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STAFF REPORT
REQUEST: ADOPTION OF ORDINANCE NO. 1062 AMENDING THE
REDEVELOPMENT PLAN, AS AMENDED, FOR PROJECT AREA NO. 3,
AS AMENDED, OF THE PALM DESERT REDEVELOPMENT AGENCY
ADOPTION OF ORDINANCE NO. 1063 AMENDING THE
REDEVELOPMENT PLAN FOR PROJECT AREA NO.4 OF THE PALM
DESERT REDEVELOPMENT AGENCY
SUBMITTED BY: DAVE YRIGOYEN, DIRECTOR OF REDEVELOPMENT
DATE: FEBRUARY 26, 2004
CONTENTS: ORDINANCE NO. 1062 FOR PROJECT AREA NO.3
DETERMINATION OF NEED FOR ADDITIONAL ENVIRONMENTAL
STUDY (PROJECT AREA NO. 3)
ORDINANCE NO. 1063 FOR PROJECT AREA NO. 4
DETERMINATION OF NEED FOR ADDITIONAL ENVIRONMENTAL
STUDY ( PROJECT AREA NO. 4)
Recommendation:
By Minute Motion, that the City Council adopt the following ordinances for first
reading:
1. Ordinance No. 1062 , an ordinance of the City of Palm Desert amending
the Redevelopment Plan for Project Area No. 3 of the Palm Desert
Redevelopment Agency; and
2. Ordinance No. 1063 , an ordinance of the City of Palm Desert amending
the redevelopment Plan for Project Area No. 4 of the Palm Desert
Redevelopment Agency.
Executive Summary:
Approval of the ordinances for Project Areas Nos. 3 and 4 will provide the project areas with an
extension of the time limit to incur debt previously established by the City Council. The current limits
are July 17, 2007, for Project Area 3, and July 19, 2013, for Project Area 4. The extension will
require the Agency to provide a pass-through to affected taxing agencies which do not currently
have pass-through agreements. Extensions for Project Areas 1 and 2 have previously been
approved.
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Adoption of Ordinances amending Project Area Nos. 3 and 4 redevelopment plans
February 26, 2004
Page 2 of 3
Discussion
In November 1994, the City Council adopted Ordinance Nos. 765, 766, 767, and 768. These
adoptions were pursuant to the obligations imposed by AB 1290 establishing new time limits on
redevelopment project areas. At that time, the limits adopted were as follows:
Project Area No. 1
The 1994 limits in connection with the territory included in the original boundaries of Project Area
No. 1 are as follows: the limit on establishing loans, advances and indebtedness is January 1,
2004; the effectiveness of the Plan now terminates on July 16, 2015; and the new limit on paying
indebtedness and receiving property taxes is July 16, 2025.
The 1994 limits in connection with the territory added to the Project Area by the Second
Amendment to the Plan, adopted in 1982, are as follows: the limit on establishing loans, advances
and indebtedness is January 1, 2004; the effectiveness of the Plan now terminates on November
25,2021;and the limit on paying indebtedness and receiving property taxes is November 25, 2031.
Project Area No. 2
The limit on establishing loans, advances and indebtedness is July 17, 2007; the effectiveness of
the Plan will terminate on July 15, 2027; and the limit on paying indebtedness and receiving
property taxes is July 15, 2037.
Project Area No. 3
The limit on establishing loans, advances and indebtedness is July 17, 2011; the effectiveness of
the Plan will terminate on July 17, 2031; and the limit on paying indebtedness and receiving
property taxes is July 17, 2041.
Project Area No. 4
The limit on establishing loans, advances and indebtedness is July 19, 2013; the effectiveness of
the Plan now terminates on July 19, 2033;and the 1994 limit on paying indebtedness and receiving
property taxes is July 19, 2043.
SB 211
On October 10, 2001, the Governor signed SB 211 (Torlakson) which authorized several
extensions to time limits established by AB 1290. The time limit extension, which is the purpose of
this report, is the ability to incur debt for Project Areas 3 and 4.
During last year's budget crisis, several reports indicated that a moratorium was being considered
on the Agency's ability to extend deadlines. Project Area 3's deadline to incur debt sunsets on July
17, 2007. Project Area 4's deadline is July 19, 2013. Staff is prepared to proceed with the
extension of the deadlines for those project areas at this time.
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Adoption of Ordinances amending Project Area Nos. 3 and 4 redevelopment plans
February 26, 2004
Page 3 of 3
SB 211 Obligations
The impacts of this extension have been analyzed through a financial analysis performed by
Rosenow Spevacek Group. Approval of this extension creates a pass-through to those affected
taxing entities which the Agency has no pass-through agreements with.
While current tax increment is not impacted, a new base year would be established for new
incremental growth. The affected taxing entities with no pass-through agreements would receive
25%of that new incremental growth as pass-through. In Project Area 3, the first payments to such
taxing entities would be in 2012-2013 with a total estimated payment of$1,260.00. In Project Area
4,the payment impact would not be forthcoming until 2022 with a$36,264 total estimated payment.
Staff's analysis shows that the loss of the ability to incur debt is more detrimental than the new
base year payments to the affected taxing entities.
Bond Insurers
Prior to amending a project area, the Agency must accomplish an analysis that demonstrates to
the Bond Insurer that there is sufficient increment to continue paying the bonds. Additionally, the
Agency must receive specific approval from the bond insurers who currently insure our bonds. Staff
is currently working with MBIA, our current insurer, demonstrating that the amendment will not
impact existing bonds and therefore continues to be the 1.25 coverage ratio for Project Area No.
4, as obligated by the bond documents.
The Agency issued bonds in Project Area No. 3 in August 2003. The Agency indicated to the bond
insurers that we would adopt an ordinance amending the project area for SB 211. The insurers
gave us a commitment based on this. The Agency is not seeking the bond insurers' permission
for Project Area No. 3.
Staff recommends that the City Council approve the Ordinances and move them to a second
reading.
Submitted by: Department Head:
D id rigoy n, for of Re evelopment ti McCarthy, AC /Re pment
Approved:
Carlos L. 0 a, City Manager Paul S. Gibson, Director of Finance
CITY COUNCIVACTION:
APPROVED VV DENIED
RECEIVED OTHER
If'
G:\RDAWiamh Ortega\WP Data\Cathy\Staff Reports\RDA plan for PA3&4.wpd MEET IN� 4 E
/ � `�' `
AYES• I U Y
NOES:
ABSENT: LDS
ABSTAIN:
VERIFIED BY: DK
Original Qn File uffth City Clerk's Office