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HomeMy WebLinkAbout11 SECOND READING & ADOPTION OF ORDINANCE NO. 1405Agenda Item 11 Reviewed: , AGENDA REPORT City Manager Finance Director N/A MEETING DATE: AUGUST 2, 2011 TO: WILLIAM A. HUSTON, INTERIM CITY MANAGER FROM: PATRICIA ESTRELLA, CITY CLERK SERVICES SUPERVISOR SUBJECT: SECOND READING AND ADOPTION OF ORDINANCE NO. 1405 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. 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 were provided for Council consideration at its July 19, 2011 meeting. The City Council adopted Urgency Ordinance 1404 and had first reading of Ordinance 1405 by title only. RECOMMENDATION: Have second reading by title only and adoption of Ordinance No. 1405 (roll call vote). FISCAL IMPACT: None. BACKGROUND: On July 19, 2011, the City Council had first reading by title only and introduction of the following Ordinance: 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. 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 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. 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 th on the 19 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 th held on the 19 day of July, 2011, and was given its second reading, passed and nd adopted at a regular meeting of the City Council held on the 2 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