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Home My WebLink About2011/05/03 Item 05HULA V I S T A REDEVELOPMENT AGENCY AGENDA STATEMENT MAY 3, 2011 Item `J~ ITEM TITLE: RESOLUTION OF THE CHULA VISTA REDEVELOPMENT AGENCY (A) AUTHORIZING AN INTERFUND LOAN OF $856,613 FROM THE LOW AND MODERATE INCOME HOUSING FUND TO THE REDEVELOPMENT FUND FOR THE STATE REQUIRED SERAF PAYMENT; AND (B) AUTHORIZING NECESSARY BUDGET ADJUSTMENTS TO APPROPRIATE THE INTERFUND LOAN OF $856,613, SUBMITTED BY: ASSISTANT CITY MANAGEDEVELOPMENT SERVICES DIRECTOR REVIEWED BY: CITY MANAGER 4/STHS VOTE: YES ~ NO SUMMARY Assembly Bill ABX4-26 of 2009 requires redevelopment agencies to remit a prescribed share of a cumulative contribution to the Supplemental Educational Revenue Augmentation Fund (SERAF) over atwo-year period. The Redevelopment Agency submitted its first payment in May of 2010. The current calculation issued by the County of San Diego (County) requires a payment of $856,613 for 2011. The Redevelopment Agency does not have sufficient funds in the Redevelopment Fund to make the second SERAF payment. Therefore, staff is recommending that the Agency borrow $856,613 from the Low and Moderate Income Housing Fund to make the SERAF payment. ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a "Project" as defined under Section 15378 of the State CEQA Guidelines because it involves a governmental fiscal action which will not result in direct or indirect physical changes or impacts to the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary. 5-1 May 3, 2011 Item ~J Page 2 of 3 RECOMMENDATION That the Redevelopment Agency approves the resolution BOARDS/COMMISSION RECOMMENDATION On April 28, 2011, the Chula Vista Redevelopment Corporation (CVRC) will consider the resolution recommending that the Chula Vista Redevelopment Agency appropriate and submit the second SERAF payment in the amount of $856,613. DISCUSSION Background On July 24, 2009, the Califomia State Legislature approved a 30-bill package that included ABX4-26 requiring redevelopment agencies to remit to their county SERAF a proportionate share of $1.7 billion for fiscal year 2009-10 and $350 million for fiscal year 2010-11 for a total take of $2.05 billion. The calculation issued by the County of San Diego (County) required the Chula Vista Redevelopment Agency (Agency) to submit a $4,160,694 for 2010 and $856,613 for 2011 bringing the total obligation of the Agency to $5,017,307. The bill also authorized redevelopment agencies to suspend or borrow all or part of its required allocation to the Low and Moderate Income Housing Fund from property tax increment revenues that are allocated to the agency in order to make the payment with provisions to repay the funds within 5 years. Low and Moderate Income Housint Fund Loan State regulations allow agencies to borrow up to 50% of the current year revenues from available Low and Moderate Income Housing Funds in order to make the SERAF payment. The Redevelopment Agency does not have sufficient funds in the Redevelopment Fund to make the second SERAF payment. However, there are sufficient funds in the Low and Moderate Income Housing Fund. Staff is recommending that the Agency borrow $856,613 from the Low and Moderate Income Housing Fund to make the SERAF payment. In accordance with standard practice, this loan will accrue interest at the interest pool rate. Loan repayments will be budgeted through the normal budget process, based on available revenue. This loan must be repaid by May, 2016. DECISION MAKER CONFLICT Staff has determined that the action contemplated by this item is ministerial, secretarial, manual, or clerical in nature and does not require the Redevelopment Agency members to make or participate in making a governmental decision, pursuant to California Code of Regulations section 18702.4(a). Consequently, this item does not present a conflict under the Political Reform Act (Cal. Gov't Code § 87100, et seq.). CURRENT YEAR FISCAL IMPACT The impact to Fiscal Year 2011 is a loan from the Low and Moderate Income Housing Fund of $856,613 to be repaid in full prior to May 2016. The current fund balance in the Low and Moderate Income Housing Fund is approximately $9.7 million. This loan for payment of the 5-2 May 3, 2011 Item J~ Page 3 of 3 SERAF will result in a remaining fund balance of approximately $8.8 million. It is anticipated there will still be sufficient fund balance to support future affordable housing development in the affected time period. This loan will be repaid within five years. ONGOING FISCAL IMPACT There is currently no identified future SERAF obligation. Prepared by: Diem Do, Senior Project Coordinator, Development Services Department 5-3 AGENCY RESOLUTION NO.2011- RESOLUTION OF THE CHULA VISTA REDEVELOPMENT AGENCY (A) .AUTHORIZING AN INTERFUND LOAN OF $856,613 FROM THE LOW AND MODERATE INCOME HOUSING FUND TO THE REDEVELOPMENT FUND FOR THE STATE REQUIRED SERAF PAYMENT; AND (B) AUTHORIZING NECESSARY BUDGET ADJUSTMENTS TO APPROPRIATE THE INTERFUND LOAN OF $856,613 WHEREAS, Assembly Bill ABX4-26 of 2009 amended Sections 33334.2 and 33633 of the Health and Safety Code (H&S) requiring redevelopment agencies to remit an additional prescribed share to the Supplemental Educational Revenue Augmentation Fund (SERAF); and WHEREAS, Assembly Bill ABX4-26 of 2009 added Sections 33020.5, 33331.5, 33690, 33690.5, 33691 and 33692 to the Health and Safety Code (H&S) allowing agencies various options regarding the SERAF payment; and WHEREAS, the Redevelopment Agency of the City of Chula Vista (Agency) submitted its first payment of its prescribed SERAF share of $4,160,694 in May 2010; and WHEREAS, the Agency is required to submit a second payment of its prescribed SERAF share of $856,613 by May 10, 2011; and WHEREAS, state regulations allow agencies to borrow from the Low and Moderate Income Housing Fund in order to make the SERAF payment; and WHEREAS, the Agency has insufficient funds in the Redevelopment Fund to make the SERAF payment and must borrow from the Low and Moderate Income Housing Fund; and WHEREAS, the funds borrowed from the Low and Moderate Income Housing Fund will be repaid within 5 years from the date the funds are remitted to the County Auditor; and WHEREAS, the Agency desires to borrow the amount of the SERAF payment ($856,613) from the Low and Moderate Income Housing Fund. NOW, THEREFORE, BE IT RESOLVED, by the Redevelopment Agency of the City of Chula Vista as follows: (A) The Chula Vista Redevelopment Agency does hereby authorize an interfund loan up to $856,613 from the Low and Moderate Income Housing Fund to the Redevelopment Fund for the state required SERAF payment in the amount of $856,613; and 5-4 Resolution No. Page 2 (B) The Chula Vista Redevelopment Agency does hereby amend the FY 2010 Redevelopment Agency and Housing Authority budgets to appropriate the interfund loan and SERAF payment of $856,613. Presented by Gary Halbert, P.E, AICP Assistant City Manager/Development Services Director Approved as to form by: Glen R. Googins City Attorney 5-5