RPVCCA_RDA_SR_2011_08_24_A_New_RDA_Adopt_Pay_ScheduleCITY OF
MEMORANDUM
RANCHO PALOS VERDES
TO:
FROM:
DATE:
SUBJECT:
REVIEWED:
HONORABLE CHAIR AND MEMBERS OF THE BOARD
CAROL LYNCH,AGENCY ATTORNEY
ROBIN HARRIS,DEPUTY AGENCY ATTORNEY
AUGUST 24,2011
COMPLIANCE WITH NEW REDEVELOPMENT LAW -ADOPTION OF
ENFORCEABLE OBLIGATION PAYMENT SCHEDULE
CAROLYN LEHR,EXECUTIVE DIRECTOR ~
Staff Coordinator:Kathryn Downs,Deputy Director of Finance &Information
Technology leo
RECOMMENDATION
Staff recommends that the Redevelopment Agency ("Agency")adopt Resolution No.2011-
,adopting an Enforceable Obligation Payment Schedule.
EXECUTIVE SUMMARY
The Community Redevelopment Association and the League of California Cities filed a
lawsuit against the state on the basis that recently adopted redevelopment law (AS X1 26
and AS X1 27)is unconstitutional.
On August 11,2011,the California Supreme Court issued a stay of AS X1 27 which
includes Part 1.9 of the Community Redevelopment Law.Part 1.9 allows a city to make
payments in order to participate in the Voluntary Alternative Redevelopment Program
(VARP),with the first payment due in part on January 15,2012.The VARP,if adopted,
exempts an agency from the provisions of Parts 1.8 and 1.85. However,the Court also
granted a partial stay of AS X1 26,which added Parts 1.8 and 1.85..
On August 16,2011,the City adopted Ordinance No.524 to participate in the VARP.
On August 17,2011,the California Supreme Court modified its stay The modified stay
includes Part 1.85 (agency dissolution),but does not include Part 1.8 (agency prohibitions
and responsibilties).
As a result,Staff is recommending that the Agency comply with provisions of Part 1.8,
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COMPLIANCE WITH NEW REDEVELOPMENT LAW -ADOPTION OF
ENFORCEABLE OBLIGATION PAYMENT SCHEDULE
August 24,2011
Page 2 of 3
since the exemption provided by Part 1.9 is currently subject to the stay.
The action included with this report is to adopt an Enforceable Obligation Payment
Schedule.This is a procedural matter,and does not have a fiscal impact to the Agency or
City.
The stay granted by the Supreme Court has raised numerous questions and issues.Even
though the Council has adopted Ordinance No.524 to participate in the VARP,the stay
means that the Agency will still be subject to the prohibitions and requirements set forth in
Part 1.8 during the time the stay is in effect.This includes adopting an Enforceable
Obligation Payment Schedule,and the prohibition against the Agency entering into any
new contracts.In addition,the stay raises the question of whether Ordinance No.524
might need to be re-adopted after the stay is lifted.
BACKGROUND
AB X1 26,which was signed by the Governor of California on June,29,2011,added Parts
1.8 and 1.85 to the Community Redevelopment Law.Part 1.8 immediately suspends most
redevelopment agency activities and,among other things,prohibits redevelopment
agencies from incurring indebtedness or entering into or modifying contracts.Part 1.85
provides that on October 1,2011,all existing redevelopment agencies and redevelopment
agency components of community development agencies are dissolved,and successor
agencies are designated as successor entities to the former redevelopment agencies.Part
1.85 imposes numerous requirements on the successor agencies and subjects successor
agency actions to the review of oversight boards established under Part 1.85.
AB X1 27 was signed by the Governor concurrently with AB X1 26 and added Part 1.9 to
the Community Redevelopment Law.Part 1.9 establishes a Voluntary Alternative
Redevelopment Program ('VARP")whereby a redevelopment agency will,notwithstanding
Parts 1.8 and 1.85,be authorized to continue to exist and carry out the provisions of the
Community Redevelopment Law.To opt into the VARP,a city must adopt an ordinance by
which the city agrees to make specified annual payments to the county auditor-controller
for allocation to special districts and educational entities.The City Council adopted its "opt-
in"Ordinance on August 16,2011.
LEGAL ANALYSIS
Part 1.9 provides that if a city council timely opts into the VARP,then the agency will be
exempt from the provisions of Parts 1.8 and 1.85.One requirement,set forth in Section
34169 of Part 1.8,is for an agency to adopt an Enforceable Obligation Payment Schedule
by August 28th
.Section 34167 of Part 1.8 provides that after August 28 th ,an agency cannot
make a payment (except for bonds)unless the payment is listed in an adopted enforceable
obligation payment schedule.
Because the City Council adopted its opt-in ordinance on August 16th ,the Agency should
be exempt from the requirement to adopt and adhere to an Enforceable Obligation
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COMPLIANCE WITH NEW REDEVELOPMENT LAW -ADOPTION OF
ENFORCEABLE OBLIGATION PAYMENT SCHEDULE
August 24,2011
Page 3 of 3
Payment Schedule.However,as discussed below,on account of the modified stay that
was granted by the California Supreme Court in connection with the lawsuit challenging the
constitutionality of AB X1 26 and 27,Staff now recommends that the Agency adopt an
Enforceable Obligation Payment Schedule.
The California Redevelopment Association and League of California Cities have filed a
lawsuit in the Supreme Court of California alleging that AB X1 26 and AB X1 27 are
unconstitutional.On August 11,2011,the Supreme Court of California decided to hearthe
case and set a briefing schedule designed to allow the Supreme Court to decide the case
before January 15,2012.On August 11,2011,the Supreme Court also issued a stay
order,which was subsequently modified on August 17,2011.Pursuant to the modified stay
order,the Supreme Court granted a stay of all of AB X1 27 (Le.Part 1.9),except for Health
and Safety Code Section 34194(b)(2)(relating to the determination of cities'fiscal year
2011-12 remittance amounts)and a partial stay of AB X1 26.With respect to AB X1 26,
Part 1.85 was stayed,in its entirety,but Part 1.8 (including Health and Safety Code
Sections 34167 and 34169)was not stayed.Accordingly,Staff now recommends that the
Agency adopt and adnere to an Enforceable Obligation Payment Schedule.
The Enforceable Obligation Payment Schedule attached to this Staff Report lists all of the
Agency's enforceable obligations and includes certain information about each obligation,
including the amount of payments obligated to be made,by month,through December
2011.As defined in Section 34167,an "enforceable obligation"includes (A)bonds issued
by an agency (including debt service,reserve set-asides,and any other payments required
by the bond documents);(B)loans incurred for a lawful purpose,including moneys
borrowed from the Low and Moderate Income Housing Fund,to the extent they are legally
required to be repaid pursuant to a required repayment schedule or other mandatory loan
terms;(C)payments required by the Federal Government,pre-existing obligations to the
State,or obligations imposed by State law,or legally enforceable payments required in
connection with an agency's employees,including pension payments and unemployment
payments;(D)jUdgments or settlements entered by a court or binding arbitration decisions;
(E)any legally binding and enforceable contract that is not otherwise void as violating the
debt limit or public policy;and (F)contracts necessary for the administration or operation of
an agency to the extent permitted by AB X1 26.
The California Department of Finance (the "DOF")and the State Controller can require the
Agency to provide them with documents that are associated with the Agency's enforceable
obligations.Any taxing entity,the DOF and the State Controller all will have standing to file
a judicial action to prevent a violation under Part 1.8 and to obtain injunctive or other
appropriate relief.
FISCAL IMPACT
There is no fiscal impact.Adoption of the Enforceable Obligation Payment Schedule will
authorize the Agency to pay its enforceable obligations after August 28,2011.
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RESOLUTION NO.RDA 2011-
A RESOLUTION OF THE RANCHO PALOS VERDES
REDEVELOPMENT AGENCY ADOPTING AN ENFORCEABLE
OBLIGATION PAYMENT SCHEDULE PURSUANT TO PART 1.8 OF
DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE
AND TAKING CERTAIN ACTIONS IN CONNECTION THEREWITH
RECITALS:
A.The Rancho Palos Verdes Redevelopment Agency (the "Agency")is a
redevelopment agency in the City of Rancho Palos Verdes (the "City"),created pursuant
to the Community Redevelopment Law (Part 1 (commencing with Section 33000)of
Division 24 of the California Health and Safety Code)(the "Redevelopment Law").
B.The City Council of the City (the "City Council")adopted Ordinance
No.190,approving and adopting the redevelopment plan for Project Area No.1,and
from time to time,the City Council has amended such redevelopment plan.The Agency
is undertaking a program to redevelop the Project"Area.
C.AB X1 26 was signed by the Governor of California on June 29,2011,
making certain changes to the Redevelopment Law,including adding Part 1.8
(commencing with Section 34161)and Part 1.85 (commencing with Section 34170)to
Division 24 of the California Health and Safety Code.Commencing upon the
effectiveness of AB X1 26,AB X1 26 suspends most redevelopment agency activities
and,among other things,prohibits redevelopment agencies from incurring indebtedness
or entering into or modifying contracts.Effective October 1,2011,AB X1 26 dissolves
all existing redevelopment agencies and redevelopment agency components of
community development agencies,designates successor agencies to the former
redevelopment agencies,imposes numerous requirements on the successor agencies
and subjects successor agency actions to the review of oversight boards established
pursuant to the provisions of Part 1.85.
D.Health and Safety Code Section 34169,which is setforth in Part 1.8,
requires a redevelopment agency to adopt an enforceable obligation payment schedule
within 60 days of the June 29,2011 effective date of Part 1.8.The enforceable
obligation payment schedule must list all of the obligations that are enforceable within
the meaning of Health and Safety Code Section 34167(d)and include specific
information about each obligation.
E.Health and Safety Code Section 34167(h),which is set forth in Part 1.8,
provides that a redevelopment agency shall not make a payment unless it is listed in an
adopted enforceable obligation payment schedule,other than payments required to
meet obligations with respect to bonded indebtedness,after the enforceable obligation
payment schedule is adopted pursuant to Health and Safety Code Section 34169,or
after 60 days from the effective date of Part 1.8 (Le.,August 28,2011)whichever is
sooner.
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F.AS X1 27 was signed by the Governor of California on June 29,2011,
adding Part 1.9 (commencing with Section 34192)to Division 24 of the California Health
and Safety Code.Part 1.9 establishes an Alternative Voluntary Redevelopment
Program whereby,notwithstanding the provisions of Part 1.8 and Part 1.85,a
redevelopment agency will be authorized to continue to exist and carry out the
provisions of the Redevelopment Law upon the enactment,prior to the applicable
deadline established in Part 1.9 (with the earliest deadline being October 1,2011),by
the city council of the city which includes that redevelopment agency of an ordinance to
comply with Part 1.9.Pursuant to Health and Safety Code Section 34192,if a city
participates in the Alternative Voluntary Redevelopment Program and complies with all
requirements and obligations contained in Part 1.9,the redevelopment agency in that
city will be exempt from Part 1.8 and Part 1.85.
G.The California Redevelopment Association and League of California Cities
have filed a lawsuit in the Supreme Court of California alleging that AS X1 26 and AS
X1 27 are unconstitutional.On August 11,2011,the Supreme Court of California
decided to hear the case and set a briefing schedule designed to allow the Supreme
Court to decide the case before January 15,2012.On August 11,2011,the Supreme
Court also issued a stay order,which was subsequently modified on August 17,2011.
Pursuant to the modified stay order,the Supreme Court granted a stay of all of AS X1
27 (Le.,Part 1.9),except for Health and Safety Code Section 34194(b)(2)(relating to
the determination of cities'fiscal year 2011-12 remittance amounts)and a partial stay
of AS X1 26.With respect to AS X1 26,Part 1.85 was stayed in its entirety,but Part 1.8
(including Health and Safety Code Sections 34167 and 34169)was not stayed.
Accordingly,the Agency desires to adopt an Enforceable Obligation Payment Schedule.
NOW,THEREFORE,THE RANCHO PALOS VERDES REDEVELOPMENT
AGENCY HEREBY FINDS,DETERMINES,RESOLVES AND ORDERS AS FOLLOWS:
Section 1.The above recitals are true and correct and are a substantive part
of this Resolution.
Section 2.This Resolution is adopted pursuant to Health and Safety Code
Section 34169.
Section 3.The Agency hereby adopts the enforceable obligation payment
schedule attached as Exhibit A to this Resolution and incorporated herein by reference
(the "Enforceable Obligation Payment SchedUle").
Section 4.The Agency Secretary is hereby authorized and directed to post the
Enforceable Obligation Payment Schedule on the City's Internet Web site
www.palosverdes.com/rpv.
Section 5.The Enforceable Obligation Payment Schedule may be amended
from time to time at any public meeting of the Agency.Amendments shall be posted to
the Internet Web site described in Section 4,above,for at least three business days
before a payment may be made pursuant to an amendment.
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Section 6.The Agency Secretary is hereby authorized and directed to transmit
a copy of the Enforceable Obligation Payment Schedule by mail or electronic means to
the County Auditor-Controller,the State Controller,and the California Department of
Finance (the "Department of Finance").A notification providing the Internet Web site
location of the posted Enforceable Obligation Payment Schedule and notifications of
any amendments will suffice.
Section 7.The officers and staff of the Agency are herby authorized and
directed,jointly and severally,to do any and all things which they may deem necessary
or advisable to effectuate this Resolution,including providing documents associated
with the Statement of Enforceable Obligations to the Department of Finance and the
State Controller in the manner of their choosing,and any such actions previously taken
by such officers are hereby ratified and confirmed.
Section 8.The Agency hereby designates the Director of Finance &
Information Technology as the official to whom the Department of Finance may make
requests for review in connection with the Enforceable Obligation Payment Schedule
and who shall provide the Department of Finance with the telephone number and e-mail
contact information for the purpose of communicating with the Department of Finance ..
Section 9.The adoption of the Enforceable Obligation Payment Schedule is
not intended and shall not constitute a wavier by the Agency of any rights the Agency
may have to challenge the legality of all or any portion of AS X1 26 or AS X1 27 through
administrative or judicial proceedings.
Section 10.At such time as the Agency becomes exempt from Parts 1.8 and
1.85,the Agency shall no longer be bound by the Enforceable Obligation Payment
Schedule.
Section 11.This Resolution has been reviewed with respect to applicability of
the California Environmental Quality Act ("CEQA"),the State CEQA Guidelines
(California Code of Regulations,Title 14,Sections 15000 et seq.,hereafter the
"Guidelines"),and the Agency's environmental guidelines.The Agency has determined
that this Resolution is not a "project"for purposes of CEQA,as that term is defined by
Guidelines Section 15378,because this Resolution is an organizational or
administrative activity that will not result in a direct or indirect physical change in the
environment.(Guidelines Section 15378(b)(5)).
PASSED AND ADOPTED this 24 th day of August,2011.
Chair
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ATTEST:
Agency Secretary
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Name of Redevelopment Agency:Rancho Palos Verdes Redevelopment Agency
Project Area(s).!.P...!.ro~iEe~ct~A~re=a.!.N~0~....!.1 _
ENFORCEABLE OBLIGATION PAYMENT SCHEDULE
Per AS 26 -Section 34167 and 34169
Exhibit A
Total Payments by MonthOutstandingDebTotalDueDuring
Project Name I Debt Obligation Payee Description or Oblioation Fiscal Year Aug Sept Oct Nov Dec Total
Restructured debt to abate active landslides
1 1997 Tax Increment Bond County of Los Angeles within the Project Area 5,165,000.00 355,750.00 0.00 0.00 0.00 0.00 229,125.00 $229,125.00
Accrued interest on original debt to abate
2 1997 Deferred Interest Debt County of Los Angeles active landslides in the Project Area 796,601.47 TBD(1 0.00 0.00 0.00 0.00 TBD(1 $-
Loan from City to abate active landslides in
3 Consolidated Loan from City Citv of Rancho Palos Verdes the Project Area 16,566,165.88 0.00 0.00 0.00 0.00 0.00 0.00 $-
Tax Sharing Agreement for Fire Los Angeles County Fire
4\Protection Protection District Fire protection services NlA TBD(2 TBD(2 TBD(2 TBD(2\TBD(2 TBD(2 $-
5\Properly Tax Administration Fees Countv of Los Angeles Administration of the pr0P6r1y tax increment N/A TBD(3 0.00 0.00 0.00 0.00 TBD(3 $-
6 Contract for Audit Diehl,Evans &Co.,LLP Independent audit of financial statements 9,400.00 9,400.00 0.00 3,133.33 3,133.33 3,133.34 0.00 $9,400.00
Abalone Cove Landslide Properly assessment for parcels owned by
7\Abalone Cove Properly Assessment Abatement District Agency 0.00 7,008.41 0.00 0.00 0.00 0.00 0.00 $-
Klondike Canyon Landslide Properly assessment for parcels owned by
8\Klondike Canyon Properly Assessment Abatement District Agency 0.00 10,967.72 0.00 0.00 0.00 0.00 0.00 $-
Richards,Watson &
9\Contract for Agency Attorney Gershon Legal services N/A 10,000.00 833.33 833.33 833.33 833.33 833.33 $4,166.65
10 $-
11\$-
12\$-
13\$-
14\$-
15\$-
16 $-
17 $-
16 $-
19 $-
20 $-
21 $-
22 $-
23 $-
24 $-
25 $
26 $-
27 $-
28 $-
29 $-
30)$-
Totals 1$24,541,167.3511 $393,126.1311 $633.3311 $3,966.6611 $3,966.6611 $3,966.6711 $229,958.331 $242,691.65
(1)To Be Determined -The County of Los Angeles impounds Agency tax increment to repay the debt to the County.Each December 2nd,after making the scheduled Tax Increment Bond payments,the remaining amount of
impounded tax increment is applied to the Deferred Interest Debt.
(2)To Be Determined -The Tax Sharing Agreement stipulates that 17%of gross tax increment is to be passed thru to the County Fire Protection District.
(3)To Be Determined -Properly Tax Administration Fees are determined by the County of Los Angeles.The Agency typically receives notice of the fee amount in December of each year.
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