RPVCCA_SR_2011_05_17_04_League_CA_Cities_Coalition_Against_Eliminating_RDAsCrrvOF
MEMORANDUM
RANCHO PALOS VERDES
TO:
FROM:
DATE:
SUBJECT:
REVIEWED:
Staff Coordinator:
HONORABLE MAYOR &CITY COUNCIL MEMBERS ~
DENNIS McLEAN,DIRECTOR OF FINANCE &INFORMATION
TECHNOLOGY
MAY 17,2011
REQUEST FROM LEAGUE OF CALIFORNIA CITIES FOR RANCHO
PALOS VERDES TO JOIN COALITION AGAINST ELIMINATION OF
REDEVELOPMENT AGENCIES
CAROLYN LEHR,CITY MANAGER cO--
Matt Waters,Senior Administrative Analyst
RECOMMENDATION
1.Adopt Resolution No.2011-,authorizing the City of Rancho Palos Verdes to join a
coalition of California cities opposed to elimination of redevelopment agencies.
BACKGROUND AND DISCUSSION:
Jeffrey Keirnan,Regional Public Affairs Manager for the League of California Cities
(League)recently contacted City staff regarding the proposed elimination of redevelopment
agencies (RDA)in cities and counties as called for in Governor Jerry Brown's draft
California State budget proposal.The League is strongly opposed to the Governor's plan,
opining in its coalition materials that the proposal will have a strong negative effect on jobs
and economic activity throughout the state.The League's correspondence strongly urged
the City of Rancho Palos Verdes and other cities with redevelopment agencies to join a
coalition opposing the State's proposal to end RDAs.
The League previously reached out to all RDAs to contribute to a legal defense fund to
contest the Governor's proposed plan.On April 5,2011,the City approved the League's
request for $200 which is based on the total amount of tax increment the RDA received in
2008-2009 as compared with other agencies.This was a pro-active request from the
League;if no litigation is needed,RPV's RDA contribution will be returned.
The impact of the Governor's proposal on Rancho Palos Verdes is not as significant as it is
for cities with greater RDA involvement.The RDA currently has no active projects.At this
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League of California Cities Request to Join Coalition Opposed to Abolishment of RDAs
May 17,2011
Page 2
time,all of the RDA tax increment is obligated to fund repayment of debt to Los Angeles
County and to provide affordable housing via the 20%Set-Aside.The Governor's proposal
should not affect the redevelopment agency's $6 million debt to the County of Los Angeles.
It is unclear,however,what impact the proposal might have on the $18.6 million in debt
($6.6 million in principal and $12 million in accrued interest)the RDA owes to the City.
FISCAL IMPACT
There is no financial impact resulting from joining the League's coalition.The financial
impact on Rancho Palos Verdes from the State's potential elimination of RDAs,if any,is
unknown at this time,as specific proposed legal language is not yet available.
ATTACHMENTS:
Resolution No.2011-
League of California Cities Correspondence
League of California RDA Proposal Analysis
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RESOLUTION NO.2011-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO PALOS
VERDES,AUTHORIZING THE CITY OF RANCHO PALSO VERDES JOINING
THE LEAGUE OF CALIFORNIA CITIES'COALITION OPPOSING THE
STATE'S PROPOSAL TO ABOLISH REDEVELOPMENT AGENCIES
WHEREAS,the proposed elimination of redevelopment agencies (RDA)in cities and
counties is called for in Governor Jerry Brown's draft California State budget proposal;and
WHEREAS,the City of Rancho Palos Verdes on April 5,2011 approved $200 to support
the League of California Cities'legal challenge of the proposal;and
WHEREAS,the League of California Cities has challenged the legality of the proposal;
and,
WHEREAS,the League of California Cities has indicated that the proposal could lead to
the loss of hundreds of thousands of jobs and billions in local economic activity throughout
California;and
WHEREAS,the League of California Cities has invited the City of Rancho Palos Verdes
to join a coalition of California Cities with Redevelopment Agencies to oppose this proposal;and
NOW BE IT,THEREFORE,RESOLVED BY THE CITY COUNCIL OF THE CITY OF
RANCHO PALOS VERDES:
That the City of Rancho Palos Verdes joins the League of California Cities Coalition in
opposition of the State's proposal to abolish redevelopment agencies,is approved and adopted
by the City Council.
PASSED,APPROVED,AND ADOPTED THIS 1t h DAY OF MAY 2011.
/s/Thomas D.Long
Mayor
ATTEST:
/s/Carla Morreale
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.2011-was duly and regularly passed and adopted by the said City Council at a
regular meeting thereof held on May 17,2011.
City Clerk
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From:Jeff Kiernan [mailto:jkiernan@cacities.org]
Sent:Friday,April 29,201111:46 AM
To:'bill.workman@redondo.org';'Carol Lehr,RVP';'cgraves@carson.ca.us';Dayle Keller
(dkeller@lawndalecity.org);James Mitsch (jmitsch@cityofhawthorne.org);'T Wanamaker
(twanamaker@cityofinglewood.org)'
Subject:South Bay Redevelopment
In preparation for round two of the redevelopment fight,I was just looking over the coalition list
and noticed that although your city has a redevelopment agency,you aren't listed as a member
of the coalition opposing elimination of RDAs.I'm hoping that in most cases you simply didn't
connect with me to get on the coalition list.
Please let me know if your city or RDA has passed a resolution opposing the elimination of
redevelopment so that your city/RDA can be listed as part of the coalition.To be acknowledged,
please sign the attached form and send it back or just send me a copy of the resolution your
council passed.
There is movement on several key bills,including the redevelopment proposal 5B 286 (which
will be taken up in committee on Wednesday),so I am drafting an email update to go out at the
beginning of next week following our Monday Board meeting.
Things have slowed to a crawl at the Capitol lately,but don't get used to it -it will pick up again
soon.
Jeff
Jeffrey Kiernan
Regional Public Affairs Manager
League of California Cities
8205 Santa Monica Blvd.#1-206
West Hollywood,CA 90046-5958
Cell:(310)630-7505
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Get the Facts I Protect Our Local Economy
Home Jobs at Risk In Your Community
STOP THE STATE'S REDEVELOPMENT PROPOSAL
PROTECT LOCAL JOBS AND THE ECONOMY
Get the Facts Take Action Coalition News Contact Us
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Home
Get the Facts
Download a PDF of the facts outlined below here.
As part of its 2011-12 budget proposal,the Administration has proposed permanently shutting down local redevelopment
agencies.This proposal represents more of the same misguided and illegal State budget raids of local government funds that
voters have repeatedly sought to end.It will bring little financial benefit to the State,but will permanently destroy hundreds of
thousands of jobs,billions in local economic activity and a key local tool to meet the state's infililand-use objectives.A broad
coalition of mayors,council members,local governments,business and labor,environmental leaders and affordable housing
advocates oppose the State's attempt to kill local redevelopment.Here's why:
Proposal Represents More of the Same State Raids of Local Funds that Voters Have Repeatedly and Overwhelmingly
Acted to Stop.
•The proposal to kill redevelopment represents the same old budget tactics of raiding local government funds to solve the
State's budget problems.
•In November,more than 5.7 million voters,a resounding 60.7%,voted to pass Prop.22,to stop the State from taking,
borrowing or redirecting local government funds -including local redevelopment.
•Cities and local governments want to work with the State as partners to balance the State budget and in the important effort
to realign services to the local level.But this proposal creates a toxic environment that city and other local government
officials have no choice but to oppose.
No Financial Gain,Significant Economic Pain.
The State's own numbers show that killing redevelopment will bring very little financial relief for the State.In fact,after this budget
year,the State Department ofFinance acknowledges zero State savings from shutting down redevelopment.Redevelopment
agencies have more than $87 billion in bond and other contractual obligations that legally must be repaid before revenues are
available to any other purpose.
However,killing redevelopment will cause serious and permanent economic damage at the local level.Redevelopment
activities:
•Support 304,000 jobs annually,including 170,600 construction jobs.
http://www.protectourlocaleconomy.com!get_the_facts 5/10/20114-5
Get the Facts I Protect Our Local Economy
•Contribute over $40 billion annually to California's economy in the generation of goods and services.
•Generate more than $2 billion in state and local taxes in a typical year.
Proposal Will Wipe Out a Vital Tool to Meet Infill Land-Use Objectives and to Develop Affordable Housing.
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•Eliminating redevelopment will take away one of the few tools local governments have to comply with state requirements to
plan for more compact urban development supported by transit-oriented development,housing,jobs and infrastructure.
Redevelopment agencies have the experience and tools needed to help implement the requirements of AB 32 and SB 375.
•Redevelopment is also the second largest funder of affordable housing,behind only the federal government.Over
98,000 units of affordable housing have been constructed or rehabilitated since 1993.Twenty percent of property taxes
generated from redevelopment activities must be spent on affordable housing.
Proposal is Unconstitutional and Politically Unviable.
•Shutting down redevelopment agencies is a clear violation of multiple State constitutional provisions,including Article XVI,
section 16 which requires tax increment to be paid to redevelopment agencies to repay the public cost of redevelopment
projects and Article XIII,section 25.5 (Proposition 22 --passed just last November)which explicitly prohibits the State from
taking tax increment from redevelopment agencies.
•Additionally,killing redevelopment could violate the U.S.and California constitutions which prohibit impairment of contracts.
Redevelopment agencies have more than $87 billion in contractual bond obligations,and have entered into tens of
thousands of contracts with banks,developers and bond houses.The Legislature cannot constitutionally abrogate those
contracts or unilaterally substitute a new party to replace the redevelopment agency without the consent of the other parties
to the contract.
•Jeopardizing these contractual obligations will shake investor confidence and the creditworthiness of the State and increase
state and local bonding and borrowing costs for years to come.
•Lastly,the Administration's proposal is simply unviable -shutting down 398 agencies,more than 700 project areas,
hundreds of thousands of jobs and billions of dollars in contracts and economic commitments is an ill-advised and politically
untenable prospect.
http://www.protectourlocaleconomy.com/get_the_facts 5/10/20114-6