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Home My WebLink AboutE-14 Staff Report - Central Business District and West End Redevelopment Project AreaCONSENT ITEM E-14 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL VIA: SERGIO GONZALEZ, CITY MANAGER FROM: KURT CHRISTIANSEN, DIRECTOR OF COMMUNITY AND ECONOMIC DEVELOPMENT DATE: APRIL 16, 2018 SUBJECT: CONSIDERATION OF A RESOLUTION OF THE CITY OF AZUSA, CALIFORNIA, ELECTING TO RECEIVE ALL OR A PORTION OF THE TAX REVENUES PURSUANT TO HEALTH AND SAFETY CODE SECTIONS 33607.5 AND 33607.7 FOR THE MERGED CENTRAL BUSINESS DISTRICT AND WEST END REDEVELOPMENT PROJECT AREA BACKGROUND: Pursuant to Health and Safety Code Sections 33607.5 and 33607.7, the City may elect to receive an amount equal to 25 percent of the proportionate share of the tax increment received by the former Azusa Redevelopment Agency after the amount required to be deposited in the Low and Moderate Income Housing Fund has been deducted. To elect to receive this funding, the City must adopt a resolution and submit the resolution to the County Auditor-Controller no later than May 15, 2018. RECOMMENDATION: Staff recommends the City take the following action: 1) Adopt Resolution No. 2018-C35 electing to receive a portion of the tax increments pursuant to Health and Safety Code Sections 33607.5 and 33607.7. ANALYSIS: The City Council of the City of Azusa previously adopted the Redevelopment Plan (“Redevelopment Plan”) for the Merged Central Business District and West End Redevelopment Project Area (“Project Area”), which Redevelopment Plan has been amended numerous times. Upon adoption of the Redevelopment Plan, the Azusa Redevelopment Agency (“Agency”) was vested with the responsibility to carry out the Redevelopment Plan. APPROVED CITY COUNCIL 4/16/2018 Tax Increments – Health and Safety Code April 16, 2018 Page 2 Section 33607.7 of the Health and Safety Code provides, in part, that if a redevelopment plan adopted prior to January 1, 1994, is amended to increase or eliminate the time limit on the establishing of loans, advances, and indebtedness established pursuant to Section 33333.6, and an agreement was not entered into by the agency and the taxing entity prior to January 1, 1994, that requires payments to the taxing entity, the agency shall pay to such affected taxing entity the amounts required pursuant to subdivisions (b), (c), (d), and (e) of Section 33607.5. Section 33607.5(a) of the Health and Safety Code provides that for any redevelopment plan that is amended to add territory after January 1, 1994, the community may elect to receive tax increments pursuant to Section 33607.5(b). Section 33607.5(b) provides that in any fiscal year in which a redevelopment agency receives tax increments, the community that has adopted the redevelopment project area may elect to receive, and the agency shall pay to it, an amount equal to 25 percent of its proportionate share of the tax increments received by the agency after the amount required to be deposited in the Low and Moderate Income Housing Fund has been deducted (the “City Election”). As part of the 2011-2012 State budget bill, the California Legislature enacted, and the Governor signed, companion bills AB 1X 26 and AB 1X 27, requiring that each redevelopment agency be dissolved as of October 1, 2011, unless the community that created it enacts an ordinance committing it to making certain payments. A Petition for Writ of Mandate was filed in the Supreme Court of the State of California on July 18, 2011 (California Redevelopment Association, et al. v. Ana Matosantos, et al., Case No. 5194861), challenging the constitutionality of AB 1X 26 and AB 1X 27 on behalf of cities, counties and redevelopment agencies. On December 29, 2011, the Supreme Court issued its final decision in the aforesaid litigation, upholding AB 1X 26, invalidating AB 1X 27, which resulted in the dissolution of all redevelopment agencies throughout the State effective February 1, 2012. Health and Safety Code Section 34183(a)(1), added by AB 1X 26, provides, in part, that following dissolution of redevelopment agencies, the county auditor-controller shall remit to each local agency an amount of property tax revenues in an amount equal to that which would have been received under Section 33607.5, as that section read on January 1, 2011. Although the City Council did not make the City Election at the time of amendment of the Redevelopment Plans pursuant to Health and Safety Code Section 33333.6, the City retains the right to opt to receive the City Election in any fiscal year in which a payment shall be made based on Sections 33607.7 and 33607.5. The attached resolution elects for the City to receive those payments. FISCAL IMPACT: By adopting the resolution, the City elects to receive tax increments under Health and Safety Code Sections 33607.5 and 33607.7 and will allow the City to continue to receive the City’s General Fund in the amount of 25 percent of the City’s proportionate share of the tax increments received from the Project Area after the amount required to be deposited in the Low and Moderate Income Housing Fund has been deducted. Not adopting the resolution will disqualify the City from receiving future revenues associated with the 25 percent share. Tax Increments – Health and Safety Code April 16, 2018 Page 3 Prepared by: Reviewed and Approved: Kurt Christiansen Louie F. Lacasella Director of Community and Economic Development Senior Management Analyst Reviewed and Approved: Sergio Gonzalez City Manager Attachment: 1. Resolution No. 2018-C35 145635.09000\30831634.2 RESOLUTION NO. 2018-C35 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AZUSA, CALIFORNIA, MAKING AN ELECTION TO RECEIVE PAYMENTS PURSUANT TO HEALTH AND SAFETY CODE SECTIONS 33607.7 AND 33607.5 FOR THE MERGED CENTRAL BUSINESS DISTRICT AND WEST END REDEVELOPMENT PROJECT AREA WHEREAS, the former Azusa Redevelopment Agency (“Agency”) created a redevelopment plan for the Merged Central Business District and West End Redevelopment Project Area (“Project Area”), which was amended multiple times after January 1, 1994 to add territory and ; and WHEREAS, Section 33607.7 of the Health and Safety Code provides that if the Agency amends the redevelopment plan to increase the limitation on the number of dollars to be allocated to the Agency, or eliminates the time limit on the establishing of loans, advances and indebtedness, or lengthens the period during which the Redevelopment Plan is effective, and no pass through agreement exists, the amounts required pursuant to subdivisions (b), (c) (d) and (e) of Section 33607.5 must be paid to each affected taxing entity, including the City, if the City elects to receive such tax increments; and WHEREAS, for redevelopment plans adopted or amended to add territory on or after January 1, 1994, Health and Safety Code section 33607.5 provides that in any fiscal year in which a redevelopment agency receives tax increment revenues, the community that has adopted the redevelopment project area or amendment area may elect to receive, and the agency shall pay it, an amount equal to twenty-five percent (25%) of its proportionate share of the tax increments received by the Agency after the amount required to be deposited in the Low and Moderate Income Housing Fund has been deducted (“City Election”); and WHEREAS, the City of Azusa is an affected taxing entity under Section 33607.5. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF AZUSA AS FOLLOWS: Section 1: The Recitals set forth above are true and correct and are incorporated into this Resolution by this reference. Section 2: Pursuant to Health and Safety Code Sections 33607.7 and 33607.5, the City Council hereby elects to receive its share of the twenty-five percent (25%) tax increment pass-through payment authorized by Health and Safety Code Section 33607.5(b) commencing with the first fiscal year the Agency is required to make such payments to the affected taxing entities and continuing each year thereafter. Section 3: The City Council authorizes and direct the City Manager to take any further actions and execute any documents necessary to implement this Resolution including, without limitation, submitting a copy of this Resolution to the Los Angeles County Auditor-Controller. Attachment 1 245635.09000\30831634.2 PASSED AND ADOPTED by the City Council of the City of Azusa at a regular meeting held on the day of , 2018. ______________________________ Joseph Romero Rocha Mayor I HEREBY CERTIFY that the foregoing Resolution was duly adopted at a regular meeting of said City Council on the day of , 2018, by the following vote: AYES: COUNCIL MEMBERS: NAYS: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: ________________________________________________ Jeffrey Lawrence Cornejo, Jr. City Clerk