HomeMy WebLinkAbout2012-01-09 PacketCITY OF UKIAH
CITY COUNCIL AGENDA
Special Meeting
Civic Center Council Chambers
300 Seminary Avenue
Ukiah, CA 95482
January 9, 2012
6:00 p.m.
ROLL CALL
2. NEW BUSINESS
a. Status report on redevelopment issues resulting from the California Supreme Court
decision on AB 1X 26 & 27; Consideration of a Resolution of the City Council of the City of
Ukiah, California, electing to serve as the successor agency to the Community
Redevelopment Agency of the City of Ukiah, pursuant to Part 1.85 of Division 24 of the
California Health and Safety Code; and Consideration of a Resolution of the City Council of
the City of Ukiah. California, electing to retain the housing assets and functions previously
performed by the Redevelopment Agency of the City of Ukiah pursuant to Part 1.85 of
Division 24 of the California Health and Safety Code.
3. PUBLIC COMMENT
4. ADJOURNMENT
Please be advised that the City needs to be notified 24 hours in advance of a meeting if any specific accommodations or
interpreter services are needed in order for you to attend. The City complies with ADA requirements and will attempt to
reasonably accommodate individuals with disabilities upon request.
Materials related to an item on this Agenda submitted to the City Council after distribution of the agenda packet are available for
public inspection at the front counter at the Ukiah Civic Center, 300 Seminary Avenue, Ukiah, CA 95482, during normal business
hours, Monday through Friday, 8:00 am to 5:00 pm
I hereby certify under penalty of perjury under the laws of the State of California that the foregoing agenda was posted on the
bulletin board at the main entrance of the City of Ukiah City Hall, located at 300 Seminary Avenue, Ukiah, California, not less than
24 hours prior to the meeting set forth on_this _agenda.
Dated this 5th day of January, 2012.
Linda Brown, Acting City Clerk
City of Zrkia6
ITEM NO.: 2a
MEETING DATE.
AGENDA SUMMARY REPORT
January 9, 2012
SUBJECT: Status report on redevelopment issues resulting from the California Supreme Court
decision on AB 1X 26 & 27; Consideration of a Resolution of the City Council of the City of Ukiah,
California, electing to serve as the successor agency to the Community Redevelopment Agency of the
City of Ukiah, pursuant to Part 1.85 of Division 24 of the California Health and Safety Code; and
Consideration of a Resolution of the City Council of the City of Ukiah. California, electing to retain the
housing assets and functions previously performed by the Redevelopment Agency of the City of Ukiah
pursuant to Part 1.85 of Division 24 of the California Health and Safety Code.
Background: The Community Redevelopment Agency of the. City of Ukiah ("Agency") was created by
the City Council for the purposes of implementing redevelopment activities in the City. The City
Council adopted the Redevelopment Plan for the Ukiah Redevelopment Project in accordance with the
Community Redevelopment Law (Health and Safety Code § 33000 et seq.) ("CRL"). The Ukiah
Redevelopment Project Area was found to have a significant number of physical and economic
blighting conditions that necessitated adoption of the Redevelopment Plan. The Redevelopment Plan
authorizes the Agency to receive tax increment revenue to pay for programs and projects that address
these conditions consistent with the CRL.
In January, 2011, the Governor announced his intent to eliminate redevelopment agencies as a way to
help balance the State budget. The Legislature then enacted and the Governor signed Assembly Bill
1X 26 ("AB 1X 26") and Assembly Bill 1X 27 ("AB 1X 27"). These bills took effect on June 29, 2011.
AB 1X 26 immediately suspended all new redevelopment activities and incurrence of indebtedness,
and dissolves redevelopment agencies effective October 1, 2011. AB 1X 27 allowed a city or county
that had a redevelopment agency to avoid dissolution by adopting an ordinance agreeing to make
specified payments to reduce the State budget deficit.
Continued on Paae 2
Recommended Action(s):
1. Approve a Resolution of the City Council of the City of Ukiah, California, electing to serve as the
successor agency to the Community Redevelopment Agency of the City of Ukiah, pursuant to Part
1.85 of Division 24 of the California Health and Safety Code;
2. Approve a Resolution of the City Council of the City of Ukiah. California, electing to retain the
housing assets and functions previously performed by the Redevelopment Agency of the City of
Ukiah pursuant to Part 1.85 of Division 24 of the California Health and Safety Code
Alternative Council Option(s): Do not approve resolution(s) and provide direction to Staff.
Citizens advised: N/A
Requested by: N/A
Prepared by: Sage Sangiacomo, Assistant City Manager, Guy Mills, Project and Grant
Administrator and Iris Yang, RDA Legal Specialist
Coordinated with: Jane Chambers, City Manager, David Rapport, City Attorney, and Ian Roth,
Assistant Director of Finance
Attachments: 1. AB 1X 26 Timeline
2. Memo from RDA Legal on Successor Agency
3. Resolution electing to serve as the Successor Agency for the Ukiah RDA
4. Resolution electing to retain the housing assets and functions of the Ukiah RDA
Approved
Chambers, City Manager
Subject: Redevelopment Status Report and Declaration of Successor Agency
Meeting Date: January 9, 2011
Page 2 of 3
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. S194861),
challenging the constitutionality of AB 1X 26 and AB 1X 27 on behalf of cities, counties and
redevelopment agencies and requesting a stay of enforcement. On August 11, 2011, and August 17,
2011, the Supreme Court stayed portions of AB 1X 26, and stayed AB 1X 27 in its entirety during the
pendency of the matter.
On December 29, 2011, the Supreme Court issued its final decision in the aforesaid litigation,
upholding AB 1X 26, invalidating AB 1X 27, and extending all statutory deadlines under AB 1X 26,
essentially dissolving all redevelopment agencies throughout the State effective February 1, 2012. A
summary timeline for the implementation of AB 1X 26 as modified by the Court's decision is included
as Attachment #1.
Discussion: AB 1X 26 provides that the City will be the "successor agency" to the Agency and
responsible for the wind down of the Agency's affairs. The activities of the City, as successor agency,
will be overseen by an oversight board, comprised primarily of representatives of other affected taxing
agencies, until such time as the debts of the Agency are paid off, all Agency assets liquidated and all
property taxes are redirected to local taxing agencies.
AB 1X 26 designates the City as the successor agency, unless the City elects not to serve as
successor agency. The election not to serve as the successor agency must be made by City Council
resolution, and a copy of the resolution must be filed with the County Auditor-Controller by January 13,
2012 (within 15 days of the Supreme Court's decision). Although the City may adopt a resolution
electing to be the successor agency, the City will automatically become the successor agency by
operation of law, unless the City affirmatively elects not to serve as the successor agency by City
Council resolution.
If the City elects not to serve as the successor agency, another local agency (such as the County or
School District) will have the ability to serve as the successor agency and control the wind down of the
Agency's affairs. With regard to housing, the local housing authority or State would assume housing
assets and functions.
The wind down process is likely to be time consuming and complex. There is risk that there will be
disputes over the proper implementation of the wind down process. However, if the City chooses not
to serve as the successor agency, it will have little or no control over the manner in which the existing
obligations and agreements of the Agency are handled during the wind-down process.
The City should also be aware of certain potential risks involved in electing to be the successor
agency, including not receiving reimbursement for administrative costs that exceed the City's budget,
not receiving reimbursement if there are insufficient tax increment funds to cover higher priority costs,
and defending lawsuits brought against the City, as successor agency, at its own cost. However, the
City should also know that pursuant to AB 1X 26, each of these potential risks are subject to the
statutory limitation on successor agency liability to the amount of property tax received by the
successor agency and the value of assets transferred to the successor agency. A detailed memo from
the City/Agency's RDA legal specialist is included as Attachment #2.
Staff has reviewed these potential risks relative to the Ukiah Redevelopment Agency with our legal
advisors. In addition to the prescribed statutory limitations on liability for the successor agency, staff
believes that the tax increment is sufficient to cover enforceable obligations of the Agency. The
obligations and revenue of the Agency were thoroughly examined with the sale of bonds in Fiscal Year
2010-2011 - - - -
Subject: Redevelopment Status Report and Declaration of Successor Agency
Meeting Date: January 9, 2011
Page 3 of 3
Recommended Action: Staff is recommending that the City Council adopt the attached resolutions
electing to serve as the successor agency to the Community Redevelopment Agency of the City and
retain the housing assets and functions. Resolutions are included as Attachments #3 & #4.
Additional meeting(s) will be necessary near the end of January to review/approve the AB 1X 26
enforceable obligation payment schedule (EOPS) and receive appointments by the Mayor to the
Oversight Committee.
Fiscal Impact:
Budgeted FY 11/12 ❑ New Appropriation F-X] Not Applicable 17 Budget Amendment Required
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Attachment #2
Memorandum
To: Jane Chambers
City Manager
City of Ukiah
From: Iris P. Yang
Best Best & Krieger LLP
Date: January 5, 2012
Re: Role of Redevelopment Agency Successor Agency; Advantages and
Disadvantages
BACKGROUND
On June 29, 2011, Governor Jerry Brown signed into law Assembly Bills 1X 26
and 1X 27. AB 1X 26 dissolves all redevelopment agencies in California and places
responsibility for the liquidation of redevelopment assets and payoff of redevelopment agency
debts with a "successor agency." AB 1X 26 statutorily designates the community that created the
redevelopment agency as that redevelopment agency's successor agency, unless the community
expressly elects not to act as successor agency. AB 1X 27, that would have provided
communities with redevelopment agencies the opportunity to voluntarily make "community
remittance" payments to the county and prevent the dissolution of their redevelopment agencies,
was invalidated on December 29, 2011, by the California Supreme Court in its opinion in
California Redevelopment Association, et al. v. Ana Matosantos, et al., Case No. S194861. The
Supreme Court upheld the validity of AB 1 X 26 in the same opinion.
As a result, each community with a redevelopment agency must decide whether
or not to serve as successor agency for liquidation of the assets of its redevelopment agency and
paying off the redevelopment agency's debts. The deadline for adopting a resolution electing not
to serve as successor agency is January 13, 2012. This Memorandum describes the primary role
of the successor agency and the primary advantages and disadvantages of being a successor
agency.
Each community with a redevelopment agency must also decide whether or not to
retain the housing assets and functions previously performed by the redevelopment agency. If the
community elects to retain such housing functions and assets, all rights, powers, duties and
obligations, excluding amounts on deposit in the Low and Moderate Income Housing Fund, shall
be transferred to the community. If the community chooses not to retain such functions and
assets, such functions and assets shall be transferred to a local housing authority in the territorial
jurisdiction of the redevelopment agency, or if no housing authority exists, to the Department of
Housing and Community Development. A discussion of the ramifications of electing to take on
the redevelopment agency's housing functions and assets are beyond the scope of this
Memorandum, but Best Best & Krieger LLP has prepared a separate memorandum discussing
such election.
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82661.00001\7168609.1
SUCCESSOR AGENCY ELECTION
Under AB 1X 26, as of February 1, 2012, each redevelopment agency will be
dissolved and no longer exist. 1, 2 Except for those powers repealed or limited by AB 1 X 26, the
authority and obligations of the community's dissolved redevelopment agency, along with all of
its assets, property, contracts, leases, books and records are transferred to and thereafter vested in
the "successor agency."3
The successor agency is the community that created the redevelopment agency,
unless the community expressly elects not to serve as the successor agency by passing a
resolution making such election and filing a copy of this resolution with the county auditor-
controller no later than January 13, 2012.4
If the community elects not to serve as successor agency, then any city, county,
city and county or special district within the county of the former redevelopment agency may
become the successor agency by adopting a resolution electing to be the successor agency and
submitting the resolution to the county auditor-controller. 5 The first such agency that submits
such a resolution to the county auditor-controller will be the successor agency.6 If no such
agency elects to serve as successor agency, the Governor will appoint three local residents of the
county to serve as a "designated local authority" that will act as a successor agency, until a local
agency elects to become the successor agency.7
SUCCESSOR AGENCY RESPONSIBILITIES
Starting February 1, 2012, successor agencies are required to do all of the
following 8:
Continue to make payments due on redevelopment agency enforceable
obligations (subject to the limitations of Sections 34171(e)(2) and
34177(a));
• Maintain reserves required by redevelopment agency bond documents;
Perform obligations required by redevelopment agency enforceable
obligations;
' Health and Safety Code § 34172(a)(1) provides that redevelopment agencies' dissolution date is October 1, 2011.
In its decision in Matsantos, though, the Supreme Court extended each effective date or deadline for performance of
an obligation in AB 1X 26 occurring prior to May 1, 2012, to take effect four months later, with one exception - that
the deadline for adopting a resolution not to serve as successor agency was extended to 15 days after issuance of the
Supreme Court's opinion instead of four months.
2 All statutory references in this Memorandum are to the Health and Safety Code, unless specifically stated
otherwise.
s 34173(b), 34175(b).
4 341710), 34173.
s § 34173(d)(2).
6 Ibid.
7 § 34173(d)(3).
8 § 34177.
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82661.00001 \7168609.1
• Pay unencumbered balances of redevelopment agency funds to the county
auditor-controller, including the unencumbered balance of the Low and
Moderate Income Housing Fund;
• Dispose of assets of the redevelopment agency as directed by the oversight
board (discussed below);
• Enforce all redevelopment agency rights for the benefit of taxing entities,
including collecting loans, rents, and other revenues due to the
redevelopment agency;
• If the community that created the redevelopment agency so elects, transfer
housing functions and assets to the community, otherwise to a local
housing authority within the territorial jurisdiction of redevelopment
agency, or if a housing authority does not exist, the State Department of
Housing and Community Development;
• Wind down the affairs of the redevelopment agency in accordance with
Sections 34170 through 34191 and the direction of the oversight board;
• Oversee development of properties, until the contracted work has been
completed or the contractual obligations of the redevelopment agency can
be transferred to other parties;
• Prepare a proposed administrative budget and submit it to the oversight
board for approval;
• Provide administrative cost estimates to the county auditor-controller for
each six month fiscal period to be paid from the Redevelopment Property
Tax Trust Fund; and
• Before each six month fiscal period, prepare a "Recognized Obligation
Payment Schedule" setting forth the minimum payment amounts and due
dates of payments required by enforceable obligations during that six
month fiscal period.
The successor agency must also create a "Redevelopment Obligation Retirement
Fund,i9 which is the fund from which the successor agency makes the enforceable obligation
payments of the dissolved redevelopment agency listed in its Recognized Obligation Payment
Schedule. The Redevelopment Obligation Retirement Fund is allocated funds from the
Redevelopment Property Tax Trust Fund, which is created by the county auditor-controller to
receive tax increment revenue otherwise allocable to the dissolved redevelopment agency to be
disbursed to not only the Recognized Obligation Retirement Fund, but also to pay pass through
- - -9 3417.0.5.. -
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82661.00001 \7168609.1
payments, to pay successor agency administrative costs, and to be disbursed to other taxing
entities within the dissolved redevelopment agency's jurisdiction.lo
OVERSIGHT BOARD
The successor agency's activities are subject to review and approval by an
oversight board. The oversight board will be comprised of seven political appointees from
affected local taxing entities and the community, as follows I:
1. One member appointed by the county board of supervisors;
2. One member appointed by the mayor for the city that created the
redevelopment agency. If the county or a joint powers agency formed the
redevelopment agency, then the largest city by acreage in the territorial
jurisdiction of the former redevelopment agency may select one member.
If there are no cities with territory in the project area of the county or
special district's redevelopment agency, the county superintendent of
education may appoint an additional member to represent the public;
One member appointed by the largest special district, by property tax
share, with territory in the territorial jurisdiction off the redevelopment
agency that is eligible to receive property tax revenues pursuant to Section
34188. If there are no eligible special districts within the territorial
jurisdiction of the former redevelopment agency, then the county may
appoint one member to represent the public;
4. One member appointed by the county superintendent of education;
5. One member appointed by the Chancellor of the California Community
Colleges;
6. One member of the public appointed by the county board of supervisors;
and
7. One member representing the employees of the former redevelopment
agency appointed by the mayor or chair of the board of supervisors, as the
case may be, from the recognized employee organization representing the
largest number of former redevelopment agency employees employed by
the successor agency at that time.
Cities that formed redevelopment agencies are responsible for selecting two of the
seven oversight board members, including the member appointed by the mayor and the member
representing the employees of the former redevelopment agency. Regardless of whether the
county formed the redevelopment agency or not, the county is responsible for selecting two of
the seven oversight board members, including one member appointed by the county board of
t0 34172(d), 34183(a).
§ 34179(a)• -
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8266 1. 0000 1\7168609.1
supervisors and one member of the public, and possibly a third member if there are no eligible
special districts. If a county has formed a redevelopment agency, it is responsible for selecting an
additional member representing the employees of the former redevelopment agency. As a result,
the city or county should have multiple representatives looking out for the city or county's
interests, respectively, on the oversight board. This oversight board representation is likely to be
particularly important where the city or county is serving as successor agency, but may also be
important where they do not.
The successor agency must receive approval from the oversight board before
taking any of the following actions 12:
• Establishing new repayment terms for any outstanding loans;
• Refunding of outstanding redevelopment agency debt to provide savings
or avoid debt service spikes. The successor agency is not permitted to
create additional debt or accelerate debt service;
• Setting aside reserves for outstanding redevelopment agency bonds;
• Merging project areas;
• Continuing acceptance of grants or other financial assistance, if the
assistance is conditioned on the provision of matching funds in an amount
greater than five percent;
• If a city or county wishes to retain any property or other assets for future
redevelopment activities, the city or county can reach a compensation
agreement with the other taxing entities to provide them a share of the
value of the property retained. This agreement must also be approved by
the oversight board;
• Establish the Recognized Obligation Payment Schedule;
• Any agreement between the successor agency and the city or county that
formed the redevelopment agency; and
• An agreement of the successor agency to pledge, or enter into an
agreement to pledge property tax revenues.
The oversight board is also required to direct the successor agency to do all of the
following 13:
• Dispose of all assets and property of the former redevelopment agency
that were funded by tax increment. The oversight board may direct the
successor agency to transfer ownership of certain public assets, such as
12 § 34180.
13_§ 3.4181.
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82661.00001 \7168609.1
roads, school buildings, parks and fire stations, to an appropriate public
agency pursuant to any existing agreements relating to the construction or
use of such assets.
• Cease performance under any agreements that do not meet the definition
of "Enforceable Obligations."
• If the community that created the redevelopment agency so elects, transfer
housing functions and assets to the community, otherwise to a local
housing authority within the territorial jurisdiction of the redevelopment
agency, or if a housing authority does not exist, the State Department of
Housing and Community Development.
• Terminate any agreements between the redevelopment agency and any
public entity providing funding for debt service obligations or for the
construction or operation of facilities owned and operated by the public
entity, if the oversight board determines that early termination would be in
the best interest of the taxing entities.
• Determine whether any agreements with private parties should be
terminated or renegotiated to reduce liabilities and increase revenues to the
taxing entities.
ADVANTAGES AND DISADVANTAGES OF ELECTING TO BE THE SUCCESSOR AGENCY
The community that created a redevelopment agency is the successor agency
under AB 1X 26, unless the community chooses not to serve as the successor agency. There may
be some benefit to serving as the successor agency because the community will implement the
wind-down of the redevelopment agency and have some control over that process, albeit under
the oversight board's supervision.
If the community chooses to take on the role of successor agency, though, the
community should be aware that there may be the following risks associated with being the
successor agency: (1) if the community's administrative costs exceed the amount the community
has budgeted for such costs, such amounts may be unreimbursed; (2) if there are insufficient tax
increment funds to cover pass through payments and costs set forth in the Recognized Obligation
Payment Schedule, the community may not receive some or all of the tax increment funds
budgeted to cover administrative costs because administrative costs are a lower priority; (3) if a
lawsuit is brought against the community as successor agency, the community may have to
defend such lawsuit at its own cost. Each of these potential risks are subject to the statutory
limitation on successor agency liability to the amount of property tax the successor agency
receives and the value of assets transferred to the successor agency, all pursuant to AB 1X 26.
Each of these potential risks is discussed in more detail below.
First, the community could incur unreimbursed costs as a result of serving as the
successor agency, if such costs exceed the successor agency's approved budget. The successor
agency is responsible for developing an administrative budget for each upcoming six month
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82661.00001\7168609.1
fiscal period. 14 This budget should include costs of meetings of the oversight board, which the
successor agency is required to fund. 15 The allowable administrative costs to be included in the
budget are limited to five percent of the total property tax allocated to the successor agency for
the 2011-12 fiscal year16, and up to three percent of the property tax allocated to the successor
agency's Recognized Obligation Retirement Fund during each fiscal year thereafter, provided
that if the percentage amount is less than $250,000, the successor agency may spend up to
$250,000 on administrative expenses. 17 However, these amounts are a cap and the administrative
budget is subject to approval by the oversight board. Consequently, the successor agency will be
eligible to receive an amount ranging from a minimum amount of $250,000 (unless a smaller
amount is agreed to by the successor agency) and a maximum of five percent of property tax
allocated to the successor agency in the 2011-12 fiscal year and three percent of the funds
deposited into the Recognized Obligation Retirement Fund every year thereafter.
Additionally, there is a risk that the successor agency will not be distributed
sufficient property tax revenues from the county auditor-controller to cover administrative costs
if there are insufficient tax increment funds to cover higher priority costs. Starting February 1,
2012, the county auditor-controller is required to determine the amount of property taxes that
would have been allocated to the redevelopment agency had the redevelopment agency not been
dissolved. 18 These amounts are placed in the Redevelopment Property Tax Trust Fund at the
county. Prior to each six month fiscal period, the county auditor-controller disburses the funds
for the upcoming six month fiscal period in the following priority 19:
1. To pay any amounts due to other taxing agencies through statutory pass
through payments or under existing pass through agreements;
2. To each successor agency to make the payments listed in its Recognized
Obligation Payment Schedule. This amount is deposited into the successor
agency's Redevelopment Obligation Retirement Fund;
3. To each successor agency to pay its administrative costs as set forth in an
approved budget; and
4. Any money remaining in the Redevelopment Property Tax Trust Fund
shall be distributed to local agencies and school entities in each successor
agency's jurisdiction.
14 § 341770).
" § 34179(c). This § 34179(c) also states that the successor agency's staff is responsible for performing work on
behalf of the oversight board at the oversight board's guidance. Although the language of AB 1X 26 is unclear
whether such costs are reimbursable administrative costs, it is likely that they are.
16 The total property tax allocated to the successor agency includes any amounts the successor agency receives after
oversight board approval in addition to any amounts received by the successor agency as a city, county or other
taxing entity according to normal tax allocation formulas, and prior to deductions for payments pursuant to statutory
pass through payments, pass through agreements or the Low and Moderate Income Housing Fund.
§ 34171(b).
18 § 34182(c)(1).
19 §-34183(a)
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82661.00001 \7168609.1
Because administrative costs are third priority, it is possible that there will not be
sufficient tax increment funds to pay some or all of the successor agency's administrative costs.
If prior to any six month fiscal period, the Controller determines there are insufficient funds to
pay required debt service, the amount of the deficiency shall be deducted first from the money to
otherwise be distributed to local agencies and school entities, then from the money to otherwise
be distributed to the successor agency to pay administrative costs. 20
Finally, if the successor agency is sued as a result of its efforts to wind down the
redevelopment agency, the successor agency could incur costs in defending any such lawsuit,
although the successor agency's liability will be limited to the amount of property tax it receives
and the value of assets transferred to it as successor agency under AB 1X 26.21 There does not
appear to be a clear mechanism for the successor agency to provide the funding necessary to
defend lawsuits. Also, the oversight board has a clear interest in minimizing money allocated to
pay the expenses of the successor agency, in order to increase the amount of property tax
available for distribution to the other taxing agencies. The successor agency could be put in a
position where it is obligated to defend a lawsuit arising from decisions of the oversight board,
without additional funding to pay the costs of defense. However, beyond the attorneys' fees and
other costs of suit, the successor agency will have limited liability pursuant to AB 1X 26.
CONCLUSION
As a result of the decision by the California Supreme Court, every redevelopment
agency in the State must dissolve pursuant to AB IX 26. Communities that created
redevelopment agencies are left with a decision whether to take on the role of successor agency
to the dissolved redevelopment agency, which they will by default, or whether to actively decline
such role by January 13, 2012. If communities decide to take on the role of successor agency,
they will have the benefit of having some control, with oversight board approval, of the
redevelopment agency dissolution process. Communities should also be aware, though, that there
are limited risks involved in electing to be the successor agency, including not receiving
reimbursement for administrative costs that exceed the community's budget, not receiving
reimbursement if there are insufficient tax increment funds to cover higher priority costs, and
defending lawsuits against the community as successor agency at its own cost. However,
communities should also know that pursuant to AB 1X 26, each of these potential risks are
subject to the statutory limitation on successor agency liability to the amount of property tax
received by the successor agency and the value of assets transferred to the successor agency:
If you have any further questions regarding the implementation of AB 1X 26,
please do not hesitate to contact me or any Best Best & Krieger LLP redevelopment attorney.
cc: Sage Sangiacomo, Assistant City Manager, City of Ukiah
Gordon Elton, Finance Director, City of Ukiah
Ian Roth, City of Ukiah
David Rapport, Rapport and Marston
20 § 34183(b).
21 §_34173(e).
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82661.00001\7168609.1
Attachment #3
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UKIAH,
CALIFORNIA, ELECTING TO BECOME THE SUCCESSOR AGENCY TO
THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF
UKIAH PURSUANT TO PART 1.85 OF DIVISION 24 OF THE CALIFORNIA
HEALTH AND SAFETY CODE
WHEREAS, the City Council of the City of Ukiah ("City") approved and adopted the
Redevelopment Plan for the Ukiah Redevelopment Project ("Redevelopment Plan") covering certain
properties within the City (the "Project Area"); and
WHEREAS, the Community Redevelopment Agency of the City of Ukiah ("Agency") has
been engaged in activities to execute and implement the Redevelopment Plan pursuant to the
provisions of the California Community Redevelopment Law (Health and Safety Code § 33000, et
SeMc ("CRL"); and
WHEREAS, since adoption of the Redevelopment Plan, the Agency has undertaken
redevelopment projects in the Project Area to eliminate blight, to improve public facilities and
infrastructure, to renovate and construct affordable housing, and to enter into partnerships with
private industries to create jobs and expand the local economy; and
WHEREAS, as part of the 2011-12 State budget bill, the California Legislature enacted, and
the Governor signed , companion bills AB 1 X 26 and AB 1 X 27, requiring that each redevelopment
agency be dissolved unless the community that created it enacts an ordinance committing it to
making certain payments; and
WHEREAS, 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. S 194861), challenging the constitutionality of AB IX 26 and AB IX 27 on behalf of cities,
counties and redevelopment agencies and requesting a stay of enforcement; and
WHEREAS, on August 11, 2011, and modified on August 17, 2011, the Supreme Court
stayed portions of AB 1X 26, and AB 1X 27 in its entirety during the pendency of the matter; and
WHEREAS, on December 29, 2011, the Supreme Court issued its final decision in the
aforesaid litigation, upholding AB 1X 26, invalidating AB 1X 27, and extending all statutory
deadlines under AB 1 X 26, essentially dissolving all redevelopment agencies throughout the State
effective February 1, 2012; and
WHEREAS, AB 1 X 26 further provides that, upon their dissolution, any property taxes that
would have been allocated to redevelopment agencies will no longer be deemed tax increment, and
1
82661.00001\7168913.1
will be allocated first to successor agencies to make payments on the existing indebtedness of the
dissolved redevelopment agencies, with remaining balances allocated in accordance with applicable
constitutional and statutory provisions; and
WHEREAS, AB 1X 26 provides that successor agencies be designated as successor entities
to the former redevelopment agencies, and provides that, with certain exceptions, all authority,
rights, powers, duties and obligations previously vested with the former redevelopment agencies,
under the CRL, are vested in the successor agencies; and
WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred.
THE CITY COUNCIL OF THE CITY OF UKIAH, CALIFORNIA, DOES HEREBY
RESOLVE AS FOLLOWS:
Section 1. Recitals. The Recitals set forth above are true and correct and incorporated
herein by reference.
Section 2. Election to be Successor Agency. In accordance with Health and Safety
Code Section 34173, and based on the Recitals set forth above, the City Council hereby elects and
determines that the City of Ukiah shall become the "successor agency" to the former Community
Redevelopment Agency of the City of Ukiah. Upon dissolution of the Agency pursuant to Part 1.85
of Division 24 of the California Health and Safety Code, and except as provided under the CRL, all
authority, rights, powers, duties and obligations previously vested with the former Agency, under the
CRL, shall be vested in the City as the successor agency to the Agency.
Section 3. Implementation. The City Council hereby authorizes and directs the City
Manager to take any action and execute any documents necessary to carry out the purposes of this
Resolution, including but not limited to notifying the Mendocino County Auditor-Controller, the
Controller of the State of California, and the California Department of Finance providing notice of
the adoption of this Resolution and the City's election to be the successor agency to the Agency, in
accordance with AB 1X 26.
Section 4. Severability. If any provision of this Resolution or the application thereof to
any person or circumstance is held invalid, such invalidity shall not affect other provisions or
applications of this Resolution which can be given effect without the invalid provision or
application, and to this end the provisions of this Resolution are severable. The City Council hereby
declares that it would have adopted this Resolution irrespective of the invalidity of any particular
portion thereof.
Section 5. Certification. The City Clerk shall certify to the adoption of this Resolution.
Section 6. Effective Date. This Resolution shall become effective upon its adoption.
2
82661.00001\7168913.1
PASSED AND ADOPTED at a regular meeting of the City Council on the day of
January, 2012, by the following vote:
AYES:
NAYS:
ABSENT:
ABSTAIN:
ATTEST:
JoAnne M. Currie, City Clerk
Mary Anne Landis, Mayor
3
82661.00001\7168913.1
Attachment #4
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UKIAH.
CALIFORNIA, ELECTING TO RETAIN THE HOUSING ASSETS AND
FUNCTIONS PREVIOUSLY PERFORMED BY THE REDEVELOPMENT
AGENCY OF THE CITY OF UKIAH PURSUANT TO PART 1.85 OF
DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE
WHEREAS, the City Council of the City of Ukiah ("City") approved and adopted the
Redevelopment Plan for the Ukiah Redevelopment Project ("Redevelopment Plan") covering
certain properties within the City (the "Project Area"); and
WHEREAS, the Redevelopment Agency of the City of Ukiah ("Agency") has been
engaged in activities to execute and implement the Redevelopment Plan pursuant to the
provisions of the California Community Redevelopment Law (Health and Safety Code § 33000,
et seq.) ("CRL"); and
WHEREAS, since adoption of the Redevelopment Plan, the Agency has undertaken
redevelopment projects in the Project Area to eliminate blight, to improve public facilities and
infrastructure, to renovate and construct affordable housing, and to enter into partnerships with
private industries to create jobs and expand the local economy; and
WHEREAS, as part of the 2011-12 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 unless the community that created it enacted an ordinance
committing it to making certain payments; and
WHEREAS, 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. S194861), challenging the constitutionality of AB 1X 26 and AB 1X 27 on
behalf of cities, counties and redevelopment agencies; and
WHEREAS, on December 29, 2011, the Supreme Court issued its final decision in the
aforesaid litigation, upholding AB 1X 26, invalidating AB 1X 27 and extending all statutory
deadlines under AB 1X 26, essentially dissolving all redevelopment agencies throughout the
State effective February 1, 2012; and
WHEREAS, Health and Safety Code section 34176 provides that the city that authorized
the creation of the redevelopment agency may elect to retain the housing assets and functions
perviously performed by the redevelopment agency;
WHEREAS, all other legal prerequisites to the adoption of this Resolution have
occurred.
THE CITY COUNCIL OF THE CITY OF UKIAH CALIFORNIA, DOES
HEREBY RESOLVE AS FOLLOWS:
Section 1. Recitals. The Recitals set forth above are true and correct and
incorporated herein by reference.
82661.00001\7171671.1
Section 2. Election to Retain Housing Assets and Functions. In accordance with
Health and Safety Code Section 34176, and based on the Recitals set forth above, because the
City Council authorized the creation of the Redevelopment Agency of the City of Ukiah, the City
Council hereby elects to retain the housing assets and functions previously performed by the
Redevelopment Agency of the City of Ukiah. Upon dissolution of the Agency pursuant to Part
1.85 of Division 24 of the California Health and Safety Code, and except as provided under the
CRL, all rights, powers, duties and obligations, excluding any amounts on deposit in the
Redevelopment Agency of the City of Ukiah's Low and Moderate Income Housing Fund shall
be transferred to the City of Ukiah
Section 3. Implementation. The City Council hereby authorizes and directs the City
Manager to take any action and execute any documents necessary to carry out the purposes of
this Resolution, including but not limited to, notifying the Mendocino County Auditor-
Controller, the Controller of the State of California, and the California Department of Finance of
the adoption of this Resolution and the transfer of any assets, all in accordance with AB 1X 26.
Section 4. Severability. If any provision of this Resolution or the application thereof
to any person or circumstance is held invalid, such invalidity shall not affect other provisions or
applications of this Resolution which can be given effect without the invalid provision or
application, and to this end the provisions of this Resolution are severable. The City Council
hereby declares that it would have adopted this Resolution irrespective of the invalidity of any
particular portion thereof.
Section 5. Certification. The City Clerk shall certify to the adoption of this
Resolution.
Section 6. Effective Date. This Resolution shall become effective upon its adoption.
PASSED AND ADOPTED at a regular meeting of the City Council on the _ day of
2012, by the following vote:
AYES:
NAYS:
ABSENT:
ABSTAIN:
Mary Anne Landis, Mayor
ATTEST:
JoAnne M. Currie, City Clerk
82661.00001 \7171671.1