CC RES 2015-082 RESOLUTION NO. 2015-82
A RESOLUTION OF THE CITY COUNCIL OF RANCHO
PALOS VERDES OPPOSING ASSEMBLY BILL NO. 113
(AB 113) REGARDING REDEVELOPMENT DISSOLUTION
THE CITY COUNCIL OF THE CITY OF RANCHO PALOS VERDES DOES FIND
AS FOLLOWS:
WHEREAS, in 2011 the Legislature enacted AB 1X 26 which dissolved
redevelopment agencies formed under the Community Redevelopment Law; and,
WHEREAS, in 2012 the Legislature amended AB 1X 26 by enacting AB 1484
which required successor agencies to make three payments for the benefit of taxing
entities; and,
WHEREAS, AB 1484 included certain statutory provisions that were intended to
provide incentives for the prompt and accurate submittal of these three payments by the
successor agencies to the former redevelopment agencies; and,
WHEREAS, one of these incentives allowed a successor agency's oversight board
to approve the reinstatement of loan agreements, including the payment of accrued
interest, between the city or county and the former redevelopment agency which had
previously had been made unlawful by the terms of AB 1X 26; and,
WHEREAS, subsequent to the enactment of AB 1484, approximately 85% of
successor agencies made the three payments required by AB 1484 and received
Findings of Completion; and,
WHEREAS, the oversight boards of many of these successor agencies approved
the reinstatement of loan agreements at the interest rate provided for in AB 1484 only to
have those actions disapproved by the Department of Finance; and,
WHEREAS, the Sacramento County Superior Court has rejected the Department
of Finance's interpretation of the phrase "loan agreement" and method of calculating the
interest rate (i.e., the Watsonville and Glendale cases); and,
WHEREAS, the Department of Finance, in AB 113, is attempting to reverse and
revise these key provisions of the dissolution laws offered to local agencies as incentives
for making the required payments and resolving other issues with the Department of
Finance; and,
WHEREAS, in addition to undoing the promises made to local agencies in AB
1484, AB 113 contains several provisions that would tip the balance on matters of
interpretation of dissolution laws even further by exempting the Department of Finance
from the Administrative Procedures Act and eliminating language in the law that was
previously agreed to by the Department of Finance and the Legislature in 2012 that
enabled successor agencies to fund legal representation in the only due process forum
where Department of Finance staff decisions could be reviewed—Sacramento County
Superior Court.
NOW, THEREFORE, the City Council of the City of Rancho Palos Verdes does
hereby resolve as follows:
Section 1. As locally elected legislators, we are committed to abiding by the
promises we make. We urge the State Legislature to do the same by defeating AB 113
which breaks the promises the Legislature made to local agencies in the enactment of
AB 1484.
Section 2. One of the purposes of our court system is to adjudicate the meaning
and application of statutory enactments. We urge the State Legislature to accept the
decisions of the Sacramento County Superior Court in the Watsonville (definition of"loan
agreement") and Glendale (methodology for calculating interest rate) cases and defeat
AB 113, which seeks to reverse both of these court decisions.
Section 3. We further urge the State Legislature to defeat AB 113 because it
unfairly denies access to the court system for successor agencies by disallowing funding
for legal representation.
Section 4. With respect to the City of Rancho Palos Verdes, AB 113 will have
an approximate $340,537 adverse financial impact with respect to the accrued interest
owed the City on its $12,047,891 loan (principal and interest at June 30, 2015) to its
former redevelopment agency. Based on the current AB 1484, it has been the City's
position that historic Local Agency Investment Fund (LAIF) rates would be applied over
the life of the loan (i.e., since 1990) in order to calculate the interest owed to the City. The
Department of Finance has maintained that the appropriate LAIF rate is the LAIF rate that
was in effect at the time the Oversight Board made a finding that the loan was made for
legitimate redevelopment purposes. As indicated above, in the Glendale case the
Sacramento County Superior Court disagreed with the Department of Finance's position.
Pursuant to AB 113, the interest rate to be applied is 3%. Based upon the difference in
calculating the accrued interest on the City loan using a 3% interest rate as opposed to
historical LAIF rates, the City estimates that instead of receiving roughly $5,300,000 in
interest it will receive just under$5,000,000.
Section 5. The provisions of AB 113 that are described as "streamlining" do not
offset the negative impact of the provisions discussed in this resolution.
Resolution No. 2015-82
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PASSED, APPROVED and ADOPTED this 18th day of August 2015.
ir (! ror
ATTEST:
AP-C,C6-2 (
City Clerk
State of California )
County of Los Angeles ) ss
City of Rancho Palos Verdes )
I, Carla Morreale, City Clerk of the City of Rancho Palos Verdes, hereby
certify that the above Resolution No. 2015-82, was duly and regularly passed and
adopted by the said City Council at a regular meeting thereof hel• .•n August 18, 2015.
City Clerk
Resolution No. 2015-82
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