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11b Dissolution of the Redevelopment Agency
pRR0Yo o C� h' INCORPORATED 92 h.Vm JU`Y 10, 191 * MEMORANDUM P Q-IFOR�� TO: CITY COUNCIL/REDEVELOPMENT AGENCY BOARD OF DIRECTORS FROM: STEVEN ADAMS, CITY MA AGER/ REDEVELOPMENT AGENCY EXECUTIVE DIRECTOR SUBJECT: CONSIDERATION OF RESOLUTIONS REGARDING DISSOLUTION OF THE REDEVELOPMENT AGENCY AND SUPPORT FOR SB 659 TO DELAY DISSOLUTION (REVISED) DATE: JANUARY 10, 2012 RECOMMENDATION: It is recommended: 1) the City Council adopt a Resolution electing to serve as the Successor Agency of the dissolved Redevelopment Agency (RDA); 2) the City Council adopt a Resolution electing to have the City retain the "housing assets and functions" of the dissolved RDA; 3) the City Council adopt a Resolution declaring the City has not forgiven any loan advance or indebtedness repayments owed to the City by the RDA; 4) the RDA Board of Directors adopt a Resolution declaring the RDA has not forgiven any loan, advance or indebtedness repayments owed to the RDA by a public body; and 5) approve formally supporting SB 659 and authorize the Mayor to send the attached letter on behalf of the City. FINANCIAL IMPACT: Determining the net impact of the loss of the RDA is complex because it is impacted by a number of factors. Staff previously requested the City's redevelopment consultants to prepare an analysis on the financial impact of the potential loss of the RDA when it was first proposed by the Governor. A copy of the analysis is attached. Tax increment revenue would be lost, but the City would receive a portion of the tax increment funds for its share of the property taxes. As a result, the City will lose close to $1.5 million in annual tax increment funds. After deducting current pass- through funds and bond payments, it will result in a loss of close to $1 million annually. The City is expected to receive an increase in property tax funds of close to $140,000 in FY 2012-13. Of the current expenditures, close to $460,000 are for CITY COUNCIL . CONSIDERATION OF RESOLUTIONS REGARDING DISSOLUTION OF THE REDEVELOPMENT AGENCY JANUARY 10, 2012 PAGE 2 ongoing administrative and staffing costs that cannot be eliminated and will need to be charged to other accounts. In addition, the General Fund will have to assume lease payments for the Le Point Street parking lot. Lastly, the State legislation does enable the City to recoup some of its administrative costs associated with implementing the provisions of the legislation. Taking all these items into account, staffs initial projection is that the net ongoing impact on the budget will be in the range of$300,000. BACKGROUND: Two bills were approved last year by the State Legislature, ABX1 26 and ABX1 27, designed to divert redevelopment tax increment funds from redevelopment agencies to the State. The first bill eliminated redevelopment agencies as of October 1, 2011. The second bill exempted any redevelopment agency from elimination if its host city •adopted an ordinance agreeing to make specified payments to benefit schools. In August, the City Council approved an Ordinance to make the payment and maintain the redevelopment agency. Subsequently, the League of California Cities and California Redevelopment Association filed a lawsuit arguing that the legislation violated Proposition 22, which included protections against taking of redevelopment funds by the State. The lawsuit .n was heard by the California' State Supreme Court, which also issued a stay on the '.,, provisions of the legislation until the ruling could be made. On December 29, 2011, the California Supreme Court issued its opinion in CRA v. Matosantos and upheld the validity of AB1x26, the bill that dissolves all the redevelopment agencies in the State, and invalidated AB1x27, the bill that would have allowed .redevelopment agencies to remain in operation by making a payment to assist the state budget.. As a result of the Court's ruling, the dissolution of redevelopment agencies will be effective as of February 1, 2012. A number of actions will be necessary in order to make this transition. ANALYSIS OF ISSUES: City Election to Serve as Successor Agency to Dissolved RDA One of the first actions, to be made by January 13, 2012, is for the City Council to formally determine if it will serve as the "Successor Agency" to the RDA with the responsibility of winding up its affairs, preparing various payment schedules, and taking on the other administrative tasks required. If the City declines, the Successor Agency will be the first other public agency within the boundaries of the RDA (e.g., school district, county, or special district) that notifies the county auditor-controller that it will serve as the Successor Agency. CITY COUNCIL CONSIDERATION OF RESOLUTIONS REGARDING DISSOLUTION OF THE REDEVELOPMENT AGENCY JANUARY 10, 2012 PAGE 3 If the City declines to be the Successor Agency, the City would not be in a position to control the preparation and , contents of the Recognized Obligation Payment Schedule (which is the document that lists the RDA's financial obligations—including outstanding bonds—to be paid from the pool of former tax increment) and would also then not be the entity that would interact with the Oversight Board established by AB1x26 to review and approve actions of the Successor Agency in the RDA dissolution process. Any measure of control by the City of dissolution process would be significantly lessened, if not eliminated, if the City is not the Successor Agency. Moreover, if the City is not the Successor Agency, the City is nonetheless likely to incur administrative costs in dealing with the dissolution of the RDA but then with no means to obtain funds to pay those administrative costs. The public agency, including the City, that acts as the Successor Agency is entitled to receive up to 5% of its former tax increment for Fiscal Year 2011-2012, and up to 3% each year after that, but not less than $250,000 each year, to meet the administrative expenses of serving as the Successor Agency. The Successor Agency's liability for serving in this capacity is expressly limited in AB1x26 [Health & Safety Code Section 34173(e)] to the property tax increment the Successor Agency receives to pay enforceable obligations and the value of any RDA assets transferred to it, so.the City's general funds and other funds are not at risk if the City elects to be the Successor Agency to the dissolved RDA. Staff is therefore recommending the City Council serve as the Successor Agency to the RDA and to adopt the Resolution affirming its decision (the applicable provision of AB1x26 is not clear as to whether such a resolution is needed, so Agency Counsel is recommending its adoption if the Council elects to serve as the Successor Agency). A copy of the adopted Resolution would need to be filed with the County auditor- controller by close of business on January 13, 2012. If the City Council decides to not have the City serve as the Successor Agency, the City Council is required to adopt the Resolution declining to serve as the Successor Agency. Given the impending deadline, an alternate resolution is included as an attachment for action if necessary. City Retention of Housinct Assets and Function of the Former RDA The City Council must also decide whether the City or the County housing authority will be the successor to the "housing assets and functions" of the dissolved RDA. Although AB1x26 does not precisely define the term "housing assets and functions," the law does expressly state that the housing assets do not include the funds currently in the RDA's Low and Moderate Income Housing Fund, but it appears to include land owned by the RDA that was purchased with Low and Moderate Income Housing Funds. CITY COUNCIL CONSIDERATION OF RESOLUTIONS REGARDING DISSOLUTION OF THE REDEVELOPMENT AGENCY JANUARY 10, 2012 PAGE 4 The "Successor Housing Agency," however, is given the right to enforce affordability covenants and take other actions consistent with the former RDA's authority with respect to affordable housing. Staff is recommending the City Council adopt the Resolution presented that states the City elects to retain the RDA housing assets and functions. If the City Council wishes the housing assets and functions be transferred to the County housing authority, an alternate resolution should be adopted, which is included as an attachment. AB 936 Assembly Bill 936, adopted in the last session of the Legislature, became effective January 1, 2012. AB 936 arose out of a controversial decision by the city council in San Diego to waive repayment of a certain loan it had given to its redevelopment agency. The effect of AB 936 was described by the California State Senate as follows: "This bill would require that any time a city, county or RDA forgives a debt of the other; it must adopt a resolution making specified findings. In addition, cities, counties and RDAs are required to adopt a resolution by February 1, 2012, stating whether or not they forgave any loans, advances, or indebtedness between the January 1, 2010, to December 31, 2011, owed by an RDA or a public body. The resolution must be sent to the State Controller." Therefore, AB 936 requires two resolutions to be adopted by February 1, 2012. The first resolution is by the RDA declaring whether the RDA has waived or forgiven any loan it gave to a "public body" (not defined in the law) between January 1, 2010 and December 31, 2011, and if it has to describe the loan recipient, loan terms, and amount forgiven. The second resolution is by the City Council declaring whether it waived or forgave any loans to the RDA during the same time period. Staff has determined that the RDA did not waive or forgive any loan given to a "public body" during that time period (in fact there were no such loans given by the RDA) and has also determined the City did not waive or forgive any loans to the, RDA in that time period. Even though the RDA will be dissolved as of February 1, 2012, the RDA will be operating in the month of January, i.e., during the time period in which the resolutions are required to be adopted. Staff is recommending the RDA Board and City Council each adopt the AB 936 resolutions. Copies of the adopted resolutions are required to be filed with the State Controller within 10 days after their adoption. Pipeline Proiects The RDA has worked to implement a number of creative strategies to make redevelopment and affordable housing projects possible, many of which are under way. As a result, these efforts have presented a number of issues that must be CITY COUNCIL CONSIDERATION OF RESOLUTIONS REGARDING DISSOLUTION OF THE REDEVELOPMENT AGENCY JANUARY 10, 2012 , PAGE 5 resolved. Given the lack of clarity provided by the State legislation, some of the outcomes are known, while other are still being resolved. The RDA has an agreement in place with Peoples' Self Help Housing for the project on Court land Street so staff believes that project will proceed. The agreement for the Habitat for Humanity project on Brisco Road was an interim loan agreement so staff is still working with RDA special counsel to determine how to proceed. The Pearwood property owned by the RDA will likely be required to be sold and proceeds distributed to property tax recipients. The same is likely true for the Faeh Street property. Most disturbing is that it is unlikely that any proceeds will go to repay the funds borrowed from the City Housing In Lieu Fee fund to acquire that property. SB 659 SB 659 has been introduced, which would temporarily postpone the dissolution. The objective of the legislation is to provide time for the League of California Cities and California Redevelopment Association to work with the Governor and Legislature on other legislation that would replace redevelopment in some form. Attached is a fact sheet, proposed letter of support, and form to sign up for the coalition of support. ALTERNATIVES: , The following alternatives are presented for consideration: - Adopt the Resolutions electing to have the City serve as the Successor Agency to the RDA, maintain housing assets and functions, declaring that no RDA debt was forgiven and declaring no City debt was forgiven by the RDA and approve support of SB659; - Adopt alternate Resolutions declining to have the City serve as the Successor Agency and to maintain housing assets and functions; - Delay the two Resolutions required by AB 936 declaring that no debt was forgiven since they are not required until February 1st; or - Provide staff other direction. ADVANTAGES: The recommendations will increase the City's control over selling of RDA assets and will enable the City to be reimbursed for some staff and consultant costs associated with administration of RDA assets, obligations and other ongoing matters. Support for SB 659 may provide an opportunity to maintain some form of redevelopment in the future. DISADVANTAGES: The recommendations will increase staff workload. ENVIRONMENTAL REVIEW: No environmental review is required for this item. CITY COUNCIL CONSIDERATION OF RESOLUTIONS REGARDING DISSOLUTION OF THE REDEVELOPMENT AGENCY JANUARY 10, 2012 PAGE 6 PUBLIC NOTIFICATION AND COMMENTS: The agenda was posted in front of the City Hall on Thursday, January 5, 2012 and on the City's website on Friday, January 6, 2012. Attachments: 1. May 10, 2011 Memorandum from Tierra West on Impact of Elimination of Redevelopment Agencies 2. Alternate City Council Resolution declining to serve as the Successor Agency 3. Alternate City Council Resolution declining to retain housing assets and functions 4. SB 659 Fact Sheet 5. SB 659 Letter of Support 6. SB 659 Coalition Sign-Up Form RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE, CALIFORNIA DETERMINING THAT THE CITY OF ARROYO GRANDE ELECTS TO, AND SHALL, SERVE AS THE SUCCESSOR AGENCY TO THE DISSOLVED REDEVELOPMENT AGENCY OF THE CITY OF ARROYO GRANDE PURSUANT TO HEALTH AND SAFETY CODE SECTION 34173 WHEREAS, the Redevelopment Agency of the City of Arroyo Grande ("Redevelopment Agency") is a public body, corporate and politic, organized and existing under the California Community Redevelopment-Law (Health & Safety Code Section 33000 at seq.); and WHEREAS, the City of Arroyo Grande is a municipal corporation and a general law city of the State of California ("City"); and WHEREAS, on December 29, 2011, the California Supreme Court issued its opinion in the case California Redevelopment Association, at al. v. Ana Matosantos, etc., at al., Case No. S196861, and upheld the validity of Assembly Bill 1x26 ("AB1x26") and invalidated Assembly Bill 1x27; and WHEREAS, the Court's decision results in the implementation of AB1x26 which dissolves all the redevelopment agencies in the-State of California as of February 1, 2012; and WHEREAS, pursuant to 'a provision of AB1x26, codified as Health and Safety Code 'Section 34173(d)(1), the city, in the case of a redevelopment agency of a city, automatically becomes the "Successor Agency" to its dissolved redevelopment agency and is charged with the responsibility of winding up `the affairs of the dissolved redevelopment agency pursuant to AB1x26, unless the city council adopts a resolution electing to not serve as the Successor Agency and thereafter files a copy of such resolution with the county auditor-controller; and . WHEREAS, the California Supreme Court, in Footnote 25 of its opinion, extended to . .January 13, 2012 the deadline for a city to make its decision on whether to decline to be . the Successor Agency to its-dissolved redevelopment agency; and - WHEREAS, the City Council, having considered the matter, has determined, in its legislative discretion, that it is in the best interests of the City for the City to serve as the Successor Agency to the dissolved Redevelopment Agency; and WHEREAS, although pursuant to Health & Safety Code Section 34173(d)(1), the City would automatically became the Successor Agency unless it affirmatively elects to not serve as the Successor Agency by Resolution, the City nonetheless wishes to express its intention to serve as the Successor Agency to the dissolved Redevelopment Agency. • RESOLUTION NO. PAGE 2 NOW, THEREFORE, the City Council of.the City of Arroyo Grande resolves as follows: 1. The foregoing Recitals are true and correct and are incorporated herein. - 2. The City Council of the City of Arroyo Grande hereby affirmatively determines that - the City of Arroyo Grande elects to, and shall, serve as the Successor Agency to the dissolved Redevelopment Agency of the City of Arroyo Grande. 3. The City Manager and his authorized designees are hereby authorized and directed to take such other and further actions and sign such other and further documents as is necessary and proper to implement this Resolution on behalf of the City. 4. The City Clerk shall file a copy of this Resolution with the San Luis Obispo County Auditor-Controller not later than 5:00 p.m. on January 13, 2012. On motion of Council Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: • the foregoing Resolution was passed and adopted,this 10th day of January, 2012. RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: CITY ATTORNEY RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE, CALIFORNIA DETERMINING THAT THE CITY OF ARROYO GRANDE SHALL RETAIN THE HOUSING ASSETS AND FUNCTIONS OF THE DISSOLVED REDEVELOPMENT AGENCY OF THE CITY OF ARROYO . GRANDE PURSUANT TO HEALTH AND SAFETY CODE -SECTION 34176 WHEREAS, the Redevelopment Agency of the City of Arroyo Grande ("Redevelopment Agency") is a public body, corporate and politic, organized and existing under the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.); and WHEREAS, the City of Arroyo Grande is a municipal corporation and a general law city of the State of California ("City"); and WHEREAS, on December 29, 2011, the California Supreme Court issued its opinion in the case California Redevelopment Association, et al. v. Ana Matosantos, etc., at al., Case No. S196861, and upheld the validity of Assembly Bill 1x26 ("AB1x26") and - invalidated Assembly Bill 1x27;"and WHEREAS, the Court's decision results in the implementation of AB1x26 which dissolves all the redevelopment agencies in the State of California as of February 1, 2012; and WHEREAS, pursuant to a provision of AB1x26, codified as Health and Safety Code Section 34176,-the city, in the case of a redevelopment agency of a city, may elect to retain the housing assets and functions of the dissolved redevelopment agency; and WHEREAS, the City Council, having considered the matter, has.determined, in its legislative discretion, that it is in the best interests of the City for the City to retain the housing assets and functions of the dissolved Redevelopment Agency; NOW, THEREFORE, the City Council of the City of Arroyo Grande resolves as follows: 1 The foregoing Recitals are true and correct and are incorporated herein. 2. The City Council of the City of Arroyo Grande hereby determines that the City of - 1 Arroyo Grande shall retain the housing assets and functions of the dissolved Redevelopment Agency of the City of Arroyo Grande. 3. The City Manager and his authorized designees are hereby authorized and directed to take such-other and further actions and sign such o ther and further documents as is necessary and proper to implement this Resolution on behalf of the City. RESOLUTION NO. PAGE 2 On motion of Council '-Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this 10th day of January, 2012. • • RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: CITY ATTORNEY RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE MAKING A DECLARATION UNDER HEALTH AND SAFETY CODE SECTION 33354.8 THAT, DURING THE PERIOD FROM JANUARY 1, 2010, TO DECEMBER 31, 2011, THE CITY HAS NOT FORGIVEN THE REPAYMENT, WHOLLY OR PARTIALLY, OF ANY LOAN, ADVANCE, OR INDEBTEDNESS OWED, TO THE CITY BY THE REDEVELOPMENT AGENCY OF THE CITY OF ARROYO GRANDE WHEREAS, the City of Arroyo Grande ("City") is a municipal corporation and general law city of the State of California; and WHEREAS, the Redevelopment Agency of the City of Arroyo Grande, a public body, corporate and politic ("Agency"), is the redevelopment agency performing redevelopment functions within the territorial limits of the City pursuant to the California Community Redevelopment Law (Health & Safety Code § 33000, et seq.); and WHEREAS, the California Community Redevelopment Law, pursuant to Section 33354.8 of the California Health and Safety Code, requires that the City (a public body) adopt a resolution after January 1, 2012 and prior to February 1, 2012, declaring whether or not it has forgiven, during the period of time commencing January 1, 2010, and ending December 31, 2011, the repayment, wholly or partially, of a loan, advance, or indebtedness that"has been owed to the City by the Agency; and WHEREAS, Section 33354.8 of the California Health and Safety Code also requires that within ten (10) days after the adoption of the resolution, the Agency transmit a copy of the resolution to the California State Controller. • NOW, THEREFORE, the City Council of the City of Arroyo Grande resolves as follows: 1. Based upon the best knowledge of City staff and the City Council, during the period between January 1, 2010, and December 31, 2011, the City has not forgiven the repayment, wholly or partially, of a loan, advance, or indebtedness that has been owed to the City by the Agency. _ 2. Not later than ten (10) days after the adoption of this Resolution, the City Clerk shall transmit a copy of this Resolution to the California State Controller. , On motion of Council Member. , seconded by Council Member , and on the following roll call vote, to wit: AYES: DOES; - - ABSENT: the foregoing Resolution was passed and adopted this 10th day of January, 2012. RESOLUTION NO. PAGE 2 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: TIMOTHY J, CARMEL, CITY ATTORNEY RESOLUTION NO. , A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF ARROYO GRANDE MAKING A DECLARATION UNDER HEALTH AND SAFETY CODE SECTION 33354.8 THAT, DURING THE PERIOD FROM JANUARY 1, 2010, TO DECEMBER 31, 2011, THE AGENCY HAS NOT FORGIVEN THE REPAYMENT, WHOLLY OR PARTIALLY, OF ANY LOAN, ADVANCE, OR INDEBTEDNESS OWED TO THE AGENCY BY A PUBLIC BODY .WHEREAS, the Redevelopment Agency of the City of Arroyo Grande, a public body, corporate and politic ("Agency"), is the redevelopment agency performing redevelopment functions within the territorial limits of the City of Arroyo Grande pursuant to the California Community Redevelopment Law (Health & Safety Code § 33000, et seq.); and - WHEREAS, the City of Arroyo Grande ("City") is a municipal corporation and general law city of the State of California; and , WHEREAS, the California Community Redevelopment Law, pursuant to Section 33354.8 of the California Health and Safety Code, requires that the Agency adopt a resolution after January 1, ,2012 and prior to February 1, 2012, declaring Whether or not it has forgiven, during the period of time commencing January 1, 2010, and ending December 31, 2011, the repayment, wholly or partially,-of a loan, advance, or indebtedness that has been owed to the Agency by a public body; and WHEREAS, Section.33354.8 of the California Health and Safety Code also requires that within ten (10) days after the adoption of the resolution, the Agency transmit a copy of the resolution to the legislative body and the California State Controller. NOW,.THEREFORE, the Redevelopment Agency of the City of Arroyo Grande resolves as follows: 1. Based upon the best knowledge of Agency staff and the Agency Board of Directors, during the period between January 1, 2010, and December 31, 2011, the Agency has not forgiven the repayment, wholly or partially,. of a loan, advance, or indebtedness that has been owed to the Agency by a public body. 2. Not later than ten (10) days after the adoption of this Resolution, the Agency Secretary shall transmit a copy of this Resolution to the City Council of'the City of Arroyo Grande and to the California State Controller. On motion of Agency Board Member , seconded by Agency Board Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this 10th day of January, 2012. • RESOLUTION N_O. PAGE 2 TONY FERRARA, CHAIR - ATTEST: KELLY WETMORE, AGENCY SECRETARY APPROVED AS TO CONTENT: STEVEN ADAMS, EXECUTIVE DIRECTOR APPROVED AS TO FORM: TIMOTHY J, CARMEL, AGENCY COUNSEL 1 ATTACHMENT 1 TIERRAWEST A D V I S O R S Date: , May 10, 2011 To: Steven Adams, City of Arroyo Grande Angela Kraetsch, City of Arroyo Grande From: Tim Mulrenan,Tierra West Advisors Michael Garcia,Tierra West Advisors Subject: Impact of the elimination of redevelopment agencies Pursuant to your request, Tierra West Advisors Inc. ("Tierra West") has analyzed the potential impact of the elimination of redevelopment agencies upon the City of Arroyo Grande. Background As a result of significant budget challenges at the state level, Governor Jerry Brown has proposed a budget for fiscal year 2011-12 that would include the elimination of all redevelopment agencies within the State of California("State"). This proposal would be implemented by two (2) bills being processed by the legislature, Senate bill SB 77 ("SB77") and Assembly bill AB 101 ("AB 101") (combined, the "Bills"). These bills were voted on in the legislature in mid-March 2011, with AB101 missing passage by one (1) vote. The California Redevelopment Association ("CRA") has proposed alternate legislation that would keep the redevelopment agencies in business, but provide for voluntary transfer of a portion of the tax increment funds to schools. This memorandum reviews the larger impacts proposed under AB 101 & SB77 rather than the impacts of the CRA alternative. Impacts ofAB101 &SB77 Passage of the bills and execution by the Governor would put the following changes in place: • Eliminate redevelopment agencies statewide as of July 1, 2011. • Set up successor agencies to wind up the affairs of redevelopment agencies. 2F46 :irt' 7 44(Q E 373122 36:6 ;�l i :'1 i4" tia it rlJ�4 ,.)T RE A EST:VI E REDP/R.OP rlEPxl CO[vSl€=APih) Mr. Steven Adams Ms. Angela Kraetsch May 10, 2011 Page 2 • Provide for the successor agencies to honor existing bonds and other contracts outstanding. • The successor agencies have 60 days to develop an Enforceable Obligation Payment Schedule for the successor agency to honor. • Require the County Auditor-Controllers to perform audits of each redevelopment agency by October 1, 2011 and essentially function as the Treasurer of each successor agency. • Lengthen the Statute of Limitations on redevelopment agency actions approved after January 1, 2011 from 90 days to 2 years. • Limit the activities redevelopment agencies can undertake after January 1, 2011 so as to preserve the assets. • Subject to existing obligations, transfer funds which were formerly considered tax increment revenue to Redevelopment Property Tax Trust Funds ("Trust Funds") at each county, and from there to other taxing agencies. • Allocate a combined $1.7 billion from the Trust Funds to Public Health and Safety Funds ("Health and Safety Funds") at each county, which would reimburse the state for health and trial court services in the respective counties. • The counties would administer these Health and Safety Funds or, if they chose not to, they would not receive the moneys remaining in the Trust Funds. In that event the Directors of Finance would designate different entities to administer the Health and Safety Funds. • Maintain the pass-through payments initially implemented by AB 1290. Allocation of Tax Increment According to documents obtained from the City as well as the San Luis Obispo County Auditor's Office, The Arroyo Grande Redevelopment Agency ("Agency") is expected to collect Net Tax Increment of$1,491,114 for Fiscal Year 2010-11. This figure is before the deductions for the Basic Aid Pass-Through Payment as well as the Tiers 1 and 2 Pass- Through Payments. Of this amount, 20%, or $298,223, will be dedicated for use in the creation and preservation of affordable housing. Additionally,as a taxing entity, the City of Arroyo Grande is permitted to receive 19.87238% of the total pass through amount for tier 1. This figure equates to $59,264 for the 2010-11 fiscal year. Should redevelopment be eliminated and tax increment reverts back to the taxing entities, this same percentage would apply to the total amount of tax increment, not simply the pass through amount. ` TIERRAWEST A D V I S O R S Mr. Steven Adams Ms.Angela Kraetsch May 10,2011 Page 3 The Agency issued a Tax Allocation Bond in 2007 in the amount of $6.285 million. This bond was collateralized by the Agency's tax increment revenue, which would not be disturbed by the pending legislation. The bond requires annual debt service payments of approximately$457,000. If the Bills were passed such that they were to take effect in their present form, the Agency would cease to exist as of July 1, 2011. The successor agency would be provided the revenue to honor the 2007 bonds and funds to honor any other outstanding contractual commitments. As of the date of this memorandum the only outstanding contractual commitment is the architectural contract in the amount of$160,000 for the design of the new police department building. The Agency is working with Habitat for Humanity for the development of a new affordable housing project. So far the Agency has loaned Habitat funds which Habitat has used to purchase the land for the project. For this analysis Tierra West has assumed that neither the City nor the Agency would provide any additional funds to Habitat, Habitat would develop the project with funds from other sources, and neither the City nor the Agency would receive a repayment on the Habitat loan. Exhibit A to this report indicates Tierra West's estimate of the property tax income that the City and Agency were to receive over the next 20 years if the Agency were to remain in place under the current conditions. This estimate is that the combined funds for fiscal year 2011-12 would come to $1,420,114. Of this, $456,816 would be required to service the 2007 bond, leaving the City $963,298 in both general fund revenue and Agency tax increment from property taxes. By comparison, Exhibit B indicates the revenue that would accrue to the City if the Agency were eliminated. In that case the City would collect $893,118 in property tax income, from which $456,816 would be required to service the bonds, leaving $436,302 in net property tax income. Exhibits C & D provide Tierra West's estimate of tax increment revenue over the next 20 years with and without the Agency. Tierra West has assumed that the Basic Aid payments to the school districts would remain in place under its current format, as well as the pass through payments required under AB1290. The language of AB 101 retains the AB1290 payments under the current formulas, so these pass throughs don't change. Tierra West has assumed that the City will receive 19.8% of the base year property tax collections as well as the tier 1 pass through payments under the AB1290 pass throughs. The City does not collect v TIERRAWEST A D V I S O R S t Mr. Steven Adams Ms.Angela Kraetsch May 10, 2011 Page 4 a share of the tier 2 or tier 3 payments. Therefore, Tierra West is assuming that the City's revenue from the base year and AB 1290 pass throughs will not change. The difference occurs by taking the Agency out of the distribution of tax increment. In fiscal year 2011-12 Tierra West estimates that the tax increment available to the Agency after all pass throughs would be $1,114,512. After deducting the bond payments of $456,816 the Agency would have$657,696 available in both housing and non-housing funds. . Tierra West's estimate of the annual debt service required by the bond is indicated in Exhibit E. Tierra West reviewed the Merrill Lynch Final Official Statement in arriving at this amortization schedule. With the Agency eliminated, the $657,696 net remaining in tax increment funds would be distributed among the taxing agencies. The City's share of this would be 19.87238%, which would provide $130,700 to the City's general fund for fiscal year 2011-12. This amount increases to $137,724 in fiscal year 2012-13. As of the date of this memorandum neither SB77 nor AB101 have passed. The Bills may or may be passed in the legislature, and, if they are passed, there may be changes in the requirements that Tierra West is basing its estimates on. The versions Tierra West has been reviewing were last modified March 15th, 2011. The requirements of SB77 and AB 101 will need to be harmonized to arrive at any final law ultimately signed by the Governor. Summary • The state legislature has considered SB77 and AB101 in the current session, which, if passed and signed by the Governor,would eliminate redevelopment agencies. • AB101 was brought up for a vote in mid-March and missed passage by 1 vote. • If AB101 were to pass, and to take effect for fiscal year 2011-12,the funds available to the City and Agency would be reduced by approximately $526,996 in 2011-12 from what would be received if the Agency were to remain in place. • On the City general fund account, the City would receive its share of the tax increment that would have otherwise gone to the Agency. Tierra West estimates this amount to be approximately$130,700 for fiscal year 2011-12. Thank you for the opportunity to review this issue on your behalf. ` TIERRAWEST A D V I S O R S FCity of Arroyo Grande share of property tax revenue I --1 - With Redevelopment - , . ' City Share City Share I Net ! Agency Agency+ i ' of Base of Pass- 1 Total City Agency ; Agency non- I City Bond Net Fiscal Year 1 Year 3 thrus i Revenue Increment 1 Housing 1 housing Revenue 1 Payments j Available .. �. _ ? m_. ..._...wM.. 2009-2010 i $245,145 $58,457 $303602$1,091954 $294,161$97,793 $1,395,556 $367,651 $1,027,905 2010-2011 / ? $245,145 $59,2644_$304,409 $1,099,611 $298,223 $801,388 1$1,404,0220_ $457,120 $946,900_ '2011-2012 I $245,145 ' $60,457 I $305602, $1114512 ! $304,227 $810,285 ;$1,420,114 $456,816 $963,298 . 2012-2013 ,$245,145 I $62,647 ' $307,792 '$1,149,288 = $315,246' $834,042•1$1,457,080 ` $456,247 ` $1,000,833 2013-2014 $245,145 $64,880 I$310,025 $1,184 761 $326,486 $858,275 $1494,786 $455,413 $1,039,373 373 2014-2015 $245,145 I $67,159 w $312,304 $1,220,943 $337,950 $882,994 $1,533,247 , $454,313 $1,078,934 , 20_15-2016 $245,145 $69,482-' $314,627 $1,257,851 t $349,643 $908,207 $1,572,478 $457948 t $1,114,530 2016-2017 1 $245,145 , $71,853 1 $316,998 $1,295,497 I mm$361,570 1 $933,926_$1,612,494 I $456,053 1 $1,156,441 ' 2017-2018 ' $245,145 I $74,270 F $319,415 $1,333,897 ' $373,736 $960,161 $1,653,312 $453,893 1 '$1,199,419 2' 018-2019 $245,145 ' $76,736 I $321,881 $1,373,066 € $386,145 $986,920 :$1,694,947 ' $456,467 € $1,238,480 2019-2020 1 $245,145 = $79,252 I $324,397 '$1,413,019 $398,803 1$1,014,216 $1,737;415 $453,511 L$1,283,904 - ' 2020-2021 $245,145 ; � W Y $81,817 I $326,962 $1,453,771 $411,713 ?$1,042,058 $1,780,734 _ $455,290 , $1,325,444 2021-2022 $245,1451 $84,434 $329,579 $1,495,340 I $424,882 1$1,070,458 '$1,824,919 $455,720 I $1,369,199 2022-2023 ' $245,145 ;- $87, 1,.. 1 103 $332248 $1537,741 $438,314 $1,099;427 1$1,869,990 $455,570 $1,414,420 2023-2024 ; , $245,145 i $89,826 ' _$334,_971 $1,580,991 , $452,014 ;$1,128,977 $1,962 $454,840 , $1,461,122 m _.... _ ..__ ._.__ _ _. _ _ 2024-2025 ; f j__$245,145 $92,6031 $337,748 $1,625,107 ` $465,989 1$1,159,118 1$1,962,855 I $453,530 I $1,509,325 2025-2026 I { $245,145 $95,436 $340,S81 $1,670,106 ' $480,243 '$1,189,862 862 =ta$2,010,686 11 $456,640 $1,554,046. 2026-2027 _..._.w,..,*- _ i t $245,145 $98,325 $343,470 $1,716,005 $494,782 !$1,221,223 $2,059,475 $453,880 $1,605,595 2027-2028 1 $245,145 $101,272 ; $346,417 $1,754,519 $509,613 $1,244,9061$2,100,9361 $455,540 i $1,64_5,396 2028-2029 '$245,145 $104,278.,1 $349,423-$1,793,804_I $524,739 $1,269,065 1$2,143,227 $456,3304 $1,686,897 2029-2030 , 1 $245,145 I $107,344 ' $352,489 $1,833,875 4_-$540,168I$1,293 707 I$2,186,364 I $456,250 $1,730,114 2030-2031 ; I $245,145 $110,472 I $355,617 $1,874,749 I $555,906 '$1,318,843 ;$2,230,365 I $455,300 I $1,775,065 ' 1 _ _. _.. ._..',. .., ,._,. _�... _ .. _._._..._ . _tt_44. T I E R R A W E S T 1 _ .,.µ .. 04/21/11. . ._._. ' A D V I S O R S Tierra WestAdvisors,Inc. 2 27 PM ,_ ._w... ._ F « EXHIBIT B T +City of Arroyo Grande share of property tax revenue i _ _._ ' Without Redevelopment • , City Share of i Difference 1 ;City Share of!City Share of' Bond 1 balance of Total City Total Agency Agency+City Bond Net due to AB101 Fiscal Year Base Year 1 Pass-thrus Obligations 1 increment • Revenue I revenue Revenue Payments Available *5677 � 1 3 t 2009-2010 2-01072011 I I 2011-2012 $245,145 I $60,457 $456,816 I $130,700 $893,118 ; $0 ' $893,118 ($456,816)11 $436,302 ($526,996) 1 I 2012-2013 i $245,145 = $62,647 f $456 ,247 $1_37,724 $901,763 m ymm $0 1 $901,763 ($4516,247) mm$445,516 ($555,317) Mm m m 2013-2014 r $245,145 1 _ $64,880 ., $455,413 , $144,939 $910,377 1 $0 $910,377 ($455,413)(= $454,964 ($584,409) 2014-2015 $245,145 ` $67,159 1 $454,313 1 $152,348 $918,964 : $0 $918,964 ($454,313)1 $464,651 ($614,283) , 2015-2016 $245,145 i $69,482 ' $457,948 1 $158,960 $931,535 1 $0 $931,535 1($457,948), $473,587 ($640,943) 2016-2017 $245,145_. $71,853 1_., $456,053r $166,817 $939,868 ' µV+ Aµµ $0 $939,868 ($456,053)_ $483,815 ($672,626) 2017-2018 $245,145 1 $74,270. $453,893 , $174,878 $948,186 ( $0 $948,186 ($453,893)1 $494,293 ($705,126) I 2018-2019 $245,145 $76,736 i $456,467 $182,150 $960,498 1 $0 $960,498 ' ($456,467)1 $504,031 ($734,448) � ' 2019-2020 $245,145 ' $79,252 $453,511 1 $190,677 ; $968,585 ; $0 $968,585 j ($453,511): $515,073 ($768,830) 2020-2021_ $245,1451_,.. $81,817? $455,290 $198,422 ; $980,674I $0 $980,6741 ($455,290)1 $525,384 ($800,059) l ; 2021-2022 5245,145 1 $84,434 $455,720 $206,597 1 $991,896 $0 ' $991,896 '($455,720) $536,176 ($833,023) 2022-2023 i $245,14 $87,103 $455,570 $215,053 ) $1,002,871 $0 :, $1,002,871 j ($455,570) $547,301 ($867,118) w.,..._.I 2023-2024 $245,145 ' $89,826 1 $454,840 I $223,793 1 $1,013,604 $0 $1,013,604 ($454,840) $558,764 ($902,358) 2024-2025 $245,145 : $92,603 1 $453,530 I $232,820 1 $1,024,098 ; $0 $1,024,098 ($453,530) $570,568 ($938,757) 2025-2026 $245,145 $95,436 1 $456,640 s $241,144 1,= $1,038,365 $0 $1,038,365 ($456,640) $581,725 ($972,321) 2026-2027 $245,145 $98,325 $453,880 $250,814 $1,048,164 $0 $1,048,164 ($453,880)! $59-4,284---($1,011,311) I 2027-2028 $245,145 $101,272 r $455,540 1 $258,138 L$1,060,0955 $0 :_$1,0_60_,p_954_($4_5__5,54,_0)1__$_6__04,55_5_ ($1,041841) _ 2028-2029 _ $245,145 1 $104,278 ? -$456,330 $265,788 ; $1-,071-,5411__-___ $0 $1,071,541 i ($456,330); $615,211 ($1,071,686) 2029-2030 $245,145 $107,344 i _$456,250 f _ $273,767 1 $1,082 506 $0 $1,082,506 1 ($456,250)1 $626,256 ($1,103,858) 2030-2031 $245,1451 $110,4721 $455,3001 $282,078 I $1,092,995 I $0 1 $1,092,9951 ($455,300)1 $637,695 ($1,137,370) _ _ [ 1 ($16,481,681) Total Difference over 20 years 1 I I = ! € ($9,170,155) Present Value @� 5.50% I .mw4 I Tierra West Advisors,Inc. 1 ; = 04/21/11 2.27 PM 1 _ _ Alill TIERRAWEST A D V I S O R S I EXHIBIT C Arroyo Grande Tax Increment projections with_redevelopment agency 1.38% f Total Adj. Basic Aid £ City amount Gross Value Tier 1 Pass 1 Tier 2 Pass 1 Tier 3 Pass Total Pass Net I Cumulative Value Tax Pass ; Housing of pass Increment 1-Increment , Through = Through ( Through Throughs Increment Increment !Year i Through 1 , through }} !Base Year $123,359,666 , 1 20092010 $265,139,107 $141,779,441 $1,470,805] $43,407 $294,1611 $41,283 mmµµ$0, $378,851 $1,091,954! $1,091,954*_ $294,161 $58,457_ ;2010-2011 1 t---m$270,071,944 $146,712,2781 $1,491,114 $43,709_ $298,2231 $49,5711 $0r $391,5031 $1,099,6111 $2,191,565 $298,223 $59,264 §2011-2012 _ $275,473,3831 $152,113,717€ $1,521,1374 $43,753 $304,227L $58,6451 $0 $406,6251 $1,114,512; $3,306,0771 $304,227 $60,457_ €2012-2013 $280,982,8511 $157,623,185; _ $1,576,2321 $43,796 $315,246€ _ $67,9011 $0 $426,944! $1,149,2881,-- $4,455,3651 $315,246' $62,64T 12013-2014 $286,602,508 _$163,242,842' $1,632,428` $43,8401 $326,4861 $77,3421 $0 $447,6681 $1,184,7611 $5,640,126 $326,486° $64,880 120142015 $292,334,558 $168,974,892; $1,689,749! ..$43,884 $337,9501 $86,9721 $0 $468,8061 ' $1,220,943; $6,861,070 $337,950 $67,159 32015-2016 $298,181,249 $174,821,583, $1,748,216;uw_ $43,928 $349,643; $96,794 $0 m$490,365/ $1,257,8518 $8,118,920_ $349,643 $69,482 '2016-2017 $304,144,874; $180,785,2084 $1,807,852; $43,972 $361,570; $106,813 $0 $512,355! $1,295,497{ _ $9,414,4171__ $361,570 $71,853 12017-2018 _ $310,227,7711 $186,868,1051 $1,868,681 $44,016 $373,736; $117,032 $0 $534,7841 $1,333,897; $10,748,3141 $373,736, $74,270 2018-2019 1 $316,432,327 $193,072,6611 $1,930,727 $44,060 $386,1451 $127,456 $0 $557,661; $1,373,066, rr$12,1213791 $386,145 86,14 $76,736 ;2019-2020- 019 2020 $322,760,9731 $199,401,307; $1,994,013, $44,104 $398,8 $138,088 $0 M $580,995 mmw$1,413,019 $13,534,398 Mry $398,803 W W $79,252 =2020-2021 € $329,216,193;_$205,856,527; $2,058,565, $44,148 $411,7131 $148,9331 $0 $604,794 $1,453,7711 $14,988,1691 $411,713 $81,817 12021-2022 $335,800,517. $212,440,8511 $2,124,4094 $44,192 $424,8821 $159,994; $0 $629,068; $1,495,340. $16,483,5091 $424,882 $84,434 12022-2023 $341516,5271 $219,156,8611 $2,191,569; , $44,236 $438,3141 $171,277' $0' $653,8271 $1,537,7411 $18,021,2501 $438,314, $87,103 12023-2024 1 $349,366,857 $226,007,191' $2,260,074, $44,281 $452,014L $182,786, $0 $679,0811 $1,580,991 $19,602,241; $452,014 $89,826, 20242025 1 $356,354,1951 $232,994,5291 $2,329,945! _w$44,325 $465,98_91 $194,525^A $0 $704,83_9, $1,625,107 $21,227,3481 $465,989M $92,603 12025-2026 $363,4-81,2781:- 363 4812781 $240,121,6121 $2,401,21_6, $4_4,369 $480,2431 $2_0_6,498 $0 $731,1111 $1,670,106 $22,897,454-r1 w$480,243 $95,436 12026-2027 _ 1 $370,750,904 $247,391,2381 $2,473,912 -�$44,414 _ $494,782j $218,7111 $0 $757,907£ $1,716,005 $24,613,4591 _ $494,782 $98,325 2027-2028 € $378,165,9224 $254,806,2561 $2,548,063 $44,458 $509,6131 $231,168; $8,305, $793,5441 $1,754,5191 $26,367,978, $509,613 $101,272 12028-2029 ^ $385,729,2414 $262,369,5751 $2,623,696, ._. $44,5O2_ $524,7391 $243,8751 $16,776' $829,8921, $1,793,804€ $28,161,782! $524,739'$104,278 12029-2030 ' $393,443,825 1 $270,084,1591 $2,700,8421 $44,547: $540,168$256,835J $25,416, Wy $866,967= $1,833,875 $29,995,6571 $540,168, $107,344 12030-2031 1 $401,312,702; $277,953,0361 $2,779,5301 $44,592 $555,9061__ $270,0551 $34,229 $904,7821 $1,874,7491 $31,870,4051 $555,906 $110,472 TIERRAWEST A D V I S O R S EXHIBIT D Arroyo Grande Tax Increment projections without redevelopment agency�L � i ._ _ ... _.{ 0.1987237741 _�.__. .._ _.... . _ _ � , �_�._..__ ....._ City Share of net 3 Net increment € City Share of Total Adj.Tax 1 Total Pass 1 City Share of = 2007 TAB debt increment to City after i Base YearTax Net Increment Increment 1 Throughs I Pass Throughs Revenue F service (including bond . bond debt 1Year 1 1 debt service) service ' ¥Base Year _ _,. _.... .......... ._ �. ,�. _ ... '2009-2010 _ $1,470,8051 $376,885 $58 _ _ � � ,457; $245,145 $1093,920 $367,651- 12010-2011 $1,491,114 $389,142 $59,264. $245,145 $1,101,9721 $457,1201 _ µ _N ; 12011-2012 $1,521,137 $406,6251 $60,457€ $245,145 $1,114,512 $456,816_1 $587,516 $130,70_0` I2012-2013 „ $1,576,232 $426,944; VN 647 _51___ _ 149,288 $456,247i $593,971 .,.. $137,7241 $62,647; $245,145 $1, 2013-2014 _.I $1,632,4281 $447,6681 $64,880 $245,1451 $1,184,761 $455,4131 ; �$600,352 $144,9391 12014-2015 $1,689,749 $468,806; $67,159 $245,1454 $1,220,943 $454,313` $606,661 $152,348 2015-2016 $1,748,216 $490,365! $69,4821 $245,145 $1,257,851; $457,948 $616,908 $158,960, 20162017 $1,807,8521 $512,355 $71,853 $245,1451 $1,295,497' $456,053 $_622,871 $166,8171 12017-2018 $1,868,6811 $534,784µµ $74,27011_ $245,1451 $1,333,897[N WW $453,893 $628,771 _ $174,878= 12018-2019 $1930,727 $557,6611 $76,736L $245,145 $1,373,066 $456,4671 $638,617 $182,1501 12019-2020 $1,994,013 $580,995! $79,2521 $245,145 $1,413,019 $453,5111 $644,188 $190,6771 2020-2021 $2,058,565 $604,794 $81,817 $245,145 $1,453,771 $455,2901 $653,712 $198,4221 2021-2022 $2,124,409. $629,0681 $84,434 $245,145 $1,495,340 $455,720; $662,317 $206,597= 2022_2023 $2,191,569 $653,8271 $87,1031 $245,145 $1,537,741 $455,5701 $670,623' $215,0531 12023-2024 Ny M$2,260,072 $679,O81 µ $89,826 mmm $245,145 $1,580,991 $454,840 $678,633! $223,793, 2024-2025 $2,329,945 _ $704,8391_______$92,603; $245,145 $1,625,107= $453,530 $686,350' $232,820 k. 1 . 2025-2026 1 $2,401,216 a $731,1111 $95,436, $245,1451 $1,670,1064 $456,6401 $697,784 $241,144 ;2026-2027 $2,473,9121 $757,907= $98,325; - $245,145' T,M$1,716,005Rm_ $453,8801 $704,694° $250,814[ '2027-2028_ $2,548,063;1 $793,5441 $ 2721 145 $1, 1 $245, 754,519; $455,540; $713,678 $258,138° ... .__�..� � .., _.� . ..___.� � ...x�..._�_ 101,~___1,-.__...__...___��__ , .._.__._.�_.��_._...M.�_..._ ..._„�._�.�_..�,...,..__,_... __-__.V._._.�____._ �.,.�_�,...-; 12028-2029 $2,623,696 $829,8921 $104,2784 $245,145; $1,793,8041 $456,3301 $722,118 $265,7881 1_2029-2030 $2,700,842 $866,9671 xµAm $107,344# $245,1451 $1,833,875wM� $456,250; $730,017 $273,7671 2030-2031 i $2,779,530; $904,7824 $110,472 $245,1451 $1,874,7491 $455,3001 $737,378 $282,078 Allill A D V I S O R S EXHIBIT E .2007 Arroyo Grande Tax Allocation Bond Amortization ; ' { ' Interest rate ' 5.3040% Interest rate 5.8000%1 Sept 1,2019 Term Bond I Sept 1,2037 Term Bond E -.__._ Combined Year Balance(BOP) Interest Principal Total Balance(BOP) Interest Principal Total Balance(BOP) Interest IPrincipal . Total Base Year ,_... .w _ _ .. 20_0_9-2010 $1,270,000_ $67,361 rn $10,000 $77,361 $5,005,000 $290,290 mm$0 $290,290 $6,275,000 , $357,651 I $10,000 $367,651 2010-2011 $1,260,000 $66,830) $100,000 $166,830 $5,005,000 $290,290 __ _ $0 $290,290 $6,265,000 $357,120_= $100,000 $457,120 2011-2012 $1,160,000 $61,526 ; $105,000 $166,526 $5,005,00_0 $290,290 , $0 i $290,290 _$6,165,000 i $351,816L __$105,000 $456,816 2012-2013 $1,055,000 ' $55,957 a $110,000 , __$165,957 $5,005,000 $290,290T MV $0 svµ $290,290 $6,060,000 $346,247 $110,000 .___ $456,247 2013-2014 $945,000 , $50,123 I $115,000 , $165,123 $5,005,000 $290,290 ; $0 l $290,290 $5,950,000, $340,413 $115,000 , $455,413 2014-2015 $83O,000µ $44,023 t $120,000 1 $164,023_ $5,005,000 $290,290 I $0 I $290,290 $5,835,000 1 $334,313 i $120,000 $454,313 2015-2016 $710,000 $37,658; $130,000 $167,658 $5,005,000 ' $290,290 1 $0 1 $290,290 $5,715,000 L $327,948 R $130,000 , $457,948 2016-2017 $580,000 _ _ $30,763 1 $135,000 I $16_5,763 $5,005,000 $290,290 1__ $0 ; $290,290 $5,585,000 I $321,053 I $135,000 $456,053 2017-2018 $445,000 _ $23,603! $140,000 I $163,603 $5,005,000 _ $290,290 g $0 $290,290 $5,450,000; _ _ $313,893 W$140,000 $453,893 2018-2019 $305,000; $16,177 1 $150,000 I $166,177 $5,005,000 $290,290 $0 $290,290 $5,310,000 $306,467 1 $150,000 ' _ $456,467 2019-2020 $155,000 $8,221 1 $155,000 I $163,221 $5,005,000 $290,290 I $0 $290,290 $5,160,000 1 $298,511 i $155,000 , $453,511 2020 2021 $5,005,0_00 mm$290,290; $165,000 $455,290 $5,005,000 I $290,290 $165,000 $455,290 2021-2022 I $4,840,000 $280,720 1__, $175,000 $455,720 $4,840,000 , $280,720 . $175,000 $455,720 2022-2023 $4,665,00_0 $270,570_' $185,000 1 $455,570 $4,66_5,000 ' $270,570 1 $185,000 $455,570 2023-2024--_. .. .._�. __ .__ v ---- _ _~$4,480,000 $259,840V1µ _ $195,000 II -$454;8-40- $4,480,000 i $259,840-1- $195,000--$454,8-4-0 2024-2025 __ $4,285,000 $248,530 1 $205,000 a _$453,530 $4,285,000 ; $248,530 $205,000 $453,530 2025-2026 „,_ _ $4,080,000 ' $236,640 $220,0001 $456,640 $4,080,000 , $236,640 = $220,000 ' $456,640 2026-2027 .�._...._,.�. _ $3,860,000 $223,880 F $230,x $453,880 $3,860,000 $223,880 ' $230,000 $453,880 2027-2028 _.__. $3 630,000 $210,540 I $245,000 $455,540 $3,630,000 1 $210,540 $245000 $455,540 2028-2029 _,. $3,385,000 $196,330 Ii. $260,000 t $456,330 $3,385,000 E $196,330 $260,000 $456,330 2029-2030 _ $3,125,000 $181,250 I $275,000 1 $456,250 $3,125,000` $181,250 j $275,000 $456,250 2030-2031 ; $2,850,000 $165,300 1 $290,000 I $455,300 $2,850,000 I $165,300 I $290,000 , $455,300 TIERRAWEST A D V I S O R S ATTACHMENT 2 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE, CALIFORNIA DETERMINING THAT THE CITY OF ARROYO GRANDE DECLINES TO, AND SHALL NOT, SERVE AS THE SUCCESSOR AGENCY TO THE DISSOLVED REDEVELOPMENT AGENCY OF THE CITY OF ARROYO GRANDE PURSUANT TO HEALTH AND SAFETY CODE SECTION 34173 WHEREAS, the Redevelopment Agency of the City of Arroyo Grande ("Redevelopment Agency") is a public body, corporate and politic, organized and existing under the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.); and WHEREAS, the City of Arroyo Grande is a municipal corporation and a general law city of the State of California ("City"); and , WHEREAS, on December 29, 2011, the California Supreme Court issued its opinion in the case California Redevelopment Association, et al. v. Ana Matosantos, etc., et a/.,' Case No. S196861, and upheld the validity of Assembly Bill 1x26 ("AB1x26") and invalidated Assembly Bill 1x27; and WHEREAS, the Court's decision results in the implementation of. AB1x26' which dissolves all the redevelopment agencies in the State of California as of February 1, 2012; and WHEREAS, pursuant to a provision of AB1x26, codified as Health and Safety Code Section 34173(d)(1), the city, in the case of a redevelopment agency of a city, automatically becomes the "Successor Agency" to its dissolved redevelopment agency and is charged with the responsibility of winding up the affairs of the dissolved redevelopment agency pursuant to AB1x26, unless the city council adopts a resolution electing to not serve as the Successor Agency and thereafter'files a copy of such resolution with the county auditor-controller; and WHEREAS, the California Supreme Court, in Footnote 25 of its opinion, extended to January 13, 2012 the deadline for a city to make its decision on whether to decline to be the Successor Agency to its dissolved redevelopment agency; and WHEREAS, the City Council, having considered the matter, has determined, in its legislative discretion, that it is in the best interests of the City for the City to NOT serve as the Successor Agency to the dissolved Redevelopment Agency; NOW, THEREFORE, the City Council of the City of Arroyo Grande resolves as follows: 1. The foregoing Recitals are true and correct and are incorporated herein. RESOLUTION NO. . PAGE 2 2. The City Council of the City of Arroyo Grande hereby determines that the City of Arroyo Grande declines to, and shall not, serve as the Successor Agency to the dissolved Redevelopment Agency of the City of Arroyo Grande. 3. The City Manager and his authorized designees are hereby authorized and directed to take such other and further actions and sign such other and further documents as is necessary and proper to implement this Resolution on behalf of the City. 4. The City Clerk shall file a copy of this Resolution with the San Luis Obispo County Auditor-Controller not later than 5:00 p.m. on January 13, 2012. On motion of Council Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this 10th day of January, 2012. RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: TIMOTHY J. CARMEL, CITY ATTORNEY . ATTACHMENT 3 RESOLUTION NO. ' A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE, CALIFORNIA DETERMINING THAT THE CITY ""OF ARROYO GRANDE SHALL NOT RETAIN THE HOUSING ASSETS AND FUNCTIONS OF THE DISSOLVED REDEVELOPMENT AGENCY OF THE CITY, OF ARROYO GRANDE RESULTING IN TRANSFER OF THE HOUSING , , ' , ASSETS AND FUNCTIONS OF THE DISSOLVED REDEVELOPMENT AGENCY OF THE CITY OF ARROYO , GRANDE TO THE HOUSING AUTHORITY OF THE COUNTY OF SAN LUIS OBISPO, PURSUANT TO HEALTH AND SAFETY CODE SECTION 34176 WHEREAS, the Redevelopment Agency of the City of Arroyo Grande ("RDA") is a public body, corporate and politic, organized and existing under the California Community Redevelopment Law(Health & Safety Code Section 33000 et seq.); and WHEREAS, the City of Arroyo Grande is a municipal corporation and a general law city of the State of California ("City"); and WHEREAS, on December 29, 2011, the California Supreme Court issued its'opinion in ,' the case"California Redevelopment Association, et al.` v. Ana Matosantos, etc., et al., Case NO. S196861, and upheld the validity of Assembly Bill 1x26 ("AB1x26") and invalidated Assembly Bill 1x27; and WHEREAS, the Court's decision results in the implementation. of AB1x26 which - dissolves all the redevelopment agencies in the State of California as of February' 1, ` 2012; and WHEREAS, pursuant to a provision of AB1x26, codified as Health and Safety Code , Section 34176, the city, in the case of a redevelopment agency of a'city, may elect to retain the housing assets and functions of the dissolved redevelopment agency; and , WHEREAS, the City Council, having considered the matter, has determined, in its legislative discretion, that it is in the best interests of the City for the City to NOT retain the housing assets and functions of the dissolved RDA; and • WHEREAS, with the foregoing determination, upon the dissolution of the RDA scheduled to occur, as of the date of this Resolution, on February 1, 2012, the housing " assets,and functions of the dissolved RDA are transferred to the Housing Authority of " the County of San Luis Obispo as "local housing authority" defined in Health and,Safety , ' ' Code Section 34176(b)(2); - , NOW; THEREFORE, the City Council of the City of Arroyo Grande resolves as follows: 1. The foregoing,Recitals are true and correct and are incorporated herein. .° RESOLUTION NO. PAGE 2 2. The City Council hereby determines that the City of Arroyo Grande shall not retain the housing assets and functions of the dissolved Redevelopment Agency of the City of Arroyo Grande, and that such housing assets and functions shall, by operation of law as set forth in Health and Safety Code Section 34176(b)(2), shall be transferred to the Housing Authority of the County of San Luis Obispo upon the dissolution of the Redevelopment Agency of the City of Arroyo Grande. 3 The City Manager and his authorized designees are hereby authorized and directed to take such other and further actions and sign such other and further documents as is necessary and proper to implement this Resolution on behalf of the City. On motion of Council Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: . ABSENT: the foregoing Resolution was passed and adopted this 10th day of January, 2012. RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: TIMOTHY J, CARMEL, CITY ATTORNEY ATTACHMENT 4 LEGISLATURE MUST PASS SB 659 QUICKLY TO POSTPONE SCHEDULED DISSOLUTION OF REDEVELOPMENT AGENCIES ON FEBRUARY 1, 2012 Temporarily Postponing February 1 Deadline for Dissolution of Agencies Will Ensure the State and Education Receive the Funding Intended by the Legislature, and allow Time to Develop a New Job Creation and Neighborhood Renewal Program Background: On December 29, 2011,the California Supreme Court ruled in the redevelopment litigation -- CRA v. Matosantos—upholding ABX1 26 which abolished redevelopment agencies, but striking down companion legislation that would have allowed agencies to survive if they contribute money to the State. As part of the Supreme Court's ruling, agencies are to be dissolved on February 1, 2012. A coalition of labor, business, local government, public safety and affordable housing advocates is working with members of the Legislature to pass SB 659 and temporarily postpone the February 1, 2012 dissolution deadline in order to preserve the ability to develop a new job creation and neighborhood renewal program. Here's why: • SB 659 will temporarily postpone the February 1 dissolution deadline allowing critical time to develop a new job creation and neighborhood renewal program. - o If agencies are dissolved on February 1, 2012, successor agencies are responsible for winding down all assets, properties, contracts, leases, records, buildings, and equipment of the former redevelopment agencies, and laying off workers-- actions that are incredibly difficult to undo. • Passing SB 659 is the first step toward creating a new program that helps the State budget, local communities and education. o We are committed to working with lawmakers to create a new program that is appropriately focused on job creation, environmentally sustainable growth, affordable housing, and the elimination of blight and economic disparity. o Any new program will provide the State and local entities with additional budgetary relief that is now put in question because of the California Supreme Court ruling. We all are acutely aware that any job creation and neighborhood renewal program must give the state and education increased revenues for this fiscal year and beyond. • Allowing the dissolution process to proceed on February 1 will lead to mass litigation and chaos, shut down projects and lead to loss of jobs. o Once the dissolution process starts, it will lead to lawsuits, endless delays, and ongoing conflict, making it more difficult to develop a new job creation and community revitalization program in California. o The dissolution process could take years. Thousands of jobs and vital economic development and affordable housing projects will be lost in the meantime. 444- CITY OF ¢ovo•GRA•NO CITY OF ATTACHMENT 5 1-00100004" osw ARROYO. 4 RR _. _°_.. t �.� -. .� CALIFORNIA A CA FO R LI NIA January 11, 2012 Governor Jerry Brown Members of the State Senate Members of the State Assembly State Capitol - Sacramento, CA 95814 Re: SUPPORT SB 659 (Padilla)—Temporarily Postpone Dissolution of Redevelopment Agencies Dear Governor Brown and Members of the State Legislature: On behalf of the City of Arroyo Grande, and along with our coalition of labor, business, local government, public safety, and affordable housings advocates, I urge you to quickly pass and sign SB 659 (Padilla), a bill that would temporarily postpone the scheduled February 1, 2012 date to dissolve California's 425 redevelopment agencies. Temporarily postponing this February deadline will allow time for the Legislature and Governor to develop a new job creation and neighborhood renewal program, and to develop a solution that ensures that schools and the State budget receive the funding intended by the Legislature when they passed the redevelopment budget legislation last year. Without the extension, successor agencies are responsible for winding down all assets, properties, contracts, leases, records, buildings, and equipment of the former redevelopment agencies, and laying off workers -actions that are incredibly difficult to undo. Once the dissolution process starts, it will lead to lawsuits, endless delays, and ongoing conflict, making it more difficult to develop a new job creation and community revitalization program in California. Additionally, the dissolution process could take years. - Thousands of jobs and vital economic development and affordable housing projects will be lost in the meantime. Ultimately, we are committed to working with lawmakers to create a new program that is appropriately focused on job-creation, environmentally sustainable growth, affordable housing, and the elimination of true blight and economic disparity. Any solution would also have to provide the State" and local entities w ith additional budgetary_relief that is now put in question because of the California Supreme Court ruling. " In the meantime, we ask for your support for SB 659 to temporarily postpone the dissolution of redevelopment agencies as we work toward a new job creation and neighborhood renewal program. Sincerely, , Tony Ferrara Mayor OFFICE OF THE MAYOR• 300 East Branch Street • Arroyo Grande, California 93420 Phone: (805) 473-5400 © Fax: (805) 473-0386 o E-mail: agcity @arroyogrande.org e Website: www.arroyogrande.org • ATTACHMENT 6 YES, I SUPPORT SB 659 Temporarily Postponing February 1 Deadline for Dissolution of Redevelopment Agencies Will Ensure the State and Education Receive the Funding Intended by the Legislature, and Allow Time to Develop a New Job Creation and Neighborhood Renewal Program Coalition Sign-Up Form YES! You may list me/my organization in support of SB 659, legislation to postpone the scheduled dissolution of redevelopment agencies set for February 1, 2012. Temporarily postponing the February 1 deadline for dissolution of agencies will allow time to develop a new job creation and neighborhood renewal program. Please select a category: ❑ Organization ❑ Company ❑ Individual Please complete the following information: Company or Organization Name/Employer Name Title/Occupation Street address City State Zip ' County Phone number Fax number E-mail Address ' Signature (Required) Date ❑ Please email me updates. Email or fax this form to: thalstedabcfpublicaffairs.com or 916-442-3510 (fax) MEMORANDUM TO: CITY COUNCIUREDEVELOPMENT AGENCY BOARD OF DIRECTORS FROM: STEVEN ADAMS, CITY M NAGERI REDEVELOPMENT AGENCY EXECUTIVE DIRECTOR B SUBJECT: CONSIDERATION OF RESOLUTIONS REGARDING DISSOLUTION OF THE REDEVELOPMENT AGENCY DATE: JANUARY 10,2012 RECOMMENDATION: It is recommended: 1) the City Council adopt a Resolution electing to serve as the Successor Agency of the dissolved Redevelopment Agency (RDA); 2) the City Council adopt a Resolution electing to have the City retain the "housing assets and functions" of the dissolved RDA; 3) the City Council adopt a Resolution declaring the City has not forgiven any loan advance or indebtedness repayments owed to the City by the RDA; and 4) the RDA Board of Directors adopt a Resolution declaring the RDA has not forgiven any loan, advance or indebtedness repayments owed to the RDA by a public body. FINANCIAL IMPACT: Determining the net impact of the loss of the RDA is complex because it is impacted by a number of factors. Staff previously requested the City's redevelopment consultants to prepare an analysis on the financial impact of the potential loss of the RDA when it was first proposed by the Governor. A copy of the analysis is attached. Tax increment revenue would be lost, but the City would receive a portion of the tax increment funds for its share of the property taxes. As a result, the City will lose close to $1.5 rr~illion in annual tax increment funds. After deducting current pass- through funds and bond payments, it will result in a loss of close to $1 million annually. The City is expected to receive an increase in property tax funds of close to $140,000 in FY 2012-13. Of the current expenditures, close to $460,000 are for ongoing administrative and staffing costs that cannot be eliminated and will need to be charged to other accounts. In addition, the General Fund will have to assume Agenda Item 11.b.Page 1 CITY COUNCIL CONSIDERATION OF RESOLUTIONS REGARDING DISSOLUTION OF THE REDEVELOPMENT AGENCY JANUARY 10,2012 PAGE 2 lease payments for the Le Point Street parking lot. Lastly, the State legislation does enable the City to recoup some of its administrative costs associated with implementing the provisions of the legislation. Taking all these items into account, staffs initial projection is that the net ongoing impact on the budget will be in the range of $300,000. BACKGROUND: Two bills were approved last year by the State Legislature, ABXl 26 and ABXl 27, designed to divert redevelopment tax increment funds from redevelopment agencies to the State. The first bill eliminated redevelopment agencies as of October 1, 201 1. The second bill exempted any redevelopment agency from elimination if its host city adopted an ordinance agreeing to make specified payments to benefit schools. In August, the City Council approved an Ordinance to make the payment and maintain the redevelopment agency. Subsequently, the League of California Cities and California Redevelopment Association filed a lawsuit arguing that the legislation violated Proposition 22, which included protections against taking of redevelopment funds by the State. The lawsuit was heard by the California State Supreme Court, which also issued a stay on the provisions of the legislation until the ruling could be made. On December 29, 2011, the California Supreme Court issued its opinion in CRA v. Matosantos and upheld the validity of ABlx26, the bill that dissolves all the redevelopment agencies in the State, and invalidated ABlx27, the bill that would have allowed redevelopment agencies to remain in operation by making a payment to assist the state budget. As a result of the Court's ruling, the dissolution of redevelopment agencies will be effective as of February 1, 2012. A number of actions will be necessary in order to make this transition. ANALYSIS OF ISSUES: City Election to Serve as Successor Agency to Dissolved RDA One of the first actions, to be made by January 13, 201 2, is for the City Council to formally determine if it will serve as the "Successor Agency" to the RDA with the responsibility of winding up its affairs, preparing various payment schedules, and taking on the other administrative tasks required. If the City declines, the Successor Agency will be the first other public agency within the boundaries of the RDA (e.g., school district, county, or special district) that notifies the county auditor-controller that it will serve as the Successor Agency. If the City declines to be the Successor Agency, the City would not be in a position to control the preparation and contents of the Recognized Obligation Payment Schedule (which is the document that lists the RDA's financial obligations-including Agenda Item 11.b.Page 2 CITY COUNCIL CONSIDERATION OF RESOLUTIONS REGARDING DISSOLUTION OF THE REDEVELOPMENT AGENCY JANUARY 10,2012 PAGE 3 outstanding bonds-to be paid from the pool of former tax increment) and would also then not be the entity that would interact with the Oversight Board established by ABIx26 to review and approve actions of the Successor Agency in the RDA dissolution process. Any measure of control by the City of dissolution process would be significantly lessened, if not eliminated, if the City is not the Successor Agency. Moreover, if the City is not the Successor Agency, the City is nonetheless likely to incur administrative costs in dealing with the dissolution of the RDA but then with no means to obtain funds to pay 'those administrative costs. The public agency, including the City, that acts as the Successor Agency is entitled to receive up to 5% of its former tax increment for Fiscal Year 201 1-2012, and up to 3% each year after that, but not less than $250,000 each year, to meet the administrative expenses of serving as the Successor Agency. The Successor Agency's liability for serving in this capacity is expressly limited in ABlx26 [Health & Safety Code Section 34173(e)] to the property tax increment the Successor Agency receives to pay enforceable obligations and the value of any RDA assets transferred to it, so the City's general funds and other funds are not at risk if the City elects to be the Successor Agency to the dissolved RDA. Staff is therefore recommending the City Council serve as the Successor Agency to the RDA and to adopt the Resolution affirming its decision (the applicable provision of ABIx26 is not clear as to whether such a resolution is needed, so Agency Counsel is recommending its adoption if the Council elects to serve as the Successor Agency). A copy of the adopted Resolution would need to be filed with the County auditor- controller by close of business on January 13, 2012. If the City Council decides to not have the City serve as the Successor Agency, the City Council is required to adopt the Resolution declining to serve as the Successor Agency. Given the impending deadline, an alternate resolution is included as an attachment for action if necessary. City Retention of Housinn Assets and Function of the Former RDA The City Council must also decide whether the City or the County housing authority will be the successor to the "housing assets and functions" of the dissolved RDA. Although ABlx26 does not precisely define the term "housing assets and functions," the law does expressly state that the housing assets do not include the funds currently in the RDA's Low and Moderate Income Housing Fund, but it appears to include land owned by the RDA that was purchased with Low and Moderate Income Housing Funds. The "Successor Housing Agency," however, is given the right to enforce affordability covenants and take other actions consistent with the former RDA's authority with respect to affordable housing. Agenda Item 11.b.Page 3 CITY COUNCIL CONSIDERATION OF RESOLUTIONS REGARDING DISSOLUTION OF THE REDEVELOPMENT AGENCY JANUARY 10,2012 PAGE 4 Staff is recommending the City Council adopt the Resolution presented that states the City elects to retain the RDA housing assets and functions. If the City Council wishes the housing assets and functions be transferred to the County housing authority, an alternate resolution should be adopted, which is included as an attachment. AB 936 Assembly Bill 936, adopted in the last session of the Legislature, became effective January I, 201 2. AB 936 arose out of a controversial decision by the city council in San Diego to waive repayment of a certain loan it had given to its redevelopment agency. The effect of AB 936 was described by the California State Senate as follows: "This bill would require that any time a city, county or RDA forgives a debt of the other; it must adopt a resolution making specified findings. In addition, cities, counties and RDAs are required to adopt a resolution by February 1, 2012, stating whether or not they forgave any loans, advances, or indebtedness between the January 1, 2010, to December 31, 201 1, owed by an RDA or a public body. The resolution must be sent to the State Controller." Therefore, AB 936 requires two resolutions to be adopted by February I, 2012. The first resolution is by the RDA declaring whether the RDA has waived or forgiven any loan it gave to a "public body" (not defined in the law) between January 1, 2010 and December 31, 201 1, and if it has to describe the loan recipient, loan terms, and amount forgiven. The second resolution is by the City Council declaring whether it waived or forgave any loans to the RDA during the same time period. Staff has determined that the RDA did not waive or forgive any loan given to a "public body" during that time period (in fact there were no such loans given by the RDA) and has also determined the City did not waive or forgive any loans to the RDA in that time period. Even though the RDA will be dissolved as of February 1, 201 2, the RDA will be operating in the month of January, i.e., during the time period in which the resolutions are required to be adopted. Staff is recommending the RDA Board and City Council each adopt the AB 936 resolutions. Copies of the adopted resolutions are required to be filed with the State Controller within 10 days after their adoption. Pipeline Proiects The RDA has worked to implement a number of creative strategies to make redevelopment and affordable housing projects possible, many of which are under way. As a result, these efforts have presented a number of issues that must be resolved. Given the lack of clarity provided by the State legislation, some of the outcomes are known, while other are still being resolved. Agenda Item 11.b.Page 4 CITY COUNCIL CONSIDERATION OF RESOLUTIONS REGARDING DISSOLUTION OF THE REDEVELOPMENT AGENCY JANUARY 10,2012 PAGE 5 The RDA has an agreement in place with Peoples' Self Help Housing for the project on Courtland Street so staff believes that project will proceed. The agreement for the Habitat for Humanity project on Brisco Road was an interim loan agreement so staff is still working with RDA special counsel to determine how to proceed. The Pearwood property owned by the RDA will likely be required to be sold and proceeds distributed to property tax recipients. The same is likely true for the Faeh Street property. Most disturbing is that it is unlikely that any proceeds will go to repay the funds borrowed from the City Housing In Lieu Fee fund to acquire that property. ALTERNATIVES: 'The following alternatives are presented for consideration: - Adopt the Resolutions electing to have the City serve as the Successor Agency to the RDA, maintain housing assets and functions, declaring that no RDA debt was forgiven and declaring no City debt was forgiven by the RDA; - Adopt alternate Resolutions declining to have the City serve as the Successor Agency and to maintain housing assets and functions; - Delay the two Resolutions required by AB 936 declaring that no debt was forgiven since they are not required until February 1''; or - Provide staff other direction. ADVANTAGES: The recommendations will increase the City's control over selling of RDA assets and will enable the City to be reimbursed for some staff and consultant costs associated with administration of RDA assets, obligations and other ongoing matters. DISADVANTAGES: The recommendations will increase staff workload. ENVIRONMENTAL REVIEW: No environmental review is required for this item. PUBLIC NOTIFICATION AND COMMENTS: The agenda was posted in front of the City Hall on Thursday, January 5,2012 and on the City's website on Friday, January 6, 2012. Attachments: 1. May 10, 201 1 Memorandum from Tierra West on Impact of Elimination of Redevelopment Agencies 2. Alternate City Council Resolution declining to serve as the Successor Agency 3. Alternate City Council Resolution declining to retain housing assets and functions Agenda Item 11.b.Page 5 RESOLU'rION NO. A RESOLUTION OF THE ClTY COUNCIL OF THE ClTY OF ARROYO GRANDE, CALIFORNIA DETERMINING THAT THE ClTY OF ARROYO GRANDE ELECTS TO, AND SHALL, SERVE AS THE SUCCESSOR AGENCY TO THE DISSOLVED REDEVELOPMENT AGENCY OF THE ClTY OF ARROYO GRANDE PURSUANT TO HEALTH AND SAFETY CODE SECTION 34,173 WHEREAS, the Redevelopment Agency of the City of Arroyo Grande ("Redevelopment Agency") is a public body, corporate and politic, organized and existing under the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.); and WHEREAS, the City of Arroyo Grande is a municipal corporation and a general law city of the State of California ("City"); and WHEREAS, on December 29, 201 1, the California Supreme Court issued its opinion in the case California Redevelopment Association, et a/. v. Ana Matosantos, etc., et al., Case No. S196861, and upheld the validity of Assembly Bill 1x26 ("ABlx26") and invalidated Assembly Bill 1 x27; and WHEREAS, the Court's decision results in the implementation of AB1x26 which dissolves all the redevelopment agencies in the State of California as of February 1, 2012; and WHEREAS, pursuant to a provision of AB1x26, codified as Health and Safety Code Section 34173(d)(1), the city, in the case of a redevelopment agency of a city, automatically becomes the "Successor Agency" to its dissolved redevelopment agency and is charged with the responsibility of winding up the affairs of the dissolved redevelopment agency pursuant to AB1x26, unless 'the city council adopts a resolution electing to not serve as the Successor Agency and thereafter files a copy of such resolution with the county auditor-controller; and WHEREAS, the California Supreme Court, in Footnote 25 of its opinion, extended to January 13, 2012 the deadline for a city to make its decision on whether to decline to be the Successor Agency to its dissolved redevelopment agency; and WHEREAS, the City Council, having considered the matter, has determined, in its legislative discretion, that it is in the best interests of the City for the City to serve as the Successor Agency to the dissolved Redevelopment Agency; and WHEREAS, although pursuant to Health & Safety Code Section 34173(d)(l), the City would automatically became the Successor Agency unless it affirmatively elects to not serve as the Successor Agency by Resolution, the City nonetheless wishes to express its intention to serve as the Successor Agency to the dissolved Redevelopment Agency. Agenda Item 11.b.Page 6 RESOLUTION NO. PAGE 2 NOW, THEREFORE, the City Council of the City of Arroyo Grande resolves as follows: 1. The foregoing Recitals are true and correct and are incorporated herein. 2. The City Council of the City of Arroyo Grande hereby affirmatively determines that the City of Arroyo Grande elects to, and shall, serve as the Successor Agency to the dissolved Redevelopment Agency of the City of Arroyo Grande. 3. The City Manager and his authorized designees are hereby authorized and directed to take such other and further actions and sign such other and further documents as is necessary and proper to implement this Resolution on behalf of the City. 4. The City Clerk shall file a copy of this Resolution with the San Luis Obispo County Auditor-Controller not later than 5:00 p.m. on January 13, 2012. On motion of Council Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this loth day of January, 201 2. Agenda Item 11.b.Page 7 RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, ClTY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, ClTY MANAGER APPROVED AS TO FORM: ClTY AlTORNEY Agenda Item 11.b.Page 8 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE, CALIFORNIA DETERMINING THAT THE CITY OF ARROYO GRANDE SHALL RETAIN THE HOUSING ASSETS AND FUNCTIONS OF THE DISSOLVED REDEVELOPMENT AGENCY OF THE CITY OF ARROYO GRANDE PURSUANT TO HEALTH AND SAFETY CODE SECTION 34176 WHEREAS, the Redevelopment Agency of the City of Arroyo Grande ("Redevelopment Agency") is a public body, corporate and politic, organized and existing under the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.); and WHEREAS, the City of Arroyo Grande is a municipal corporation and a general law city of the State of California ("City"); and WHEREAS, on December 29, 201 1, the California Supreme Court issued its opinion in the case California Redevelopment Association, et a/. v. Ana Matosantos, etc., et al., Case No. S196861, and upheld the validity of Assembly Bill 1x26 ("ABlx26") and invalidated Assembly Bill 1 x27; and WHEREAS, the Court's decision results in the implementation of AB1x26 which dissolves all the redevelopment agencies in the State of California as of February 1, 2012; and WHEREAS, pursuant to a provision of AB1x26, codified as Health and Safety Code Section 34176, the city, in the case of a redevelopment agency of a city, may elect to retain the housing assets and functions of the dissolved redevelopment agency; and WHEREAS, the City Council, having considered the matter, has determined, in its legislative discretion, that it is in the best interests of the City for the City to retain the housing assets and fl.~nctions of the dissolved Redevelopment Agency; NOW, THEREFORE, the City Council of the City of Arroyo Grande resolves as follows: 1. 'The foregoing Recitals are true and correct and are incorporated herein. 2. The City Council of the City of Arroyo Grande hereby determines that the City of Arroyo Grande shall retain the housing assets and functions of the dissolved Redevelopment Agency of the City of Arroyo Grande. 3. 'The City Manager and his authorized designees are hereby authorized and directed to take such other and further actions and sign such other and further documents as is necessary and proper to implement this Resolution on behalf of the City. Agenda Item 11.b.Page 9 RESOLUTION NO. PAGE 2 On motion of Council Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this 10" day of January, 2012. Agenda Item 11.b.Page 10 RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, ClTY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, ClTY MANAGER APPROVED AS TO FORM: ClTY ATTORNEY Agenda Item 11.b.Page 11 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF 'THE CITY OF ARROYO GRANDE MAKING A DECLARATION UNDER HEALTH AND SAFETY CODE SECTION 33354.8 THAT, DURING THE PERIOD FROM JANUARY 1,2010, TO DECEMBER 31,201 1, THE CITY HAS NOT FORGIVEN THE REPAYMENT, WHOLLY OR PARTIALLY, OF ANY LOAN, ADVANCE, OR INDEBTEDNESS OWED TO THE CITY BY THE REDEVELOPMENT AGENCY OF THE CITY OF ARROYO GRANDE WHEREAS, the City of Arroyo Grande ("City") is a municipal corporation and general law city of the State of California; and WHEREAS, the Redevelopment Agency of the City of Arroyo Grande, a public body, corporate and politic ("Agency"), is the redevelopment agency performing redevelopment functions within the territorial limits of the City pursuant to the California Community Redevelopment Law (Health & Safety Code § 33000, et seg.); and WHEREAS, the California Community Redevelopment Law, pursuant to Section 33354.8 of the California Health and Safety Code, requires that the City (a public body) adopt a resolution after January 1, 2012 and prior to February 1, 201 2, declaring whether or not it has forgiven, during the period of time commencing January 1, 2010, and ending December 31, 2011, the repayment, wholly or partially, of a loan, advance, or indebtedness that has been owed to the City by the Agency; and WHEREAS, Section 33354.8 of the California Health and Safety Code also requires that within ten (10) days after the adoption of the resolution, the Agency transmit a copy of the resolution to the California State Controller. NOW, THEREFORE, the City Council of the City of Arroyo Grande resolves as follows: 1. Based upon the best knowledge of City staff and the City Council, during the period between January 1, 2010, and December 31, 201 1, the City has not forgiven the repayment, wholly or partially, of a loan, advance, or indebtedness that has been owed to the City by the Agency. 2. Not later than ten (10) days after the adoption of this Resolution, the City Clerk shall transmit a copy of this Resolution to the California State Controller. On motion of Council Member , seconded by Council Member , and on the followi~g roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this loth day of January, 201 2. Agenda Item 11.b.Page 12 RESOLUTION NO. PAGE 2 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, ClTY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, ClTY MANAGER APPROVED AS TO FORM: TIMOTHY J, CARMEL, ClTY ATTORNEY Agenda Item 11.b.Page 13 RESOLU'TION NO. A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF ARROYO GRANDE MAKING A DECLARATION UNDER HEALTH AND SAFETY CODE SECTION 33354.8 THAT, DURING THE PERIOD FROM JANUARY 1,2010, TO DECEMBER 31,201 1, THE AGENCY HAS NOT FORGIVEN THE REPAYMENT, WHOLLY OR PARTIALLY, OF ANY LOAN, ADVANCE, OR INDEBTEDNESS OWED TO THE AGENCY BY A PUBLIC BODY WHEREAS, the Redevelopment Agency of the City of Arroyo Grande, a public body, corporate and politic ("Agency"), is the redevelopment agency performing redevelopment functions within the territorial limits of the City of Arroyo Grande pursuant to the California Community Redevelopment Law (Health & Safety Code § 33000, et seq.); and WHEREAS, the City of Arroyo Grande ("City") is a municipal corporation and general law city of the State of California; and WHEREAS, the California Community Redevelopment Law, pursuant to Section 33354.8 of the California Health and Safety Code, requires that the Agency adopt a resolution after January 1, 2012 and prior to February 1, 2012, declaring whether or not it has forgiven, during the period of time commencing January 1, 2010, and ending December 31, 2011, the repayment, wholly or partially, of a loan, advance, or indebtedness that has been owed to the Agency by a public body; and WHEREAS, Section 33354.8 of the California Health and Safety Code also requires that within ten (10) days after the adoption of the resolution, the Agency transmit a copy of the resolution to the legislative body and the California State Controller. NOW, THEREFORE, the Redevelopment Agency of the City of Arroyo Grande resolves as follows: 1. Based upon the best knowledge of Agency staff and the Agency Board of Directors, during the period between January 1, 2010, and December 31 , 201 1, the Agency has not forgiven the repayment, wholly or partially, of a loan, advance, or indebtedness that has been owed to the Agency by a public body. 2. Not later than ten (10) days after the adoption of this Resolution, the Agency Secretary shall transmit a copy of this Resolution to the City Council of the City of Arroyo Grande and to the California State Controller. On motion of Agency Board Member , seconded by Agency Board Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this 10~ day of January, 2012. Agenda Item 11.b.Page 14 RESOLUTION NO. PAGE 2 TONY FERRARA, CHAIR ATTEST: KELLY WETMORE, AGENCY SECRETARY APPROVED AS TO CONTENT: STEVEN ADAMS, EXECUTIVE DIRECTOR APPROVED AS TO FORM: TIMOTHY J, CARMEL, AGENCY COUNSEL Agenda Item 11.b.Page 15 ATTACHMENT 1 Date : May 1 O,20 1 1 To : Steven Adams, City of Arroyo Grande Angela Kraetsch, City of Arroyo Grande From: Tim Mulrenan, Tierra West Advisors Michael Garcia, Tierra West Advisors Subject: Impact of the elimination of redevelopment agencies Pursuant to your request, Tierra West Advisors Inc. ("Tierra West") has analyzed the potential impact of the elimination of redevelopment agencies upon the City of Arroyo Grande. Backpround As a result of significant budget challenges at the state level, Governor Jerry Brown has proposed a budget for fiscal year 2011-12 that would include the elimination of all redevelopment agencies within the State of California ("State"). This proposal would be implemented by two (2) bills being processed by the legislature, Senate bill SB 77 ("SB77") and Assembly bill AB I01 ("ABIOI ") (combined, the "Bills"). These bills were voted on in the legislature in mid-March 20 1 I, with ABl 01 missing passage by one (I) vote. The California Redevelopment Association ("CRA") has proposed alternate legislation that would keep the redevelopment agencies in business, but provide for voluntary transfer of a portion of the tax increment funds to schools. This memorandum reviews the larger impacts proposed under ABlOl & SB77 rather than the impacts of the CRA alternative. Impacts ofABlOl & SB77 Passage of the bills and execution by the Governor would put the following changes in place: Eliminate redevelopment agencies statewide as of July 1, 201 1. Set up successor agencies to wind up the affairs of redevelopment agencies. A 7i,16 Fa*,: Irc 5'1t.*l Lo; 411grle; CA 90033 1 ;?3;265 4400 F 3231261 8676 W t!rlrdWC5ISllllSDI\ Cum REAL ESWE 6. REOtVELOFMENl CONSULi4N15 Agenda Item 11.b.Page 16 Mr. Steven Adams Ms. Angela Kraetsch May 10,201 1 Page 2 Provide for the successor agencies to honor existing bonds and other contracts outstanding. The successor agencies have 60 days to develop an Enforceable Obligation Payment Schedule for the successor agency to honor. Require the County Auditor-Controllers to perform audits of each redevelopment agency by October 1,201 1 and essentially function as the Treasurer of each successor agency. Lengthen the Statute of Limitations on redevelopment agency actions approved after January 1,201 1 from 90 days to 2 years. Limit the activities redevelopment agencies can undertake after January 1, 201 1 so as to preserve the assets. Subject to existing obligations, transfer funds which were formerly considered tax increment revenue to Redevelopment Property Tax Trust Funds ("Trust Funds") at each county, and from there to other taxing agencies. Allocate a combined $1.7 billion from the Trust Funds to Public Health and Safety Funds ("Health and Safety Funds") at each county, which would reimburse the state for health and trial court services in the respective counties. The counties would administer these Health and Safety Funds or, if they chose not to, they would not receive the moneys remaining in the Trust Funds. In that event the Directors of Finance would designate different entities to administer the Health and Safety Funds. Maintain the pass-through payments initially implemented by AB 1290. Allocation of Tax Increment According to documents obtained from the City as well as the San Luis Obispo County ~uditor's-office, The Arroyo Grande ~edeveld~ment Agency ("Agency") is expected tb collect Net Tax Increment of $1,49 1,114 for Fiscal Year 201 0-1 1. This figure is before the deductions for the Basic Aid Pass-Through Payment as well as the Tiers 1 and 2 Pass- Through Payments. Of this amount, 20%, or $298,223, will be dedicated for use in the creation and preservation of affordable housing. Additionally, as a taxing entity, the City of Arroyo Grande is permitted to receive 19.87238% of the total pass through amount for tier 1. This figure equates to $59,264 for the 2010-1 1 fiscal year. Should redevelopment be eliminated and tax increment reverts back to the taxing entities, this same percentage would apply to the total amount of tax increment, not simply the pass through amount. ADVISORS Agenda Item 11.b.Page 17 Mr. Steven Adams Ms. Angela Kraetsch May 10,201 1 Page 3 The Agency issued a Tax Allocation Bond in 2007 in the amount of $6.285 million. This bond was collateralized by the Agency's tax increment revenue, which would not be disturbed by the pending legislation. The bond requires annual debt service payments of approximately $457,000. If the Bills were passed such that they were to take effect in their present form, the Agency would cease to exist as of July 1, 201 1. 'The successor agency would be provided the revenue to honor the 2007 bonds and funds to honor any other outstanding contractual commitments. As of the date of this memorandum the only outstanding contractual commitment is the architectural contract in the amount of $1 60,000 for the design of the new police department building. The Agency is working with Habitat for Humanity for the development of a new affordable housing project. So far the Agency has loaned Habitat funds which Habitat has used to purchase the land for the project. For this analysis Tierra West has assumed that neither the City nor the Agency would provide any additional funds to Habitat, Habitat would develop the project with funds from other sources, and neither the City nor the Agency would receive a repayment on the Habitat loan. Exhibit A to this report indicates Tierra West's estimate of the property tax income that the City and Agency were to receive over the next 20 years if the Agency were to remain in place under the current conditions. This estimate is that the combined hnds for fiscal year 201 1-12 would come to $1,420,114. Of this, $456,8 16 would be required to service the 2007 bond, leaving the City $963,298 in both general fund revenue and Agency tax increment from property taxes. By comparison, Exhibit B indicates the revenue that would accrue to the City if the Agency were eliminated. In that case the City would collect $893,1 18 in property tax income, from which $456,816 would be required to service the bonds, leaving $436,302 in net property tax income. Exhibits C & D provide Tierra West's estimate of tax increment revenue over the next 20 years with and without the Agency. Tierra West has assumed that the Basic Aid payments to the school districts would remain in place under its current format, as well as the pass through payments required under AB1290. The language of ABlOl retains the AB 1290 payments under the current formulas, so these pass throughs don't change. Tierra West has assumed that the City will receive 19.8% of the base year property tax collections as well as the tier 1 pass through payments under the AB1290 pass throughs. The City does not collect ADVISORS Agenda Item 11.b.Page 18 Mr. Steven Adams Ms. Angela Kraetsch May 10,20 1 1 Page 4 a share of the tier 2 or tier 3 payments. Therefore, Tierra West is assuming that the City's revenue from the base year and AB 1290 pass throughs will not change. The difference occurs by taking the Agency out of the distribution of tax increment. In fiscal year 201 1-12 Tierra West estimates that the tax increment available to the Agency after all pass throughs would be $1,114,5 12. After deducting the bond payments of $456,816 the Agency would have $657,696 available in both housing and non-housing funds. Tierra West's estimate of the annual debt service required by the bond is indicated in Exhibit E. Tierra West reviewed the Merrill Lynch Final Official Statement in arriving at this amortization schedule. With the Agency eliminated, the $657,696 net remaining in tax increment funds would be distributed among the taxing agencies. The City's share of this would be 19.87238%, which would provide $1 30,700 to the City's general fund for fiscal year 201 1-12. This amount increases to $1 37,724 in fiscal year 201 2-1 3. As of the date of this memorandum neither SB77 nor AB 101 have passed. The Bills may or may be passed in the legislature, and, if they are passed, there may be changes in the requirements that Tierra West is basing its estimates on. The versions Tierra West 'has been reviewing were last modified March 151h, 201 1. The requirements of SB77 and ABIOI will need to be harmonized to arrive at any final law ultimately signed by the Governor. Summary The state legislature has considered SB77 and ABlOl in the current session, which, if passed and signed by the Governor, would eliminate redevelopment agencies. AB 10 1 was brought up for a vote in mid-March and missed passage by 1 vote. If AB 101 were to pass, and to take effect for fiscal year 20 1 1-1 2, the funds available to the City and Agency would be reduced by approximately $526,996 in 201 1-12 from what would be received if the Agency were to remain in place. On the City general fund account, the City would receive its share of the tax increment that would have otherwise gone to the Agency. Tierra West estimates this amount to be approximately $1 30,700 for fiscal year 201 1-12. Thank you for the opportunity to review this issue on your behalf. ADVISORS Agenda Item 11.b.Page 19 ,City of Arroyo Grande share of property tax revenue With Redevelopment I I, City Share City Share Net Agency Agency+ of Base of Pass- Total City Agency Agency non- City Bond Net Fiscal Year I Year thrus Revenue Increment Housing housing Revenue Payments Available I ' Tierro West Advisors, Inc. 9 TIERRAWEST ADVISORS Agenda Item 11.b.Page 20 EXHIBIT B City of Arroyo Grande share of property tax revenue ; 1 7ierro West Advisors Inc 04/21/11 2:27PM City Share of City Share of City Share of Bond balance of Total City 'Total Agency Agency +City Bond Net Fiscal Year Base Year Pass-thrus Obligations ' increment Revenue revenue Revenue Payments Available Total Difference over 20 years Present Value @ 5.50% Difference due to ABlOl * 5877 ADVISORS Agenda Item 11.b.Page 21 EXHIBIT C Arroyo Grande Tax Increment projections with redevelopment agency 1.38% Year Base Year 2009-2010 201G2011 2011-2012 2012-2013 2013-2014 20142015 2015-2016 20162017 2017-2018 20182019 20192020 202G2021 2021-2022 2022-2023 2023-2024 20242025 202!5-2026 20262027 2027-2028 20282029 2029-2030 203G2031 Value Gross Value lncrement Total Adj. Tax lncrement Basic Aid Tier 1 Pass Tier 2 Pass Tier 3 Pass Total Pass Pass Through Through Through Throughs Through Net Increment $1,091,954 $1,099,611 - $1,114,512 $1,149,288 $1,184,761 $1,220,943 $1,257,851 $1,295,497 $1,333,897 $1,373,066 $1,413,019 ~1,453,ni $1,495,340 $1,537,741 $1,580,991 $11625,107 $1,670,106 $1,716,005 $1,754,519 $1,793,804 $1,833,875 $1,874,749 Cumulative lncrement $1,091,954 $2,191,565 $3,306,077 $4,455,365 $5,640,126 $6,861,070 $8,118,920 $9,414,417 $10,748,314 $12,121,379 $13,534,398 $14,988,169 $16,483,509 $18,021,250 $19,-602,241 $21,227,348 $22,897,454 $24,613,459 526,367,978 $28,161,782 $29,995,657 $31,870,405 City amount Housing of pass through ADVISORS Agenda Item 11.b.Page 22 Arroyo Grande Tax lncrement projections without redevelopment agency 0.198723774 City Share of net Net increment City Share of Total Adj. Tax Total Pass City Share of 2007TAB debt increment to City after Base YearTax Net lncrement Increment Throughs Pass Throughs service (including bond bond debt Revenue Year debt service) service Base Year 2009-2010 2010-2011 ,2011-2012 2012-2013 2013-2014 20142015 20152016 20162017 2017-2018 20182019 2019-2020 ADVISORS Agenda Item 11.b.Page 23 EXHIBIT E 2007 Arroyo Grande Tax Allocation Bond Amortization ADVISORS Combined Balance (BOP) lnterest Principal Total $6,275,000 $357,651 $10,000 $367,651 $6,265,000 $357,120 $100,000~ $457,120 $6,165,000 $351,816 $105,000 $456,816 $6,060,000 $346,247 $110,000 . $456,247- $5,950,000 $340,413 $115,000 $455,413 $5.835.000 $334,313 $120,poO $454,313- $5,715,000 $327,948 $130,000 $457,948 $5,585,000 $321,053 $135,000 $456,053 $5,450,000 $313,893 $140,000 $453,893 $5,310,000 $306,467 $150,000 $456,467 $5,160.000 $298,511 $155,000 $453,511 $5,005,000 $290,290 $165,000 $455,290 $4,840,000 $280,720 $175,000 $455,720 $4,665,000 $270,570 $185,000 $455,570 $4,480,000 $259,840 $195.000 $454,840 $4,285,000 ' $248,530 $205,000 $453,530 $4,080,000 $236,640 $220,000 $456,640 $3,860,000 $223,880 $230,000 $453,880 $3,630,000 $210,540 $245,000 $455,540 $3,385,000 $196,330 $260,000 $456,330 $3,125,000 $l8l,zW, $275,000 $456,250 $2,850,000 $165,300 $290,000 $455,300 Interest rate 5.800096 Sept 1,2037 Term Bond Balance (BOP) Interest Principal Total $5,005,000 $290,290 $0 $290,290 $5,005,000 $290,290 $0 ~290.~. $5,005,000 $290,290 $0 $290.290. $5,005,000 $290,290 - $0 $290!290. $5,005,000 $290,290 9 $290,290 $5,005,000 $290,290 $0 $290,290- $5,005,000 $290,290 $0 $290,290 $5,005,000 $290,290 $0 $290,290 $5,005,000 $290,290 9 s290.m $5,005,000 $290,290 $0 $290,290 $5,005,000 $290,290 $0 $290,290 $5,005,000 $290,290 $165,000 $455,290 $4,840,000 $280,720 $175,000 $455,720 $4,665,000 $270,570 $185,000 $455,570 $4,480,000 $259,840 $195,000 $454,840 $4,285,000 $248,530 $205,000 $453,530 $4,080,000 $236,640 $220,000 $456,640 $3,860,000 $223,880 $230,000 $453,880 $3,630,000 $210,540 $245,000 $455,540 $3,385,000 $196,330 $260,000 $456,330 $3,125,000 $181,250 $275,000 $456,250 $2,850,000 $165,~0 $290,000 $455,300 Year Base Year 2009-2010 201@2011 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 202@2021 2021-2022 2022-2023 2023-2024 2024-2025 2025-2026 2026-2027 2027-2028 2028-2029 2029-2030 20UT2031 Interest rate 5.3W Sept 1,2019Term Bond Balance (BOP) Interest Principal Total $1,270,000 $67,361 $_lO,000 $77,361 $1,260,000 $66,830 $1~,000 $166,830 $1,160,000 $61,526 $105,000 $166,526 $1,055,000 $55,957 . $110,000 $165,957 $945,000 $50.123 $115,000 $165,U3 .... 5830,000 .$44,0?3 $UO,000 $164,023 $710,000 $37,658 $l30,000 $167,658 $580,000 $30,763 $l35,000 $165,763 $445.000 $23,603 $140,000 $163,603 $305,000 $16,177 $lSO,Oa? $166,177 $155,000 $8,221 $155,000 $163,221, Agenda Item 11.b.Page 24 ATTACHMENT 2 RESOLUTION NO. A RESOLUTION OF THE ClTY COUNCIL OF THE ClTY OF ARROYO GRANDE, CALIFORNIA DETERMINING THAT THE ClTY OF ARROYO GRANDE DECLINES TO, AND SHALL NOT, SERVE AS THE SUCCESSOR AGENCY TO THE DISSOLVED REDEVELOPMENT AGENCY OF THE ClTY OF ARROYO GRANDE PURSUANT TO HEALTH AND SAFETY CODE SECTION 34173 WHEREAS, the Redevelopment Agency of the City of Arroyo Grande ("Redevelopment Agency") is a public body, corporate and politic, organized and existing under the California Community Redevelopment Law (Health & Safety Code Section 33000 et seg.); and WHEREAS, the City of Arroyo Grande is a municipal corporation and a general law city of the State of California ("City"); and WHEREAS, on December 29, 201 1, the California Supreme Court issued its opinion in the case California Redevelopment Association, et al. v. Ana Matosantos, etc., et al., Case No. S196861, and upheld the validity of Assembly Bill 1x26 ("ABlx26") and invalidated Assembly Bill 1x27; and WHEREAS, the Court's decision results in the implementation of AB1x26 which dissolves all the redevelopment agencies in the State of California as of February 1, 2012; and WHEREAS, pursuant to a provision of AB1x26, codified as Health and Safety Code Section 34173(d)(1), the city, in the case of a redevelopment agency of a city, automatically becomes the "Successor Agency" to its dissolved redevelopment agency and is charged with the responsibility of winding up the affairs of the dissolved redevelopment agency pursuant to AB1x26, unless the city council adopts a resolution electing to not serve as the Successor Agency and thereafter files a copy of such resolution with the county auditor-controller; and WHEREAS, the California Supreme Court, in Footnote 25 of its opinion, extended to January 13, 2012 the deadline for a city to make its decision on whether to decline to be the Successor Agency to its dissolved redevelopment agency; and WHEREAS, the City Council, having considered the matter, has determined, in its legislative discretion, that it is in the best interests of the City for the City to NOT serve as the Successor Agency to the dissolved Redevelopment Agency; NOW, 'THEREFORE, the City Council of the City of Arroyo Grande resolves as follows: 1. The foregoing Recitals are true and correct and are incorporated herein. Agenda Item 11.b.Page 25 RESOLUTION NO. PAGE 2 2. The City Council of the City of Arroyo Grande hereby determines that the City of Arroyo Grande declines to, and shall not, serve as the Successor Agency to the dissolved Redevelopment Agency of the City of Arroyo Grande. 3. The City Manager and his authorized designees are hereby authorized and directed to take such other and further actions and sign such other and further documents as is necessary and proper to implement this Resolution on behalf of the City. 4. The City Clerk shall file a copy of this Resolution with the San Luis Obispo County Auditor-Controller not later than 5:00 p.m. on January 13, 2012. On motion of Council Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this lorn day of January, 2012. Agenda Item 11.b.Page 26 RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, ClTY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, ClTY MANAGER APPROVED AS TO FORM: 'TIMOTHY J. CARMEL, ClTY ATTORNEY Agenda Item 11.b.Page 27 ATTACHMENT 3 RESOLUTION NO. A RESOLUTION OF THE ClTY COUNCIL OF THE ClTY OF ARROYO GRANDE, CALIFORNIA DETERMINING THAT THE ClTY OF ARROYO GRANDE SHALL NOT RETAIN THE HOUSING ASSETS AND FUNCTIONS OF THE DISSOLVED REDEVELOPMENT AGENCY OF THE ClTY OF ARROYO GRANDE RESULTING IN TRANSFER OF THE HOUSING ASSETS AND FUNCTIONS OF THE DISSOLVED REDEVELOPMENT AGENCY OF 'THE ClTY OF ARROYO GRANDE TO THE HOUSING AU'THORITY OF 'THE COUNTY OF SAN LUIS OBISPO, PURSUANT TO HEALTH AND SAFETY CODE SECTION 34176 WHEREAS, the Redevelopment Agency of the City of Arroyo Grande ("RDA) is a public body, corporate and politic, organized and existing under the California Community Redevelopment Law (Health & Safety Code Section 33000 et seg.); and WHEREAS, the City of Arroyo Grande is a municipal corporation and a general law city of the State of California ("City"); and WHEREAS, on December 29, 201 1, the California Supreme Court issued its opinion in the case California Redevelopment Association, et a/. v. Ana Matosantos, etc., et al., Case No. S196861, and upheld the validity of Assembly Bill 1x26 ("ABlx26") and invalidated Assembly Bill 1 x27; and WHEREAS, the Court's decision results in the implementation of AB1x26 which dissolves all the redevelopment agencies in the State of California as of February 1, 2012; and WHEREAS, pursuant to a provision of AB1x26, codified as Health and Safety Code Section 34176, the city, in the case of a redevelopment agency of a city, may elect to retain the housing assets and functions of the dissolved redevelopment agency; and WHEREAS, the City Council, having considered the matter, has determined, in its legislative discretion, that it is in the best interests of the City for the City to NOT retain the housing assets and functions of the dissolved RDA; and WHEREAS, with the foregoing determination, upon the dissolution of the RDA scheduled to occur, as of the date of this Resolution, on February 1, 2012, the housing assets and functions of the dissolved RDA are transferred to the Housing Authority of the County of San Luis Obispo as "local housing authority" defined in Health and Safety Code Section 341 76(b)(2); NOW, THEREFORE, the City Council of the City of Arroyo Grande resolves as follows: 1. The foregoing Recitals are true and correct and are incorporated herein. Agenda Item 11.b.Page 28 RESOLUTION NO. PAGE 2 2. The City Council hereby determines that the City of Arroyo Grande shall not retain the housing assets and functions of the dissolved Redevelopment Agency of the City of Arroyo Grande, and that such housing assets and functions shall, by operation of law as set forth in Health and Safety Code Section 34176(b)(2), shall be transferred to the Housing Authority of the County of San Luis Obispo upon the dissolution of the Redevelopment Agency of the City of Arroyo Grande. 3 The City Manager and his authorized designees are hereby authorized and directed to take such other and further actions and sign such other and further documents as is necessary and proper to implement this Resolution on behalf of the City. On motion of Council Member , seconded by Council Member , and on the following roll call vote, to wit: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this 1 om day of January, 2012. Agenda Item 11.b.Page 29 RESOLUTION NO. PAGE 3 TONY FERRARA, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: STEVEN ADAMS, CITY MANAGER APPROVED AS TO FORM: TIMOTHY J, CARMEL, CITY ATTORNEY Agenda Item 11.b.Page 30