HomeMy WebLinkAbout2011 043 CC RESO CITY OF BALDWIN PARK
RESOLUTION NO. 2011-043
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF BALDWIN PARK APPROVING A REMITTANCE
AGREEMENT WITH THE COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF BALDWIN PARK IN
ACCORDANCE WITH ASSEMBLY BILL AB X1 27
WHEREAS, the Community Development Commission of the City of Baldwin
Park (the "CDC") administers the implementation of various redevelopment projects,
programs, and activities within the redevelopment project areas in the City of Baldwin
Park (the "City"); and
WHEREAS, on June 15, 2011, the State Legislature passed Assembly Bill X1 26
("AB 26") and Assembly Bill X1 27 ("AB 27"), and on June 28, 2011, Governor Edmund
G. Brown Jr. signed AB 26 and AB 27; and
WHEREAS, AB 26 generally prevents redevelopment agencies from entering
into new or amended obligations or contracts, and eliminates redevelopment agencies
and winds down their operations; and
WHEREAS, AB 27 allows redevelopment agencies to remain in existence, and to
gain an exemption from the provisions of AB 26, in exchange for the payment of
substantial sums of money on an annual basis to the Los Angeles County Auditor-
Controller (County Auditor); and
WHEREAS, AB 27 codified Part 1.9 of Division 24 of the California Health and
Safety Code ("Part 1.9"), which now comprises a portion of the California Community
Redevelopment Law; and
WHEREAS, AB 27 establishes a "voluntary alternative redevelopment program"
("Alternative Program"), whereby the CDC is authorized to continue to exist upon the
City's enactment of an ordinance to comply with the provisions of Part 1.9; and
WHEREAS, AB 27 provides that, in order to enable the CDC to be included in
the Alternative Program, the City must notify the County Auditor, the State Controller,
and the State Department of Finance, on or before November 1, 2011, that the City will
comply with the provisions of Part 1.9 by adoption of an ordinance consistent with Part
1.9; and
WHEREAS, the City Council has adopted Ordinance No. 1347 to comply with
Part 1.9 ("Ordinance") and notified the County Auditor, the State Controller and the
State Department of Finance of its adoption; and
WHEREAS, AB 27 requires the City to make specified remittances to the County
Auditor in order to continue the existence of the CDC, as prescribed in Part 1.9 and the
Ordinance; and
WHEREAS, Section 34194.2 of AB 27 authorizes the CDC to enter into an
agreement with the City, whereby the CDC will transfer a portion of its tax increment to
the City, in an amount not to exceed the amount of the City's annual remittance to the
County Auditor ("Remittance Agreement"), for the purpose of financing activities within
the City's redevelopment area that are related to accomplishing the CDC's project
goals; and
WHEREAS, the purpose of the Remittance Agreement is to provide for the
transfer of funds by the CDC to the City in an amount not to exceed the amount of the
remittance payments required by Part 1.9, utilizing net available tax increment and other
funds in this current fiscal year and forthcoming fiscal years; and
WHEREAS, the validity of AB 26 and AB 27 is being challenged in a lawsuit
entitled California Redevelopment Association, et al. v. Matosantos, et al., California
Supreme Court Case No. S194861 (the "CRA Lawsuit") and other lawsuits challenging
the validity of AB 26 and AB 27 may be filed; and
WHEREAS, pending a decision on the merits in the CRA Lawsuit, the California
Supreme Court has stayed the effectiveness of portions of AB 26 and AB 27, including,
but not limited to, Sections 34194, 34194.1 and 34194.2; and
WHEREAS, it is the intention of the City for the Remittance Agreement to
become effective only if and when the stay ordered by the California Supreme Court in
the CRA Lawsuit has been lifted or dissolved; provided, however, if the decision on the
merits in the CRA Lawsuit or any other lawsuit challenging the validity of AB 26 and/or
27 is that provisions of AB 27 authorizing the making of remittances to the County
Auditor are invalid for any reason, this Agreement shall be null and void and of no
effect; and
WHEREAS, the City Council has reviewed and duly considered the Staff Report,
documents and other evidence presented at the meeting and believes that it will be in
the best interest of the City and the health, safety, morals and welfare of its residents,
and in accord with the public purpose and provisions of applicable state and local law
and requirements, for the City to enter into a Remittance Agreement with the CDC and
to allow the CDC to participate in the Alternative Program.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF BALDWIN PARK AS FOLLOWS:
SECTION 1. The above recitals are true and correct and incorporated herein by
this reference.
SECTION 2. The City Council hereby approves the Remittance Agreement
attached hereto as Exhibit "A" and incorporated herein by this reference.
SECTION 3. The Mayor, or designee, is authorized on the City's behalf, to
execute the Remittance Agreement.
SECTION 4. The Mayor, or designee, is authorized, on the City's behalf, to
execute and deliver all other documents and take all actions necessary and appropriate
to facilitate the CDC's continued participation in the Alternative Program, after the City
has enacted the Ordinance and while the Ordinance remains in effect.
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PASSED, APPROVED, AND ADOPTED BY THE CITY COUNCIL OF THE
CITY OF BALDWIN PARK THIS 28TH DAY OF SE•TEM:ER 2011.0
a
•eI Lozano, Mayor
Attest: /
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/A/� t�
Alej r Avila, City Clerk
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EXHIBIT "A"
REMITTANCE AGREEMENT
THIS REMITTANCE AGREEMENT("AGREEMENT")is made and entered into on
September 28, 2011, by and between the CITY OF BALDWIN PARK, a municipal
corporation (the "City"), and the COMMUNITY DEVELOPMENT COMMISSION OF THE
CITY OF BALDWIN PARK, a public body, corporate and politic(the"CDC"),with reference
to the following facts:
RECITALS
WHEREAS, Assembly Bills X1 26 ("AB 26") and X1 27 ("AB 27") were passed by
the State Legislature on June 15, 2011, and signed by the Governor on June 28, 2011.
WHEREAS, upon enactment, AB 27 codified Part 1.9 of Division 24 of the
California Health and Safety Code, commencing with section 34192 ("Part 1.9");
WHEREAS, AB 27 established a "voluntary alternative redevelopment program"
whereby the City may choose to continue the operation of the CDC pursuant to Part 1.9,
upon the enactment of an ordinance by the City to comply with the provisions of Part 1.9
and make certain remittances described in California Health and Safety Code Section
34194 to the Los Angeles County Auditor-Controller ("County Auditor"). All section
references in this Agreement are to the California Health and Safety Code, unless
otherwise specified;
WHEREAS, the City Council of the City(the"City Council") has adopted Ordinance
No. 1347 (the"Ordinance"), committing to comply with and make the remittances required
by Part 1.9 and continue the existence and activities of the CDC after enactment of AB 27;
WHEREAS, pursuant to Section 34194.1, in making remittances to the County
Auditor pursuant to Section 34194, the City may use any available funds not otherwise
obligated for other uses;
WHEREAS, pursuant to Section 34194.2,the City may enter into an agreement with
the CDC, whereby the CDC will transfer a portion of its tax increment to the City, in an
amount not to exceed the annual remittance required each year pursuant to Chapter 3 of
Part 1.9, for the purpose of financing activities within the redevelopment area that area that
are related to accomplishing the CDC's project goals;
WHEREAS, the purpose of this Agreement is to provide for the transfer of funds
pursuant to Section 34194.2 to enable the City to make the remittances required by Part
1.9;
WHEREAS, the obligations of the CDC under this Agreement shall constitute an
indebtedness of the CDC for the purpose of carrying out the redevelopment plan for the
redevelopment project areas, as currently constituted or as it may be amended;
WHEREAS,the validity of AB 26 and AB 27 is being challenged in a lawsuit entitled
California Redevelopment Association, et al. v. Matosantos, et aL, California Supreme
Court Case No. S194861 (the"CRA Lawsuit")and other lawsuits challenging the validity of
AB 26 and AB 27 may be filed;
WHEREAS, pending a decision on the merits in the CRA Lawsuit, the California
Supreme Court has stayed the effectiveness of portions of AB 26 and AB 27, including, but
not limited to, Sections 34194, 34194.1 and 34194.2; and
WHEREAS, it is the intention of the City and the CDC for this Agreement to become
effective only if and when the stay ordered by the California Supreme Court in the CRA
Lawsuit has been lifted or dissolved; provided, however, if the decision on the merits in the
CRA Lawsuit or any other lawsuit challenging the validity of AB 26 and/or 27 is that
provisions of AB 27 authorizing the making of remittances to the County Auditor are invalid
for any reason, this Agreement shall be null and void and of no effect.
NOW, THEREFORE, the City and CDC mutually agree as follows:
1. EFFECT OF RECITALS.
The recitals above are an integral part of this Agreement and set forth the intentions
of the Parties and the premises on which the Parties have decided to enter into this
Agreement.
2. OBLIGATIONS OF THE PARTIES.
A. For purposes of this Agreement, the term "Net Available Tax
Increment" means any tax increment funds allocated to the CDC, net of (1) existing debt
service payments, (2) existing third-party contractual obligations, and (3) any funds on
deposit in or to be deposited in the CDC's Low and Moderate Income Housing Trust Fund
("Housing Fund"). Notwithstanding the foregoing definition, for the purpose of making the
remittance payments for the 2011-2112 Fiscal Year only, "Net Available Tax Increment"
includes tax increment funds to be allocated for the 2011-2012 Fiscal Year to the Housing
Fund pursuant to Sections 33334.2, 33334.4 and 33334.6 to the extent the CDC makes a
finding that there are insufficient other moneys to meet its debt and other obligations,
current priority program needs or its obligation to transfer funds to the City under Section
34194.2 or pursuant to this Agreement.
B. The CDC shall transfer to the City Net Available Tax Increment or
other funds which will be used by the City to make the remittance payments required by
Part 1.9 and due in equal installments on January 15 and May 15 of each fiscal year. The
amount transferred to the City in each fiscal year shall not exceed the amount required for
the City to pay the remittance amount for that fiscal year determined by the State Director
of Finance pursuant to Part 1.9. The transfers shall be made in two installments each year
to coincide with the January 15 and May 15 due dates for the installments of the remittance
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payments.
C. The City shall timely remit to the County Auditor the payments required
by Part 1.9 as provided by the Ordinance. The City's obligation to make such remittances
shall be a special limited obligation of the City payable solely from Net Available Tax
Increment or any other available funds. Nothing contained in this Agreement shall be
deemed to be a pledge of the City's general fund revenues or other assets to make the
remittance payments contemplated by Part 1.9. The City may choose to fund the
remittance payments solely from CDC funds and assets and is not obligated to use other
funds to make those payments.
D. The obligations of the CDC under this Agreement shall be payable in
the first instance out of Net Available Tax Increment, as defined in the above recitals
and/or as defined or provided in any applicable constitutional provision, statute or other
provision of law now existing or adopted in the future, levied by or for the benefit of taxing
agencies in the CDC's redevelopment project areas, and allocated to the CDC and/or any
lawful successor entity of the CDC and/or any entity established by law to carry out the
redevelopment plan for the redevelopment project areas and/or expend tax increment or
pay indebtedness of the CDC to be repaid with tax increment, pursuant to Section 33670
or any applicable constitutional provision, statute or other provision of law now existing or
adopted in the future. If Net Available Tax Increment in a given fiscal year is insufficient to
pay the entire amount of the remittance payment, then the CDC may also transfer to the
City income received by the CDC from its projects and programs or any other additional
funds available to it.
3. LIABILITY AND INDEMNIFICATION.
In contemplation of the provisions of California Government Code section 895.2
imposing certain tort liability jointly upon public entities solely by reason of such entities
being parties to an agreement as defined by Government Code section 895, each of the
Parties, as between themselves, pursuant to the authorization contained in Government
Code sections 895.4 and 895.6, shall each assume the full liability imposed upon it, or any
of its officers, agents or employees, by law for injury caused by negligent or wrongful acts
or omissions occurring in the performance of this Agreement to the same extent that such
liability would be imposed in the absence of Government Code section 895.2. To achieve
the above-stated purpose, each Party indemnifies, defends and holds harmless the other
Party for any liability, losses, costs or expenses that may be incurred by such other party
solely by reason of Government Code section 895.2.
4. RESERVATION OF RIGHTS; EFFECTIVE DATE; TERMINATION FOR
INVALIDITY OF AB 27.
By this Agreement, the City is not warranting or guaranteeing the payment of money
to any other entity, and the City reserves the right to cease making the payments required
by AB 27 if the amount of such payments (as determined by the Department of Finance)
prove to be in excess of the available funds not otherwise obligated for other uses or for
any other reason as determined by the City Council. Moreover,this Agreement shall in no
way be construed as requiring the City to abide by AB 26 or AB 27 in the event either, or
both, bills are found unconstitutional or otherwise legally invalid in whole or in part, nor shall
this Agreement have the effect or give rise to any waiver of rights or remedies the City or
CDC may have, whether in law or in equity, to challenge AB 26 or AB 27. This Agreement
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shall not be construed as the City's or CDC's acceptance of, or concurrence with, either AB
26 or AB 27, nor does this Agreement evidence any assertion or belief whatsoever on the
part of the City those bills are constitutional or lawful or satisfy any legitimate public
purpose.
While the City intends to make the remittances as provided for in AB 27 and
pursuant to this Agreement, the remittances shall be made under protest and without
prejudice to the City's right to recover such amounts and interest thereon, to the extent
there is a final determination by a court of competent jurisdiction that AB 26 or AB 27, or
both, are unconstitutional or otherwise unlawful. The City and the CDC reserve the right,
regardless of any remittance made pursuant to this Agreement,to challenge the legality of
AB 26 or AB 27, or both.
The CRA Lawsuit and/or other actions challenging the validity of AB 26 and AB 27
has, or have been, or may be filed on behalf of cities, counties or redevelopment agencies.
In the CRA Lawsuit, the California Supreme Court has issued a stay of the effectiveness
of portions of AB 26 and AB 27. Until and unless the stay issued by the California
Supreme Court has been lifted or dissolved,this Agreement shall not become effective,the
City shall not be obligated to make any community remittance for the duration of such stay
and the CDC shall not be obligated to remit funds to the City to enable the City to make
such payments. Moreover, to the extent the California Supreme Court or any court of
competent jurisdiction determines the provisions of AB 27 regarding the making of
remittances to the County Auditor, or anyone else, are invalid for any reason, this
Agreement shall be deemed null and void and of no further force and effect when all
petitions for rehearing and appeals from such determination are exhausted or
unsuccessful, or time for filing petitions for rehearing and appeals therefrom has lapsed.
5. ENTIRE AGREEMENT; WAIVERS; AND AMENDMENTS.
A. This Agreement shall be executed in duplicate originals, each of which
is deemed to be an original. This Agreement constitutes the entire understanding and
agreement of the Parties with respect to the subject matter hereof.
B. This Agreement integrates all of the terms and conditions mentioned
herein or incidental hereto, and supersedes all negotiations or previous agreements
between the parties with respect to the subject matter of this Agreement.
C. This Agreement is intended solely for the benefit of the City and the
CDC. Notwithstanding any reference in this Agreement to persons or entities other than
the City and the CDC, there shall be no third party beneficiaries under this Agreement.
D. Any waiver or amendment of the provisions of this Agreement must be
in writing and signed by the authorized representative of the parties.
6. SEVERABILITY.
If any term, provision, covenant or condition of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, then the remainder of the
provisions of this Agreement shall continue in full force and effect unless the rights and
obligations of the Parties have been materially altered or abridged by such invalidation,
voiding or unenforceability.
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7. BINDING ON SUCCESSORS.
This Agreement shall be binding on and shall inure to the benefit of all
successors and assigns of the Parties, whether by agreement or operation of law. This
Agreement shall survive any full or partial merger of the City and the CDC and shall remain
in full force and effect and be fully enforceable according to its terms.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, the day and year first-above written.
"CITY" "CDC"
CITY OF BALDWIN PARK COMMUNITY DEVELOPMENT
COMMISSION OF THE CITY OF
B r LDWIN PARK
By illa
l -- By A;,-.1%,..Varilis���
Manue %.zano, Mayor Lozano, Chair
ATTEST: / / ATTES "/I
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Alejandra ila, City Clerk Alejand'. Avila, Commission Secretary
APPROVED AS TO FORM: APPROVED AS TO FORM:
III A
a _■ 40-fr 1 11, zA...9L__.,._
J./p annone, City Attorney I. :ph W. Pannone, Commission Counsel
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