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Home My WebLink AboutCC RES 2011-85RESOLUTION NO. 2011-85 A RESOLUTION OF CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, AUTHORIZING AND APPROVING THE EXECUTION AND DELIVERY OF A TRANSFER AGREEMENT PURSUANT TO HEALTH AND SAFETY CODE SECTION 34194.2 AND TAKING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH RECITALS A. The Palm Desert Redevelopment Agency (the "Agency") is a redevelopment agency in the City, created pursuant to the Community Redevelopment Law (Part 1 (commencing with Section 33000) of Division 24 of the California Health and Safety Code) (the "Redevelopment Law"). B. The City Council of the City (the "City Council") adopted (i) Ordinance No. 80, approving and adopting the redevelopment plan for Project Area No. 1, and from time to time, the City Council has amended such redevelopment plan, (ii) Ordinance No. 509, approving and adopting the redevelopment plan for Project Area No. 2, and from time to time, the City Council has amended such redevelopment plan, (iii) Ordinance No. 652, approving and adopting the redevelopment plan for Project Area No. 3, and from time to time, the City Council has amended such redevelopment plan, and (iv) Ordinance No. 724, approving and adopting the redevelopment plan for Project Area No. 4, and from time to time, the City Council has amended such redevelopment plan. C. AB X1 26 was signed by the Governor of California on June, 29, 2011, making certain changes to the Redevelopment Law, including adding Part 1.8 (commencing with Section 34161) and Part 1.85 (commencing with Section 34170) to Division 24 of the California Health and Safety Code. Commencing upon the effectiveness of AB X1 26, AB X1 26 suspends most redevelopment agency activities and, among other things, prohibits redevelopment agencies from incurring indebtedness or entering into or modifying contracts. Effective October 1, 2011, AB X1 26 dissolves all existing redevelopment agencies and redevelopment agency components of community development agencies, designates successor agencies to the former redevelopment agencies, and imposes numerous requirements on the successor agencies and subjects successor agency actions to the review of oversight boards established pursuant to the provisions of Part 1.85. D. AB X1 27 was signed by the Govemor of California on June 29, 2011, adding Part 1.9 (commencing with Section 34192) to Division 24 of the Califomia Health and Safety Code. Part 1.9 establishes an Alternative Voluntary Redevelopment Program (the "AVRP") whereby, notwithstanding the provisions of Part 1.8 and Part 1.85, a redevelopment agency will be authorized to continue to exist and carry out the provisions of the Redevelopment Law upon the enactment, prior to the applicable deadline established in Part 1.9, by the city council of the city which includes that redevelopment agency (the "Participating City"), of an ordinance to comply with Part 1.9. E. Part 1.9 requires a Participating City to make specified annual remittances to the applicable county auditor -controller, who shall allocate the remittances for deposit into a RESOLUTION NO. 2011-85 Special District Allocation Fund, for allocation to specified special districts, and into the county Educational Revenue Augmentation Fund, for allocation to educational entities. F. To participate in the AVRP, in addition to adopting the ordinance described in Recital D, above, Part 1.9 provides that the Participating City must, by November 1, 2011, notify the applicable county auditor -controller, the Controller of the State of California (the "State Controller"), and the Department of Finance of the State of California (the "Department of Finance") that the Participating City agrees to comply with the provisions of Part 1.9. The Participating City's agreement to make the remittances provided for under Part 1.9 is a precondition to continue redevelopment pursuant to Part 1.9. G. Part 1.9 provides that for fiscal year 2011-12, a Participating City shall remit to the applicable county auditor -controller an amount equal to the amount determined by the Director of Finance of the State of California (the "Director of Finance") for the redevelopment agency pursuant to a formula set forth in Part 1.9, which formula utilizes information contained in the State Controller's redevelopment agency 2008-09 annual report. The amount represents the redevelopment agency's proportionate share of the sum of $1,700,000,000. The initial amount determined by the Director of Finance is subject to recalculation and reduction in the event the Participating City timely files an appeal in accordance with Health and Safety Code Section 34194(b)(2)(L). H. For fiscal year 2012-13 and each fiscal year thereafter, a Participating City's remittance shall be in an amount calculated by the Participating City in accordance with the requirements of Part 1.9, subject to adjustment based on audit and verification by the Director of Finance, the State Controller and the applicable county auditor -controller. Part 1.9 provides that on or before November 1st of each year, commencing November 1, 2012, a Participating City shall notify the Department of Finance, the State Controller, and the applicable county auditor -controller of the remittance amount calculated by the Participating City. I. Pursuant to the provisions of Part 1.9, a Participating City shall pay one-half of the total remittance amount for a fiscal year on or before January 15 of that year and shall pay the remaining one-half of the remittance amount on or before May 15 of that year. J. A Participating City making remittances pursuant to Part 1.9 may use any funds available to the City and not otherwise obligated for other uses. K. Pursuant to Health and Safety Code Section 34194.2, a Participating City and the redevelopment agency in that Participating City may enter into an agreement whereby the agency will transfer a portion of its tax increment to the Participating City in an amount not to exceed the annual remittance required that year pursuant to Part 1.9. L. The City Council adopted Ordinance No. 1227, on September 8th, 2011, pursuant to Health and Safety Code Section 34193, to become a Participating City in the AVRP for the purpose of allowing the Agency to continue to exist and carry out the provisions of the Redevelopment Law, notwithstanding the provisions of Part 1.8 and 1.85. M. The California Redevelopment Association and League of California Cities have filed a lawsuit in the Supreme Court of California alleging that AB X1 26 and AB X1 27 are 2 81000-016311382914v3 doc G lyda\Patty LeonUMMlstaff report\RESOLUTIONS\City Reso for City -Agency Transfer Agreement (HS Code 34194 2) doc RESOLUTION NO. 2011-85 unconstitutional. On August 11, 2011, the Supreme Court of California decided to hear the case and set a briefing schedule designed to allow the Supreme Court to decide the case before January 15, 2012. On August 11, 2011, the Supreme Court also issued a stay order (the "Stay Order"), which was subsequently modified on August 17, 2011. Pursuant to the modified Stay Order, the Supreme Court granted a stay of all of AB X1 27 (i.e., Part 1.9), except for Health and Safety Code Section 34194(b)(2) (relating to the determination of cities' fiscal year 2011-12 remittance amounts) and a stay of a portion of AB X1 26. With respect to AB X1 26, Part 1.85 was stayed in its entirety, but Part 1.8 was not stayed. N. In the event the Stay Order is lifted and the Supreme Court upholds AB X1 26 and AB X1 27, the City desires to participate in the AVRP so that the Agency may continue to exist and carry out the provisions of the Redevelopment Law. O. In the event the Stay Order is lifted and the Supreme Court upholds AB X1 26 and AB X1 27, the City and the Agency desire to enter into an agreement (the "Transfer Agreement") to provide for the Agency's transfers (each, a "Transfer") of a portion of its tax increment to the City, pursuant to Health and Safety Code Section 34194.2, such that the total amount of the Transfers in any fiscal year shall be equal to be the Annual Remittance for that fiscal year. P. The Transfer Agreement will not have any effect unless and until the Supreme Court lifts or modifies the Stay Order in a manner such that the prohibitions in Part 1.8 do not apply to the Agency and the Agency is permitted to perform under the Transfer Agreement pursuant to Health and Safety Code Section 34194.2 or other provisions of law. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PALM DESERT HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1. The above recitals are true and correct and are a substantive part of this Resolution. Section 2. The Transfer Agreement, in the form presented and on file with the City Clerk, is hereby approved. The Mayor, or in the Mayor's absence, the Mayor Pro-Tem, acting singly, is hereby authorized and directed to execute and deliver, for and in the name of the City, the Transfer Agreement in substantially that form, with such changes therein as the Mayor (or the Mayor Pro-Tem, as the case may be) may approve (such approval to be conclusively evidenced by the execution and delivery thereof). Section 3. The adoption of this Resolution is not intended and shall not constitute a waiver by the City of any right the City may have to challenge the legality of all or any portion of AB X1 26 or AB X1 27 through administrative or judicial proceedings. Section 4. This Resolution and the Transfer Agreement have been reviewed with respect to applicability of the California Environmental Quality Act ("CEQA"), the State CEQA Guidelines (California Code of Regulations, Title 14, Sections 15000 et seq., hereafter the "Guidelines" ), and the City's environmental guidelines. The City Council has determined that neither this Resolution nor the Transfer Agreement Ordinance is a "project" for purposes of CEQA, as that term is defined by Guidelines Section 15378. Specifically, this Resolution and the Transfer Agreement constitute the creation of government funding 3 81000-0163\1382814v3.doc f:9rrtaMatly I wen l IM1.Ilelaff rnnnrt\RFCf11 I ITIf1NR\Gtv Raen fr r City-Anannr Trancfar Anraomant II-Iq rm. 14144 71 rirr RESOLUTION NO. 2011-85 mechanisms or other government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment. (Guidelines Section 15378(b)(4)). In addition, this Resolution and the Transfer Agreement constitute organizational or administrative activities that will not result in a direct or indirect physical change in the environment. (Guidelines Section 15378(b)(5)). Therefore, because neither the Resolution nor the Transfer Agreement is a "project," they are not subject to CEQA's requirements. Further, even if either this Resolution or the Transfer Agreement were deemed a "project" and therefore subject to CEQA, each would be covered by the general rule that CEQA applies only to projects that have the potential to cause a significant effect on the environment. (Guidelines Section 15061 (b)(3)). As an organizational or administrative activity or the creation of government funding mechanisms or other government fiscal activities which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment, neither this Resolution nor the Transfer Agreement has the potential to cause a significant effect on the environment and is therefore exempt under this general rule. Further, it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, and thus neither this Resolution nor the Transfer Agreement is subject to CEQA. (Guidelines Section 15061(b)(3)). Section 5. The officers of the City are hereby authorized and directed, jointly and severally, to execute and deliver any and all necessary documents and instruments and to do all things which they may deem necessary or proper in order to consummate the transaction contemplated by, effectuate the purposes of this Resolution and the Transfer Agreement, and any such actions previously taken by such officers are hereby ratified, confirmed and approved. PASSED, APPROVED, and ADOPTED this 29TH day of SEPTEMBER, 2011, by the following vote, to wit: AYES: NOES: ABESENT: ABSTAIN: ATTEST: FINERTY, HARNIK, KROONEN, SPIEGEL, AND BENSON NONE NONE NONE _ 01Mot .31.re.4_talis1110.1.1-1N: RA HELLE D. KLASS N, CITY CLERK) CITY OF PALM DESERT, CALIFORNIA —�� JEAN M BENSON, MM'OR 4 81000-0163\1382914v3.doc f:•lrrlalPaffv I annl IMWl,I,ff ranM4RFRf1I I ITIf1P1¢\City Racn fnr r ifv.Ananry Trancflar. Anraamanf ll-IR f:Ma .'Sd1Qd 71 rfnr