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Home My WebLink AboutRes 591 - Prlim Draft of Initial Recognized Obligation Pymnt SchedulePALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: ADOPTION OF RESOLUTION APPROVAL OF A PRELIMINARY DRAFT OF AN INITIAL RECOGNIZED OBLIGATION PAYMENT SCHEDULE PURSUANT TO THE REQUIREMENTS OF AB X1 26 SUBMITTED BY: Veronica Tapia, Redevelopment Accountant DATE: September 29, 2011 CONTENTS: Resolution No. 591 DRAFT Recognized Obligations Payment Schedule Recommendation Waive further reading and adopt: Resolution No. 591 , a resolution of the Palm Desert Redevelopment Agency approving a draft Recognized Obligation Payment Schedule; Executive Summary On September 8, 2011, the City Council adopted Ordinance 1227, approving participation in the "Alternative Voluntary Redevelopment Program," to make the required payments to the State of California and continue redevelopment activities under AB x1 27. Although the Council has taken this step, due to the current status of the lawsuit filed by the California Redevelopment Association and League of California Cities on behalf of all redevelopment agencies questioning the constitutionality of this legislation, agencies are currently required to perform under the regulations set forth in AB X1 26 "Dissolution of Redevelopment Agencies." As such, the Agency is required to produce a preliminary draft of the Recognized Obligation Payment Schedule by September 30, 2011. Background AB X1 26, which was signed by the Governor of California on June, 29, 2011, added Parts 1.8 and 1.85 to the Community Redevelopment Law. Part 1.8 immediately suspends most redevelopment agency activities and, among other things, prohibits redevelopment agencies from incurring indebtedness or entering into or modifying contracts. Part 1.85 provides that on October 1, 2011, all existing redevelopment agencies and redevelopment agency components of community development agencies are dissolved, and successor agencies are designated as successor entities to the former redevelopment agencies. Part 1.85 imposes numerous requirements on the successor agencies and subjects successor agency actions to the review of oversight boards established under Part 1.85. AB X1 27 was signed by the Governor concurrently with AB X1 26 and added Part 1.9 to G \rda\Veronica Tapia\Word Files\Staff Reports\Recognized Olbigations Payment Schedule SR doc Staff Report Resolution No. 591 Approval of Recognized Obligations Payment Schedule September 29, 2011 Page 2 of 3 the Community Redevelopment Law. Part 1.9 establishes an Alternative Voluntary Redevelopment Program whereby a redevelopment agency will, notwithstanding Parts 1.8 and 1.85, be authorized to continue to exist and carry out the provisions of the Community Redevelopment Law. On September 8, 2011, the City Council adopted Ordinance 1227 opting into the Alternative Voluntary Redevelopment Program agreeing to make specified annual payments to the county auditor -controller for allocation to special districts and educational entities. Section 34169 of Part 1.8 requires an agency to approve a preliminary draft of an initial recognized obligation payment schedule by September 30th. However, Part 1.9 provides that if a city council timely opts into the Alternative Voluntary Redevelopment Program, then the agency will be exempt from the provisions of Parts 1.8 and 1.85. Thus, an agency should only be required to approve a draft recognized obligation payment schedule if the city council has not adopted an opt in ordinance by September 30th. However, the stay issued by the California Supreme Court, discussed below, means all agencies must approve a preliminary draft of a recognized obligation payment schedule by September 30th even if the council has adopted an opt in ordinance. 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 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, 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 partial stay of AB X1 26. With respect to AB X1 26, Part 1.85 was stayed in its entirety, but Part 1.8 (including Health and Safety Code Section 34169) was not stayed. Thus, the requirements of Part 1.8, including the requirement to prepare a preliminary draft of an initial recognized obligation payment schedule, are applicable because the provisions of Part 1.9 which exempts agencies from the provisions of Part 1.8 upon adoption of an opt in ordinance have been stayed. Accordingly, Staff recommends that the Agency Board approve Resolution No. and a preliminary draft of the Recognized Obligation Payment Schedule for the period of January 1, 2011 through June 30, 2011. G \rda\Veronica Tapia\Word Files\Staff Reports\Recognized Olbigations Payment Schedule SR.doc Staff Report Resolution No. 591 September 29, 2011 Page 3 of 3 Fiscal Analysis Approval of Recognized Obligations Payment Schedule Adoption of the ROP Schedule will authorize the Agency to pay its "recognized obligations" between January 1 and June 30, 2012 under AB X1 26. Failure to adopt'the Schedule would prohibit the Agency from making such payments, except for payments required to meet obligations with respect to bonds, should the Agency be required to operate under AB X1 26 as a result of the lawsuit. Dissolving the Redevelopment Agency has extensive immediate and on -going costs relative to the General Fund associated with it including loss of assets, loss of authority of disposition of assets, potential loss of affordable housing assets, loss of certain programmatic funding, loss of annual reimbursement for administrative costs, as well as loss of repayment of the City Advance. Submitted By: eronica Tapia, Redevelopffnent Accountant aul S. Gi son, Director of Finance Approval: Wohlmuth, Executives Director Department Head: cCarthy, ACM for Re e.ielopment BY PLA —° 6 9 ,29- / IFIED 13' / T1 Original on tile with City Clerk's Office G \rda\Veronica Tapia\Word Files\Staff Reports\Recognized Olbigations Payment Schedule SR doc RESOLUTION NO. 591 A RESOLUTION OF THE PALM DESERT REDEVELOPMENT AGENCY APPROVING A PRELIMINARY DRAFT OF AN INITIAL RECOGNIZED OBLIGATION PAYMENT SCHEDULE PURSUANT TO PART 1.8 OF DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE AND TAKING CERTAIN ACTIONS IN CONNECTION THEREWITH RECITALS: A. The Palm Desert Redevelopment Agency (the "Agency") is a redevelopment agency in the City of Palm Desert (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, 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. Health and Safety Code Section 34169 (h), which is set forth in Part 1.8, requires a redevelopment agency to prepare a preliminary draft of an initial recognized obligation payment schedule by no later than September 30, 2011, and provide it to the successor agency, if a successor agency is established pursuant to Part 1.85. The initial recognized obligation payment schedule must set forth the minimum payment amounts and due dates of payments required by enforceable obligations for the six-month period from January 1, 2012 through June 30, 2012. E. AB X1 27 was signed by the Governor of California on June 29, 2011, adding Part 1.9 (commencing with Section 34192) to Division 24 of the California Health and Safety Code. Part 1.9 establishes an Alternative Voluntary Redevelopment Program whereby, notwithstanding the provisions of Part 1.8 and Part 1.85, a redevelopment agency will be G \rda\Veronica Tapia\Word Files\Staff Reports\Agency Resolution Approving a ROPS.docx RESOLUTION NO. 591 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 (with the earliest deadline being October 1, 2011), by the city council of the city which includes that redevelopment agency of an ordinance to comply with Part 1.9. Pursuant to Health and Safety Code Section 34192, if a city participates in the Alternative Voluntary Redevelopment Program and complies with all requirements and obligations contained in Part 1.9, the redevelopment agency in that city will be exempt from Part 1.8 and Part 1.85. F. 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 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, 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 partial stay of AB X1 26. With respect to AB X1 26, Part 1.85 was stayed in its entirety, but Part 1.8 (including Health and Safety Code Section 34169) was not stayed. Accordingly, the Agency desires to approve a preliminary draft of an initial recognized obligation payment schedule. NOW, THEREFORE, THE PALM DESERT REDEVELOPMENT AGENCY 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. This Resolution is adopted pursuant to Health and Safety Code Section 34169. Section 3. The Agency hereby approves the preliminary draft of the initial recognized obligation payment schedule substantially in the form attached as Exhibit A to this Resolution and incorporated herein by reference (the "ROPS"). The Executive Director of the Agency, in consultation with the Agency's legal counsel, may modify the ROPS as the Executive Director or the Agency's legal counsel deems necessary or advisable. Section 4. The Agency Secretary is hereby authorized and directed to transmit a copy of the ROPS to the successor agency designated pursuant to Part 1.85 if a successor agency has been designated. Section 5. The Agency hereby designates the Director of Finance as the official to whom the Department of Finance may make requests for review in connection with the ROPS and who shall provide the Department of Finance with the telephone number and e- mail contact information for the purpose of communicating with the Department of Finance. Section 6. The officers and staff of the Agency are herby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable to effectuate this Resolution, and any such actions previously taken by such officers are hereby ratified and confirmed. -2- G \rda\Veronica Tapia\Word Files\Staff Reports\Agency Resolution Approving a ROPS.docx RESOLUTION NO. 591 Section 7. The approval of the ROPS is not intended and shall not constitute a wavier by the Agency of any rights the Agency 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 8. This Resolution has 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 Agency's environmental guidelines. The Agency has determined that this Resolution is not a "project" for purposes of CEQA, as that term is defined by Guidelines Section 15378, because this Resolution is an organizational or administrative activity that will not result in a direct or indirect physical change in the environment. (Guidelines Section 15378(b) (5)). PASSED, APPROVED and ADOPTED this 29th day of September 29, 2011, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: JEAN M. BENSON, CHAIR ATTEST: RACHELLE D. KLASSEN, SECRETARY PALM DESERT REDEVELOPMENT AGENCY -3- G \rda\Veronica Tapia\Word Files\Staff Reports'Agency Resolution Approving a ROPS docx EXHIBIT A G \rda\Veronica Tapia\Word F Ies\Staff Reports\Agency Resolution Approving a ROPS docx O Co N 0 0 0 .0�. i D 0 d m g S Q N A N N N OOO) O. O O • O O CO t0 y 7 33a0 CD CD = O O W N N v 0 0 Q <z 8 13 1. 3 0 1 0 m d m O O N to N-p' C 0 CO O) Affl m7 3 7 c 0. N 7 N C r O 0 CD v_ o O St 0) a C . 03 G 3 O O 8 °. CD a CO O 3 y 0 r a • y n N S C .71 ' m G. N N O O 2 3 � Do0 FT)) CD cA N fD G O a CD a c v 3 a CD 5-13 , 1) O O N. 6) N 111 CD 0.. a D 0 oa> v t2a a O d CD Qrn Qro. 3 N CD CD Q cp b N CD 0 O 0 7 ) . 'v 07. 3 m a m 1) 9 7 d -i "' J C 3 io 7 CD m N C C. co 3 o m 0) CSD O A w Oa. N (-° 7) N G 5. a CD C CO (D 0) CD 0 3 co cnN .w. W O 0 N d 3 _0 N O) 3 N co 3 iv (a iD A -_ W O r (D 0) O OOD — 3 4A 69 Hi EA EA 3. d N N CD 0a 0 3. _5' (0 7 m (D 8. 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