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HomeMy WebLinkAbout03 ADOPTION OF ORDINANCES 1404 & 1405AGENDA REPORT Agenda Item Reviewed: City Manager Finance Director ., MEETING DATE: JULY 19, 2011 TO: WILLIAM A. HUSTON, INTERIM CITY MANAGER & EXECUTIVE DIRECTOR FROM: CITY MANAGER'S OFFICE & REDEVELOPMENT AGENCY SUBJECT: ADOPTION OF ORDINANCES COMPLYING WITH PROVISIONS OF ASSEMBLY BILL X1 27 ("AB 27") AND ELECTING TO IMPLEMENT PARTICIPATION BY THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY IN THE ALTERNATIVE VOLUNTARY REDEVELOPMENT PROGRAM SUMMARY As of June 29, 2011 with the Governor's approval of ABX1 26 ("AB 26"), all new redevelopment activities, including the issuance of debt and the execution of contracts, were suspended. All redevelopment agencies ("RDA's") will be dissolved effective October 1, 2011. ABX1 27 ("AB 27" or the "Voluntary Program") allows a redevelopment agency to avoid elimination by opting into an "alternative voluntary redevelopment program" that requires various payments in lieu of elimination. Any intention for the City to opt into the Voluntary Program requires the adoption of an opt-in ordinance. In order to insure that this process is completed in time and that priority redevelopment projects and activities can continue, both an urgency ordinance and permanent ordinance are provided for Council consideration. The urgency ordinance requires adoption by a four- fifths vote. RECOMMENDATION It is recommended that the City Council: Adopt Urgency Ordinance No. 1404, by at least afour-fifths vote. 2. Introduce Ordinance No. 1405, for first reading by title only. It is also recommended that the Tustin Community Redevelopment Agency ("RDA" or "Agency") authorize the City's Finance Director, in consultation with the Executive Director and Assistant Executive Director, to make the Voluntary Program payments that may be required pursuant to AB 27 after any City appeal and as determined by the 776031.1 Agenda Report -Adoption of Ordinances Complying with Provisions of Assembly Bill X1 27 ("AB27") July 19, 2011 Page 2 California Department of Finance, from Agency available cash balances in any of the Project Areas as may be needed to make the annual Voluntary Program payments in Fiscal Year 2011-12, without any additional appropriation required. FISCAL IMPACT It is anticipated that the Tustin Community RDA will be notified by August 1, 2011 of the payments that will be required for participation in the Voluntary Program in lieu of elimination of Tustin's RDA. Payment amounts will be determined by the State Department of Finance ("DoF") based on a formula in the statute. The current payment estimates for Tustin provided by the California Redevelopment Association ("CRA") are approximately $7.1 million for Fiscal Year 2011-2012 and approximately $1.7 million for Fiscal Year 2012-13 and thereafter. Staff believes that the preliminary estimates are not correct and that we may need to appeal DoF numbers that will be forthcoming since the RDA has incurred more than a ten percent increase in bonded indebtedness since Fiscal Year 2008-09. If the appeal is successful it could significantly lower any estimated Tustin Voluntary Program payment. Once DoF issues estimates to Tustin by August 1St, the City can appeal any estimates by August 15th. The City's Finance Director has reviewed available RDA cash balances and anticipates having sufficient funds available to make the required Voluntary Program payments in Fiscal Year 2011-12, and in the near term subsequent fiscal years, although the payments will limit resources available for completion of all anticipated RDA implementation activities in the future. The alternative posed by the Dissolution Bill is unacceptable since it provides no resources for future RDA implementation and has all RDA resources and assets transferred to a successor agency, largely representing local school districts and other taxing agencies. There is no impact anticipated on the General Fund. BACKGROUND AB 26 and AB 27, both trailer bills to the main state budget (Senate Bill 87), were recently approved by the Legislature and signed by the Governor on June 29, 2011. The AB 26 (the "Dissolution Bill") will dissolve Redevelopment Agencies ("RDA's") effective October 1, 2011. Until that time, RDA's are prohibited from taking any new actions other than payment of existing indebtedness and performance of existing contractual obligations. Under the Dissolution Bill on October 1st, all agency property and obligations would be transferred to successor agencies, except for the assets of the Low and Moderate Income Housing Fund, and overseen by an oversight board, the county 776031.1 Agenda Report -Adoption of Ordinances Complying with Provisions of Assembly Bill X1 27 ("AB27") July 19, 2011 Page 3 auditor-controller, and the DoF. Assets in the Low and Moderate Income Fund would be transferred to the auditor-controller for immediate distribution to taxing agencies. Successor agencies will be charged with repaying existing RDA indebtedness, completing performance of existing contractual obligations and otherwise winding down operations and preserving/disposing of RDA assets for the financial benefit of taxing agencies. The actions of successor agencies will be subject to review by a local oversight committee. AB 27 (the "Voluntary Program Bill") provides that, notwithstanding the Dissolution Bill, any RDA may avoid dissolution by opting into a Voluntary Program permitting it to continue to operate and function if the City has adopted an opt-in ordinance by November 1, 2011. The contents of the ordinance must commit the City to making specified substantial annual payments into a Special District Allocation Fund ("SDAF") and Educational Revenue Augmentation Fund ("ERAF") established for each county and administered by the county auditor-controller largely to benefit local school and special districts. If all RDA's state-wide opt into the Voluntary Program, contributions will amount to a total of $1.7 Billion for Fiscal Year 2011-12 and appear intended to amount to $400 million in each succeeding fiscal year. The amount of the payment for each city or county is calculated by the DoF and will be communicated to the cities and counties no later than August 1, 2011. Following a September 15th deadline for DoF to issue its determination on any appeals of Voluntary Program payments, Tustin will have to recognize the payment schedule by January 1, 2012. One-half of the payment for Fiscal Year 2011-12 will be due by January 15, 2012, and the other half will be due by May 15, 2012. The State Constitution protects city property tax and redevelopment agency property tax increment in various ways. These Bills ignore these protections by: (1) accomplishing indirectly what could not be done directly; and (2) calling the Voluntary Program Bill (AB 1X 26) ransom payment "voluntary." While it is expected that there will be a legal fight by CRA and communities directly, this may take some time. Provisions of the Voluntary Bill will automatically preclude any RDA from issuing subsequent debt in the event such legal challenge of the legislation is successful. Failure of the City to adopt a Voluntary Program Ordinance will result in the termination of Tustin RDA activities, turn over Agency financial and property assets (including real estate assets) to a successor agency, and preclude the RDA from proceeding with critical City priorities, including construction of Tustin Ranch Road. This will be detrimental to the health, safety and economic well-being of 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 RDA are highly significant and of enduring benefit to the community and City, and are a critical component of its future. 776031.1 Agenda Report -Adoption of Ordinances Complying with Provisions of Assembly Bill X1 27 ("AB27") July 19, 2011 Page 4 Current City and RDA priorities and obligations, particularly under the more recent 2010 Tax Allocation Bonds (MCAS Tustin Project Area) issued in November necessitate that the RDA be able to move forward with contracts and other RDA implementation activities in the near future to meet obligations under the Tax Reform Act, and to ensure earthwork activity begins on Tustin Ranch Road before the fall rainy season. If construction of storm drain work and grading for Tustin Ranch Road are not commenced before the rainy season, a threat to the public peace, health, and safety would occur. Urgency Ordinance 1404 is necessary to allow the bids for the Tustin Ranch Road project to be issued, thereby ensuring draw-downs of bond proceeds occur consistent with obligations under the Tax Reform Act and to allow the City to ensure that infrastructure obligations are met not only under the bond measure but obligations required for private development to occur within the Tustin Legacy project as required under the Final Environmental Impact Report/Environmental Impact Statement and phasing requirements contained in Section 4.4 of the MCAS Tustin Specific Plan. Appropriately, attached for City Council consideration is Urgency Ordinance 1404 which would permit RDA implementation activities to continue immediately and allow award of a contract for Tustin Ranch Road- Phase 1. In addition, Ordinance 1405 (a permanent ordinance) is also attached for City Council first reading (introduction) to be followed by a proposed second reading (adoption) at the City Council's meeting on August 2, 2011. The permanent ordinance would become effective 30 days after adoption on August 2, 2011. Pursuant to both Ordinances 1404 and 1405, the City Manager or Assistant City Manager would be authorized and directed to notify the county auditor-controller, the Controller of the State and the State DoF that the City will comply with the provisions of AB 27. Christine A. Shingle Assistant City Manager and Assistant Executive Director Attachments: Urgency Ordinance 1404 and 1405. 776031.1 Ordinance 1404 ORDINANCE NO. 1404 AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, PURSUANT TO HEALTH AND SAFETY CODE SECTION 34193 TO ELECT AND IMPLEMENT PARTICIPATION BY THE CITY OF TUSTIN AND THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY IN THE ALTERNATIVE VOLUNTARY REDEVELOPMENT PROGRAM PURSUANT TO PART 1.9 OF THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW. (4/5THS VOTE REQUIRED.) City Attorney Summary On June 29, 2011, the Governor signed a law dissolving all redevelopment agencies. At the same time, the Governor signed a law that provides a city the option to continue the existence of its redevelopment agency subject to a series of new conditions and commitments - primarily commitments to make payments to other agencies to be used for special district and educational purposes. Adoption of this Urgency Ordinance would enable the continued existence of the Tustin Community Redevelopment Agency, subject to the requirements in the new State law. As an urgency ordinance, a 4/5ths vote is required to approve the ordinance. THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, FINDS: A. Pursuant to the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq., the "Redevelopment Law"), the City Council (the "City Council") of the City of Tustin (the "City") adopted an ordinance declaring the need for the Tustin Community Redevelopment Agency (the "Agency") to function in the City. B. Also in accordance with the Redevelopment Law, the City Council has adopted Redevelopment Plans, and the Agency is responsible for implementing the Redevelopment Plans pursuant to the Redevelopment Law. C. ABX1 26 (the "Dissolution Act") and ABX1 27 (the "Voluntary Program Act;" and together with the Dissolution Act, the "Redevelopment Restructuring Acts") have been enacted to significantly modify the Redevelopment Law generally as follows: (1) The Dissolution Act first immediately suspends all new redevelopment activities and incurrence of indebtedness, and dissolves redevelopment agencies effective October 1, 2011; and Ordinance No. 1404 Page 1 of 6 (2) The Voluntary Program Act, through the addition of Part 1.9 to the Redevelopment Law (the "Alternative Voluntary Redevelopment Program"), then allows a redevelopment agency to avoid dissolution under the Dissolution Act by opting into an alternative voluntary redevelopment program requiring specified annual contributions to local school and special districts. D. Specifically, Section 34193(a) of the Redevelopment Law (as added to the Redevelopment Law by the Voluntary Program Act) authorizes the City Council to enact an ordinance to comply with Part 1.9 of the Redevelopment Law, thereby exempting the Agency from the provisions of the Dissolution Act, and enabling the Agency to continue to exist and function under the Redevelopment Law, so long as the City and the Agency comply with the Alternative Voluntary Redevelopment Program set forth in Part 1.9 of the Redevelopment Law. E. Through the adoption and enactment of this Ordinance, it is the intent of the City Council to enact the ordinance described in Section 34193(a) of the Redevelopment Law and to participate for itself and on behalf of the Agency in the Alternative Voluntary Redevelopment Program set forth in Part 1.9 of the Redevelopment Law. F. Pursuant to Section 34193.2(b) of the Redevelopment Law, the City Council understands that participation in the Alternative Voluntary Redevelopment Program requires remittance of certain payments as set forth in the Voluntary Program Act (as further described below), and also constitutes an agreement on the part of the City, in the event the City fails to make such remittance payments, to assign its rights to any payments owed by the Agency, including, but not limited to, payments from loan agreements, to the State of California. G. The City and Agency intend to execute an agreement pursuant to CRL Section 34194.2, whereby the Agency shall transfer portions of its tax increment to the City in amounts equal to the remittances which the City is required to make pursuant to the City's participation in the Alternative Voluntary Redevelopment Program. H. The City Council does not intend, by enactment of this Ordinance, to waive any rights of appeal regarding the amount of any remittance payments established by the California Department of Finance, as provided in the Voluntary Program Act. I. The City is aware that the validity, passage and applicability of ABx1 26 and ABx1 27 may become the subject of a judicial challenge. The City, by adopting this Ordinance, does not represent, disclaim, or take any position whatsoever on the issue of the validity of ABx1 26 or ABx1 27, but rather the City seeks to comply with the Constitution and laws of the State of California, including Part 1.9, in order to preserve the ability of the Agency to continue to operate and thereby benefit the community; J. The dissolution of the Agency would be detrimental to, and cause irreparable harm to, the community and to the health, safety, and economic well-being of the Ordinance No. 1404 Page 2 of 6 citizens of the City. The types of activities and projects made possible, implement and funded by the Agency are highly significant and of enduring benefit to the community and the City, and are a critical component of its future. K. The City Council has duly considered all other related matters and has determined that the City's participation in the Alternative Voluntary Redevelopment Program is in the best interests of the City, and the health, safety, and welfare of its residents, and in accordance with the public purposes and provisions of applicable state and local laws and requirements. L. This Ordinance is adopted for the immediate preservation of the public peace, health and safety and the following facts evidence the urgency hereof. The City Council finds that each of these grounds independently is sufficient grounds for the immediate enactment of this Ordinance on an urgent basis: (1) Delay in the operative date of this Ordinance would delay the Agency's ability to approve the agreements necessary to ensure earthwork activity begins on Tustin Ranch Road before the fall rainy season. If construction of storm drain work and grading for Tustin Ranch Road are not commenced before the rainy season, a threat to the public peace, health, and safety would occur. As a result, this Ordinance is needed for the immediate preservation of the public peace, health and safety. (2) 2010 Tax Allocation Bonds (MCAS Tustin Project Area) issued in November, 2010 require the Agency to move forward with contracts and other Agency implementation activities in the immediate future to meet obligations under the Tax Reform Act. Delay in the operative date of the Ordinance would delay the approval of such contracts, and thus could impair the ability of the Agency to comply with the bonded obligations, and delay or prevent construction of these vital infrastructure facilities. (3) Delay of construction of the Tustin Ranch Road and related infrastructure could also delay commencement of operation of Fire Station 37, which opening is tied to the opening of the Tustin Ranch Road extension. Even were the Fire Station to commence operation, however, construction of Tustin Ranch Road will provide a needed and vital link between the Fire Station on the south side of Edinger and commercial and residential communities north of Edinger. As a result, the immediate effectiveness of this Ordinance is necessary to avoid delays in the construction of the project necessary for the immediate preservation of the public peace, health and safety. (4) This Ordinance is necessary to allow the contracts for the Tustin Ranch Road project to be issued, thereby ensuring draw-downs of bond proceeds occur consistent with obligations under the Tax Reform Act and to allow the City to Ordinance No. 1404 Page 3 of 6 ensure that infrastructure obligations are met not only under the bond measure but obligations required for private development to occur within the Tustin Legacy project as required under the Final Environmental Impact Report/Environmental Impact Statement and phasing requirements contained in Section 4.4 of the MCAS Tustin Specific Plan. This Ordinance would permit Agency implementation activities to continue immediately and allow award of a contract for Tustin Ranch Road, Phase 1. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUSTIN DOES ORDAIN AS FOLLOWS: SECTION I. ENACTMENT OF ORDINANCE PURSUANT TO REDEVELOPMENT LAW SECTION 34193(a) To the extent required by law to maintain the existence and powers of the Agency under the Redevelopment Law (including the Redevelopment Restructuring Acts), the City Council hereby enacts the ordinance authorized by Section 34193(a) of the Redevelopment Law, hereby the City, on behalf of itself and the Agency, elects to and will comply with the provisions of Part 1.9 of the Redevelopment Law, including the making of the community remittance payments called for in Section 34194 of the Redevelopment Law (the "Remittance Payments"), and whereby the Agency will no longer be subject to dissolution or the other prohibitions and limitations of Parts 1.8 and 1.85 of the Redevelopment Law as added by the Dissolution Act. SECTION II. ADDITIONAL UNDERSTANDINGS AND INTENT It is the understanding and intent of the City Council that, once the Agency is again authorized to enter into agreements under the Redevelopment Law, the City will enter into an agreement with the Agency as authorized pursuant to Section 34194.2 of the Redevelopment Law, whereby the Agency will transfer annual portions of its tax increment to the City in amounts not to exceed the annual Remittance Payments (the "Agency Transfer Payments") to enable the City, directly or indirectly, to make the Annual Remittance Payments. Unless otherwise specified by resolution of the City Council, it is the City Council's intent that the City's annual Remittance Payments shall be made exclusively from the Agency Transfer Payments or from other funds that become available as a result of the City's receipt of the Agency Transfer Payments. The City Council does not intend, by enactment of this Ordinance, to pledge any of its general fund revenues or other assets to make the Remittance Payments, it being understood by the City Council that any Remittance Payments will be funded solely from the Agency Transfer Payments and/or other assets transferred to the City in accordance with the Voluntary Program Act. Ordinance No. 1404 Page 4 of 6 SECTION III. AUTHORIZATION OF IMPLEMENTING ACTIONS The City Manager or the City Manager's designee is hereby authorized, on behalf of the City, to take any actions necessary to implement this Ordinance and comply with the Voluntary Program Act, including, without limitation, providing required notices to the County Auditor-Controller, the State Controller, and the Department of Finance, entering into any agreements with the Agency to obtain the Agency Transfer Payments, and making the Remittance Payments. The City's Finance Director, in consultation with the City Manager and Assistant City Manager are hereby authorized, without further direction from the City Council, to review and submit any required and supportable appeal to the California Department of Finance pursuant to provisions and procedures contained in AB 27. SECTION IV. CEQA The City Council finds, under Title 14 of the California Code of Regulations, Section 15378(b)(4), that this ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) in that it is not a Project, but instead consists of the creation and continuation of a governmental funding mechanism for potential future projects and programs, and does not commit funds to any specific project or program. The appropriate environmental review shall be completed in accordance with CEQA prior to the commencement of any future Agency-supported project or program. The Council therefore directs that a Notice of Exemption be filed with the Orange County Clerk in accordance with the CEQA Guidelines. SECTION V. ENACTMENT AND EFFECTIVE DATES This urgency Ordinance is enacted, and shall take effect, immediately upon its adoption by a four-fifths (4/5) vote of the City Council. SECTION VI. SEVERABILITY. If any section, subsection, sentence, clause, phrase, or portion of this Ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council of the City of Tustin hereby declares that it would have adopted this Ordinance and each section, subsection, sentence, clause, phrase, or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional. Ordinance No. 1404 Page 5 of 6 PASSED, APPROVED AND ADOPTED, at a regular meeting of the City Council for the City of Tustin on the 19t" day of July, 2011. ATTEST: PAMELA STOKER CITY CLERK APPROVED AS TO FORM: DOUGLAS HOLLAND CITY ATTORNEY STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF TUSTIN ) JERRY AMANTE, MAYOR CERTIFICATION FOR ORDINANCE NO. 1404 PAMELA STOKER, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, does hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Ordinance No. 1404 was passed and adopted at the regular meeting of the City Council held on the 19t" day of July, 2011, by the following vote: COUNCILPERSONSAYES: COUNCILPERSONS NOES: COUNCILPERSONS ABSTAINED: COUNCILPERSONS ABSENT: PAMELA STOKER City Clerk Ordinance No. 1404 Page6of6 Ordinance 1405 ORDINANCE NO. 1405 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, PURSUANT TO HEALTH AND SAFETY CODE SECTION 34193 TO ELECT AND IMPLEMENT PARTICIPATION BY THE CITY OF TUSTIN AND THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY IN THE ALTERNATIVE VOLUNTARY REDEVELOPMENT PROGRAM PURSUANT TO PART 1.9 OF THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW. City Attorney Summary On June 29, 2011, the Governor signed a law dissolving all redevelopment agencies. At the same time, the Governor signed a law that provides a city the option to continue the existence of its redevelopment agency subject to a series of new conditions and commitments - primarily commitments to make payments to other agencies to be used for special district and educational purposes. Adoption of this. Urgency Ordinance would enable the continued existence of the Tustin Community Redevelopment Agency, subject to the requirements in the new State law. THE CITY COUNCIL OF THE CITY OF TUSTIN FINDS: A. Pursuant to the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.; the "Redevelopment Law"), the City Council (the "City Council") of the City of Tustin (the "City") adopted an ordinance declaring the need for the Tustin Community Redevelopment Agency (the "Agency") to function in the City. B. Also in accordance with the Redevelopment Law, the City Council has adopted Redevelopment Plans, and the Agency is responsible for implementing the Redevelopment Plans pursuant to the Redevelopment Law. C. ABX1 26 (the "Dissolution Act") and ABX1 27 (the "Voluntary Program Act"; and together with the Dissolution Act, the "Redevelopment Restructuring Acts") have been enacted to significantly modify the Redevelopment Law generally as follows: (1) The Dissolution Act first immediately suspends all new redevelopment activities and incurrence of indebtedness, and dissolves redevelopment agencies effective October 1, 2011; and (2) The Voluntary Program Act, through the addition of Part 1.9 to the redevelopment Law (the "Alternative Voluntary Redevelopment Program"), then allows a redevelopment agency to avoid dissolution under the Dissolution Act by opting into an alternative voluntary redevelopment program requiring specified annual contributions to local school and special districts. Ordinance No. 1405 Page 1 of 5 D. Specifically, Section 34193(a) of the Redevelopment Law (as added to the Redevelopment Law by the Voluntary Program Act) authorizes the City Council to enact an ordinance to comply with Part 1.9 of the Redevelopment Law, thereby exempting the Agency from the provisions of the Dissolution Act, and enabling the Agency to continue to exist and function under the Redevelopment Law, so long as the City and the Agency comply with the Alternative Voluntary Redevelopment Program set forth in Part 1.9 of the Redevelopment Law. E. Through the adoption and enactment of this Ordinance, it is the intent of the City Council to enact the ordinance described in Section 34193(a) of the Redevelopment Law and to participate for itself and on behalf of the Agency in the Alternative Voluntary Redevelopment Program set forth in Part 1.9 of the Redevelopment Law. F. Pursuant to Section 34193.2(b) of the Redevelopment Law, the City Council understands that participation in the Alternative Voluntary Redevelopment Program requires remittance of certain payments as set forth in the Voluntary Program Act (as further described below), and also constitutes an agreement on the part of the City, in the event the City fails to make such remittance payments, to assign its rights to any payments owed by the Agency, including, but not limited to, payments from loan agreements, to the State of California. G. The City and Agency intend to execute an agreement pursuant to CRL Section 34194.2, whereby the Agency shall transfer portions of its tax increment to the City in amounts equal to the remittances which the City is required to make pursuant to the City's participation in the Alternative Voluntary Redevelopment Program. H. The City Council does not intend, by enactment of this Ordinance, to waive any rights of appeal regarding the amount of any remittance payments established by the California Department of Finance, as provided in the Voluntary Program Act. I. The City is aware that the validity, passage and applicability of ABX1 26 and ABX1 27 may become the subject of a judicial challenge. The City, by adopting this Ordinance, does not represent, disclaim, or take any position whatsoever on the issue of the validity of ABX1 26 or ABX1 27, but rather the City seeks to comply with the Constitution and laws of the State of California, including Part 1.9, in order to preserve the ability of the Agency to continue to operate and thereby benefit the community; J. The dissolution of the Agency would be detrimental to, and cause irreparable harm to, the community and to the health, safety, and economic well-being of the citizens of the City. The types of activities and projects made possible, implement and funded by the Agency are highly significant and of enduring benefit to the community and the City, and are a critical component of its future. Ordinance No. 1405 Page 2 of 5 K. The City Council has duly considered all other related matters and has determined that the City's participation in the Alternative Voluntary Redevelopment Program is in the best interests of the City, and the health, safety, and welfare of its residents, and in accordance with the public purposes and provisions of applicable state and local laws and requirements. NOW, THEREFORE, THE CITY COUNCIL FO THE CITY FO TUSTIN DOES ORDAIN AS FOLLOWS: SECTION I. ENACTMENT OF ORDINANCE PURSUANT TO REDEVELOPMENT LAW SECTION 34193(a) To the extent required by law to maintain the existence and powers of the Agency under the Redevelopment Law (including the Redevelopment Restructuring Acts), the City Council hereby enacts the ordinance authorized by Section 34193(a) of the Redevelopment Law, hereby the City, on behalf of itself and the Agency, elects to and will comply with the provisions of Part 1.9 of the Redevelopment Law, including the making of the community remittance payments called for in Section 34194 of the Redevelopment Law (the "Remittance Payments"), and whereby the Agency will no longer be subject to dissolution or the other prohibitions and limitations of Parts 1.8 and 1.85 of the Redevelopment Law as added by the Dissolution Act. SECTION II. ADDITIONAL UNDERSTANDINGS AND INTENT It is the understanding and intent of the City Council that, once the Agency is again authorized to enter into agreements under the Redevelopment Law, the City will enter into an agreement with the Agency as authorized pursuant to Section 34194.2 of the Redevelopment Law, whereby the Agency will transfer annual portions of its tax increment to the City in amounts not to exceed the annual Remittance Payments (the "Agency Transfer Payments") to enable the City, directly or indirectly, to make the Annual Remittance Payments. Unless otherwise specified by resolution of the City Council, it is the City Council's intent that the City's annual Remittance Payments shall be made exclusively from the Agency Transfer Payments or from other funds that become available as a result of the City's receipt of the Agency Transfer Payments. The City Council does not intend, by enactment of this Ordinance, to pledge any of its general fund revenues or other assets to make the Remittance Payments, it being understood by the City Council that any Remittance Payments will be funded solely from the Agency Transfer Payments and/or other assets transferred to the City in accordance with the Voluntary Program Act. SECTION III. AUTHORIZATION OF IMPLEMENTING ACTIONS The City Manager or the City Manager's designee is hereby authorized, on behalf of the City, to take any actions necessary to implement this Ordinance and comply with the Voluntary Program Act, including, without limitation, providing required Ordinance No. 1405 Page 3 of 5 notices to the County Auditor-Controller, the State Controller, and the Department of Finance, entering into any agreements with the Agency to obtain the Agency Transfer Payments, and making the Remittance Payments. The City's Finance Director, in consultation with the City Manager and Assistant City Manager are hereby authorized, without further direction from the City Council, to review and submit any required and supportable appeal to the California Department of Finance pursuant to provisions and procedures contained in AB 27. SECTION IV. CEQA The City Council finds, under Title 14 of the California Code of Regulations, Section 15378(b)(4), that this ordinance is exempt from the requirements of the California Environmental Quality Act (CEQA) in that it is not a Project, but instead consists of the creation and continuation of a governmental funding mechanism for potential future projects and programs, and does not commit funds to any specific project or program. The appropriate environmental review shall be completed in accordance with CEQA prior to the commencement of any future Agency-supported project or program. The Council therefore directs that a Notice of Exemption be filed with the Orange County Clerk in accordance with the CEQA Guidelines. SECTION V. ENACTMENT AND EFFECTIVE DATES This Ordinance is enacted as of July 19, 2011 for purposes of Section 34193(a) of the Redevelopment Law, and shall take effect and will be enforced thirty (30) days after its adoption. SECTION VI. SEVERABILITY. If any section, subsection, sentence, clause, phrase, or portion of this Ordinance is for any reason held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council of the City of Tustin hereby declares that it would have adopted this Ordinance and each section, subsection, sentence, clause, phrase, or portion thereof irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional. PASSED AND ADOPTED, at a regular meeting of the City Council for the City of Tustin on the 19th day of July 2011. JERRY AMANTE, MAYOR Ordinance No. 1405 Page 4 of 5 PAMELA STOKER CITY CLERK APPROVED AS TO FORM: DOUGLAS HOLLAND, CITY ATTORNEY STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF TUSTIN ) CERTIFICATION FOR ORDINANCE NO. 1405 PAMELA STOKER, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, does hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Ordinance No. 1405 was duly and regularly introduced and read at the regular meeting of the City Council held on the 19th day of Juty, 2011, and was given its second reading, passed and adopted at a regular meeting of the City Council held on the 2"d day of August, 2011, by the following vote: COUNCILPERSONS AYES: COUNCILPERSONS NOES: COUNCILPERSONS ABSTAINED: COUNCILPERSONS ABSENT: PAMELA STOKER City Clerk Ordinance No. 1405 Page 5 of 5