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HomeMy WebLinkAbout2009/06/23 Item 10 CITY COUNCIL & REDEVELOPMENT AGENCY AGENDA STATEMENT ~I ~!f? CIlYOF ~~ (HULA VISTA JUNE 23, 2009 Item~ ITEM TITLE: RESOLUTION OF THE REDEVELOPi.VlENT AGENCY OF THE CITY OF CHULA VISTA AUTHORIZING AN APPROPRIATION FOR REPAYMENT FROM THE MERGED PROJECT FUND TO THE GENERAL FUND FOR ADVANCES IN AN AMOUNT ESTIMATED AT $900,000 BUT WILL BE BASED ON A V AILABLE FUND BALANCE AT FISCAL YEAR END (4/5THS REQUIRED) DffiECTOROFF~~CVTREASU~ CITY MANAGER ASSISTANT CITY NAGER "') -;-- SUBlVllTTED BY: REVIEWED BY: 4/5THS VOTE: YES 0 NO D SUMMARY The RDA is requesting an appropriation in order to repay the General Fund for advances the RDA has received in the past. Since the Redevelopment Agency's inception, the General Fund has advanced $30.8 million to the Redevelopment Agency as of the June 30, 2008 audited financial statements. The RDA has been unable to repay the General Fund in the past due to fund balance deficits. The actual amount of the repayment will be determined as part of the fiscal year end close to ensure that the RDA doesn't fall into a deficit. ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that approving the loan repayment is not a "Project" as defined under Section 15378 of the State CEQA Guidelines because it will not result in a physical change to the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the actions proposed are not subject to CEQA. RECOMlVIENDA nON The Agency approves the resolution. BOARDS/COMMISSION RECOMMENDATION Not Applicable 10-1 JUNE 23, 3009, Item~ Page 2 of2 DISCUSSION Since the Redevelopment Agency's inception, the General Fund has advanced $30.8 million to the Redevelopment Agency as of the June 30, 2008 audited financial statements. The RDA has been unable to repay the General Fund in the past due to fund balance deficits. At this time it is anticipated that the RDA will be able to repay between $900,000 to $1.1 million at the end of the current fiscal year. The actual amount of the repayment will be determined as part of the fiscal year end close to ensure that the RDA doesn't fall into a deficit. The repayments are possible because tax increment revenues have grown steadily since the addition of the new project area. In the current fiscal year total tax increment revenues are projected at $14.5 million compared to the prior year amount of S 13.8 million. In addition, the RDA has had significant budgetary savings due primarily to vacancies or position cuts in the current fiscal year. DECISION MAKER CONFLICT Staff has reviewed the property holdings of the City Council and has found a conflict exists, in that Agency Members McCann and Ramirez have property holdings within 500 feet of the boundaries of the property, which is the subject of this action. As a result, we have requested an opinion from the Fair Political Practices Commission (FPPC) regarding this conflict. CURRENT YEAR FISCAL IMP ACT The City's General Fund ended the fiscal year 2007/08 with an available balance of $9.3 million or 6.1 percent of the operating budget. For fiscal year 2008/09, due to the signiticant slow down in the economy and the continued housing crisis as well as the credit crisis, several major revenues are being adjusted downward by a total of $4.9 million. Offsetting the revenue shortfalls are anticipated savings of approximately $2.7 million with additional offsets that include a loan repayment of approximately $900,000, reduced funding to the workers compensation and equipment replacement funds totaling $1.3 million. The appropriations requested have been already accounted for in the third quarter projections and therefore no additional impacts to the General Fund reserves are anticipated. ONGOING FISCAL IMPACT There are no ongoing impacts as a result of this action. ATTACHMENTS None Prepared by: Phillip Davis. Assistant Director, Finance 10-2 RESOLUTION NO. 2009- RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA AUTHORIZING At'\! APPROPRIATION FOR REPAYMENT FROM THE MERGED PROJECT FUND TO THE GENERAL FUND OF ADVANCES IN AN AMOUNT ESTIMA TED AT $900,000 BUT WILL BE BASED ON AVAILABLE FUND BALANCE AT FISCAL YEAR END WHEREAS, since the Redevelopment Agency's inception, the General Fund has advanced $30.8 million to the Redevelopment Agency as of the June 30, 2008 audited financial 'statements, and WHEREAS, the Redevelopment Agency has been unable to repay the General Fund in the past due to fund balance deficits; and WHEREAS, at this time it is anticipated that the RDA will be able to repay between $900,000 to $1.1 million at the end of the current fiscal year; and WHEREAS, the actual amount of the repayment will be determined as part of the fiscal year end close to ensure that the RDA doesn't fall into a deficit; and WHEREAS, the repayments are possible due to increased tax increment revenues and budgetary savings resulting from position vacancies or cuts in the fiscal year 2008/2009; and WHEREAS, in the current fiscal year total tax increment revenues are projected at $14.5 million compared to the prior year amount of$13.8 million; and WHEREAS, City staff anticipates that the RDA will be able to repay between $900,000 and $ I. I million to the General Fund at the end of this fiscal year. NOW, THEREFORE, BE IT RESOLVED that the Redevelopment Agency of the City of Chula Vista does hereby authorize the appropriation from the Redevelopment Agency Merged Project Fund to the General Fund of an amount estimated at $900,000 but not-to-exceed the Redevelopment Agency available fund balance, to be determined at fiscal year end for fiscal year 2008-09. Presented by Approved as to form by Maria Kachadoorian Chief Financial Officer of the Redevelopment Agency q)l~ ~ 10-3