Resolution evidence any assertion or belief whatsoever on the part of the Agency (and/or City) the 2011 Redevelopment Legislation is/are constitutional or lawful. Section 8. This Resolution shall take effect upon the date of adoption. Section 9. The Agency Secretary shall certify to the adoption of this Resolution. Presented by Approved as to form by f Jim Sandoval Glen R. Googins Executive Director Chula Vista City Attorney Redevelopment Agency 5 12-23