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08-23-2011 - Approval of Resolutions and Ordinance Pursuant to - Item 1 (2).pdfCity of West Covina Memorandum AGENDA ITEM NO. 1 DATE August 23, 2011 TO: Andrew G. Pasmant, City Manager/Executive Director and the City Council/Community Development Commission Board FROM: Christopher J. Chung Community Development Commission Director SUBJECT: APPROVAL OF RESOLUTIONS AND ORDINANCE PURSUANT TO AB1X 26 AND A131X27 TO CONTINUE THE COMMUNITY DEVELOPMENT COMMISSION AS THE REDEVELOPMENT AGENCY FOR THE CITY OF WEST COVINA. RECOMMENDATION: It is recommended that the City Council and the Community Development Commission Board take the following action: 1) That the City Council adopt the following resolution: RESOLUTION NO. - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA DECLARING ITS INTENTION TO ENACT AN ORDINANCE WHEREBY THE CITY SHALL ELECT TO COMPLY WITH AND PARTICIPATE IN THE ALTERNATIVE VOLUNTARY REDEVELOPMENT PROGRAM CONTAINED IN PART 1.9 OF DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE AND APPROVING AN AGREEMENT WITH THE COMMUNITY DEVELOPMENT COMMISSION TO TRANSFER TAX INCREMENT 2) That the City Council introduce following Continuum Ordinance: ORDINANCE NO. - AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, DETERMINING IT WILL COMPLY WITH THE VOLUNTARY ALTERNATIVE REDEVELOPMENT PROGRAM PURSUANT TO PART 1.9 OF DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE IN ORDER TO PERMIT THE CONTINUED EXISTENCE AND OPERATION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF WEST COVINA 3) That the Community Development Commission Board adopt the following resolution; and, RESOLUTION NO. - A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF WEST COVINA DECLARING ITS INTENTION TO EXEMPT TAX INCREMENT PAYMENTS TO THE LOW AND MODERATE INCOME HOUSING FUND FOR THE FISCAL YEAR 2011-2012 AND MAKING SUPPORTING FINDINGS AND APPROVING AN AGREEMENT WITH L THE CITY OF WEST COVINA FOR THE TRANSFER OF TAX INCREMENT FUNDS 4) That the Community Development Commission Board appropriate the remaining necessary funds from CDC fund balance. ECD1109ML Andrew G. Pasmant, City Manager and the City Council August 23, 2011 Page 2 DISCUSSION: The Governor signed several budget-related bills on June 29, 2011, including AB1X 26, which eliminates redevelopment agencies, and AD 1X 27, which establishes a voluntary alternative redevelopment program whereby an agency can continue to exist upon the enactment of an ordinance by the City to comply with the provisions of AB1X 27, including payment of an annual remittance to the County Auditor-Controller. Under the legislation, the County Auditor-Controller would take local redevelopment funds to pay for state related expenditures. Some of the major points of AB1X 26 and AB1X 27 are as follows: AB1X 26 imposes the following: Redevelopment agencies would cease to exist as corporate governmental entities as of October 1,2011. Effective as of June 29, 2011, agencies are prohibited from taking any actions other than payment of existing indebtedness and performance of existing contractual obligations. Such prohibited actions include incurring indebtedness (including bonds), refund or restructure indebtedness, redeem bonds, modify or amend the terms of payment schedules, execute 'deeds of trust or mortgages, or pledge or encumber any of its revenues, making loans, entering into new contracts and agreements, disposing of assets by any means, acquiring new property, transferring or assigning any of the agency's assets, forgiving or altering the terms of loans, entering into new partnerships or joint power authority and engage in redevelopment activities (e.g., adopt new project areas, amendment project areas etc). On October 1, 2011, all agency property and obligations would be transferred to a Successor Agency, except for the assets of the low and moderate income housing fund, which would be overseen by an Oversight Board, the County Auditor- Controller and the Department of Finance. Assets in the low and moderate- income housing fund would be transferred to the County Auditor-Controller for distribution to taxing agencies. The .Successor Agency would be charged. with selling assets, repaying existing indebtedness, completing performance of existing contractual obligations, and otherwise winding down operations and preserving agency assets for the benefit of taxing agencies. AB1X 27 imposes the following: A redevelopment agency may continue to operate and function if the City has enacted a Continuum Ordinance ("Ordinance") by October 1, 2011, committing to making annual payments into a Special District Allocation Fund ("SDAF") and Educational Revenue Augmentation Fund ("ERAF") established for each county and administered by the county auditor-controller. The time limit to adopt the Ordinance may be extended to November 1, 2011 if a Resolution of Intent is adopted by the City prior to October 1, 2011. Until enactment of the Ordinance, redevelopment agencies are prohibited from entering into new agreements or indebtedness, except as necessary to carry out "enforceable obligations" entered into prior to June 29, 2011. "Enforceable obligations". are defined as loans, payments to the federal government or imposed by state law, judgments or settlements and contracts. Ecd1109m1 Andrew G. Pasmant, City Manager and the Cit. y Council August 23, 2011 Page 3 • The amount of the payment for each city or county is calculated by the Department of Finance and communicated to cities and counties not later than August 1, 2011. The city or county may appeal the amount, but no later than August 15, 2011. • Payments are made annually in two equal installments on January 15 and May 15. • Payments are divided among fire protection districts, transit districts and schools in redevelopment project areas. in FY 2011-12, the total amount paid to schools would be considered property taxes and offset State's Prop. 98 obligations to finid education. • For FY 2011-12 only, an agency within a city or county that makes the required payments is exempt from making the full allocation required to be made to its low and moderate income-housing fund. The agency must find that there are insufficient other money to make the payment. • If a city or county fails to make the required payments after adopting the ordinance, then its redevelopment, agency would become subject to the elimination provisions of AB1X 26. AB1X 26 and AB1X 21 became effective immediately upon being signed by the Governor on June 29, 2011. Except to make payment of existing indebtedness and performance of existing contractual obligations, West Covina Community Development Commission ("CDC") will be dissolved until the City Council enacts an ordinance committing to make the payments required by AB1X 27. The State Director of Finance has notified the City of the voluntary payment amount due. For FY 2011-2012 the amount is $5.85 million. Payments for FY 12-13 and beyond will change, but the FY • 201242013 payment is estimated at $1.4 million. On August 15, 2011, the City of West Covina filed an appeal to the remittance payment amount for FY 2011-2012 of $5.85 million. The proposed Ordinance provides for the City's commitment to make these payments from net tax increment funds available and from other funds or assets that the cpc transfers to the City for this purpose. The City's General Fund would not be pledged to make these payments. The proposed Ordinance further reserves all rights to challenge the validity of the legislation. To effect payment, the City and the CDC would enter into a "Transfer of Tax Increment Funds Agreement" whereby the CDC would commit to transfer sufficient funds to the City to make the required payments and the City would Make payment to the State. AB1X 27 also allows the CDC to reduce its allocation of tax increment to the Low and Moderate Income Housing Fund for the 2011-12 fiscal year only, if the City complies with the provisions of AB1X 27 and the CDC finds that there are insufficient other money to meet its debt and other obligations, current priority programs or its obligations under the Remittance Agreement. The proposed City Ordinance and CDC Resolution makes such findings which allows the CDC to reduce its otherwise required allocation to the CDC's Low and Moderate Income Housing Fund for FY 11 -12, including a finding that there are insufficient Other money available to the cpc to meet the CDC's debt and other obligations, current priority program needs, and its obligations under the legislation to make the required remittances. The League of California Cities ("League") and the California Redevelopment Association ("CRA") contend that AB1X 26 and AB1X 27 are inconsistent with various Constitutional provisions that protect city and county property tax and redevelopment Eccil 109m1 Andrew G. Pasmant, City Manager and the City Council August 23, 2011 Page 4 agency tax increment. AB1X 26 and Al31X 27 ignore these protections by: (1) accomplishing indirectly What cannot be done directly; and (2) calling the payments "voluntary." "Voluntary" means acting or done willingly and without constraint or expectation of reward. The Bills' "voluntary payment" would be done with constraint and the expectation that the payment would stave off elimination of the redevelopment agency. The League and CRA have filed a lawsuit on July 18, 2011 in the California Supreme Court. The League/CRA's lawsuit challenges the constitutionality of the legislation on its merit as violating Proposition 22, Article XVI, Section 16, and other provisions of the California Constitution. The lawsuit is seeking an immediate stay of the Dissolution and Continuation Bills. On August 11, 2011, the California Supreme Court announced that it would hear the League and CRA's lawsuit against the State. In addition, the Court granted a Stay Order for Wine of the provisions of the Dissolution and Continuation Bills. Although the Court, as of the writing of this report, granted a partial . stay, the CRA and legal counsel are still evaluating the decision and have not changed their previous recommendation that cities and counties adopt the Ordinance to stay alive. Due to discrepancies between A131X 26, AB1X 27 and the Stay Order, the authority and necessity of adopting the Ordinance and Resolutions is uncertain. Legal counsel believes it is safest to proceed to adopt the Ordinance and Resolutions to assure compliance with the deadlines despite the Stay Order. The Ordinance and Resolutions have been drafted to cover this situation. IMPACTS TO CITY AND CDC: Should the City not approve the Ordinance, the ramifications of AB1X 26 eliminating redevelopment agencies Will have 'significant detrimental impacts to the City of West Covina. AB1X 26 states that after October 1, 2011, "... agreements, contracts, or arrangements between the city or county that created the redevelopment agency and the redevelopment agency...." are invalid, subject to two narrow exceptions: 1) Agreements entered into in connection with the issuance of bonds issued prior to December 31, 2010, solely for the purpose of repaying the bonds; and 2) Agreements entered into Within two years from the date the Agency was created. These impacts are compounded by that fact that the CDC has been providing approximately $5.5 million in additional revenues to the City's General Fund, and that elimination of the CDC Would not only hurt redevelopment, affordable housing and economic development in West Covina, but would severely impact the City's General Fund and the City abilities to provide basic services -across the board including Police and Fire Services which repreSent approximately 78% of the City's Budget. Some of the impacts are as follows: Im act on Ci s Loan to the CDC/Redeyelo ment Agency/Community Facility District Sales Tax Reimbursement Another severe implication of AB1X 26 is that should the CDC be dissolved, the City's loan to the CDC/Redevelopment Agency and the annual CDC loan payments to the City are at risk, meaning that the City could lose the $21.5 million loan. The CDC currently has two loans with the City in the total amount of $21.5 million. One loan is $15.8 million @ 10.5% interest rate, plus deferred interest payments of $775,000, and a second loan is $5.0 million @ 7.5% interest rate. The original Reimbursement Agreement between the City and CDC was approved in November 1973 and has been subsequently amended to increase the loan amount. Pursuant to the existing loan agreements, the CDC is making an annual payment to the City this fiscal year in the amount of $2,675,000 on Eal 11 09ml Andrew G. Pasmant, City Manager and the City Council August 23, 2011 Page 5 the $21.5 million loans. Of the annual payment amount, $2,275,000 is treated as interest income revenues to the City's General Fund and is a critical revenue component of the City. In addition, the sales tax reimbursement between the City and CDC for the Conummity Facility District (CFD) bonds are also at risk, meaning that the City, could lose approximately $1.2 million in annual revenues. The Sales Tax ReiinburSement Agreement provides for the CDC to reimburse to the City the annual sales tax revenues generated by the businesse's within the CFD district (Westfield Mall) that are used to pay towards debt service on ; the CFD Bonds. . If the Reimbursement Agreements are determined to be invalid by the State, the City will not be able to be reimbursed for the sales tax revenues paying, the CFD bonds and will therefore lose approximately $1.2 million per year. For the purposes of AB 1X 26, only indebtedness obligations are permissible. Indebtedness obligations refers to evidence of indebtedness issued or delivered by the Agency or joint power, authority to third party investors or bondhOlders to finance or refinance redevelopment projects. The City/Agency loan agreements 'do not meet the new definition of indebtedness 'obligation and may be deemed invalid. As the City/CDC loan agreements and the CFD :Sales Tax Reimbursements were not issued solely for the purpose of repaying the bOnds and that the agreements were not entered into within two years after the creation of the West Covina Redevelopment Agency in August 1971, the City/Agency loan agreemehts may arguably deemed invalid by the State. The City Attorney's office and City's Financial Advisor are both of the opinion that if the City does not pass an ordinance to participate in the Alternative Voluntary Redevelopment Program ahd make the remittance payments, there is substantial risk that the City may lose the $21:5 million loans and the corresponding annual payments from the CDC to the City, as the loans and the CFD reimbursements would not be considered indebtedness obligation as defined in AB1X 26 nor would they qualify under the above referenced exceptions. Annual Impact to the City's General Funds The City will not only lose the positive benefits of the CDC and the $21.5 million loan to the CDC, the City also stands to lose approximately $5.5 million in annual benefit that the CDC has been paying to reduce impacts to the City's General Fund. For FY 2011- 2012, the following is a list of CDC budgeted expenditures that the CDC currently funds which reduces the burden On the City's General Fund: City Annual Loan Payinent: Salaries and benefits for 18 (7.3 FTE) City (non-CDC) personnel CDC Sales Tax Reimbursement Agreement for CFD Accounting, Auditing and HdL property and sales tax City website (Civica)1 Administrative and Overhead: Election cost, CSS CFO, cart removal, SIRE service: Discover newsletter i : Graffiti abatement': Chargebacks: 1. $2,675,000 $ 936,393 $1,200,000 $ 40,614 $ 12,500 $ 408,057 $ 121,125 $ 30,000 $ 36,934 $ 50,782 TOTAL REVISED ANNUAL IMPACT: $5,549 Under AB1X 26, if the City does not pass an ordinance to participate in the Alternative Voluntary Redevelopment Program and make the remittance payments, the above- referenced expenditures that are currently being absorbed in the CDC's budget will need Ecd1109m1 Andrew G. Pasmant, City Manager and the City Council August 23, 2011 Page 6 to be either absorbed bY the City's General Fund (and/or other non-CDC fund), eliminated or renegotiated; in existing service contracts. The footnote items above are expenditures of approximately $118,434 that the City may decide to eliminate in the future, which will decrease the total annual impact to the City's General Fund to $5,431,431. Impact on CDC Benefits: The dissolution of the CDC will have tremendous impacts on the City's ability to eliminate .blight, attract neW tenants, create new jobs, protect existing jobs and revenues, and to generate new revehues. The CDC is responsible for redevelopment, ceonomic development and housing for the City of West Covina. The CDC is currently paying for six full time staff with an annual cost of $744,843 and 4 part time employees (interns) with an annual cost of $53020. Over the years, the CDC has reduced budgeted positions by over 47% in comparison to the height of development in 2008, when the CDC had 15 full-time equivalent emplbyees. The CDC, however, has continued to aggressively pursue redevelopment, economic development and housing projects for the City with limited resources. Although many current piojects have not required direct CDC financial assistance, the CDC is working diligently under its Economic Development arm to attract new tenants, and to assist developers, property owners and tenants to Streamline planning and building entitlements. Such services are invaluable in creating a business friendly enviromnent and to support the ongoing effbrts to improve the economic health of the City. The CDC has been West !Covina's economic engine that creates new businesses, jobs, transforms blighted properties into new developments and promotes the overall fiscal health of the City. The CDC has a rich history of successful redevelopment projects and has made West Covina what it is today by removing blight in the community. CDC has rehabilitated old and dllapidated uses (commercial shopping centers, residential, industrial and offices), attracted new development and businesses, created thousands of jobs (full-time, part-time, Construction jobs, etc.), developed new affordable housing, and has improved the current housing stock of the City. As a direct result of CDC's redevelopment and econoMic efforts over the past eleven (11) years, the CDC/City has created over 6,792 in new employment opportunities, 5,150 construction jobs, over $6.8 million in annual new sales tax revenues to the City, approximately $6 Million in annual gross property tax increrfient, and Over $600 million in private investments in our community. Implementation of A13 1X ; 26 will severely limit the City's ability to pursue economic development and would Oiminate future redevelopment projects that remove blight in West Covina. Over the years, redevelopment tax increment dollars have been utilized to fund various tools in redevelopment including: acquisition of blighted property, participating agreements With tenants, developers, and business owners, Disposition and Development Agreement for sale of CDC property for new developments, Marketing, and entitlement assistance. Soine of West Covina's showcase projects that have benefited as a result of redevelopment include the award winning Big League Dreams Sports Park and West Covina Heights Redevelopment project, West Covina Nissan and Citrus Grove, The Curve, Penske Audi/Mercedes, Penske Mercedes Service Center expansion, Westfield Mall expansion, Eastland Center expansion, Fairfield Marriott, and CGM Medical Offices. Furthermore, one of the primary core goals of redevelopment is to improve and increase the supply of affordable housing within the community. Under redevelopment, the CDC has financially assisted over 3,000 affordable units, which include: Ecd1109m1 Andrew G. Pasmant, City Manager and the City Council August 23, 2011 Page 7 1. 1,010 new housing ;units restricted to affordable housing families; 2. 142 down payment 'assistance to first time homebuyers; and 3. 2,141 home improvement loans to West Covina residents tO improve the housing stock in West Covina. Implementation of AB1X 26 would eliminate the City's ability to provide such direct affordable housing projects and programs to West Covina residents in the future. Impact on CDC's land assets Currently, the CDC owns 'approximately 188.57-acres of land. Most of the properties include restricted properties for parking use at Westfield Mall (22.51 acres) and Westfield Eastland Shopping Center (5.83 acres), and approximately 156 acres in the Sportsplex site (golf course, AAA, 730, 880 pad). Under AB1X 26, if the City does not pass an ordinanee to participate in the Alternative Voluntary Redevelopment Program and Make the remittance payments, the CDC Will cease to exist as of October 1, 2011. All the assets will be required to be transferred to a Successor Agency: While the City can serve as the Successor Agency, its action would be regulated by an Oversight Board composed of members that are as follows: One member appointed by the County Board of Supervisors. One member appointed by the Mayor for the City that formed the redevelopment agency. One member appointed by the largest special district, by property tax share, with territory in the territorial jurisdiction of the former redevelopment agency, which is of the type of special district that is eligible to receive property tax revenues pursuant to Section 34188. One member appointed by the County Superintendent of Education to represents schools. . One member appointed by the Chancellor of the California Conununity Colleges to represent conuminity college districts in the county. One member of the public appointed by the County Board of Supervisors. One member repreSenting the employees of the former redevelopment agency appointed by the Mayor or Chair of the Board of Supervisors, as the case may be, from the recognized employee organization representing the largest number of former redevelopment agency employees employed by the successor agency at that time. With such Successor Agency Oversight Board composition, there is no guarantee that the interest of West Covina's needs would be honored by the Successor Agency. Its primary purpose is to quickly dissOlve a redevelopment agency and to dispose of its assets. All actions by the Successor Agency would have to be approved by the Oversight Board. The proceeds from the sales of!the assets and the CDC fund balances would be utilized to pay off its bonded indebtedneSs. Any remaining asset would be transferred to the County Auditor-Controller for distribution to taxing entities. Impact to m_u_LA_guL_n projects Pursuant to AB1X 26, redevelopment agencies are prohibited from entering into new agreements. The CDC currently has numerous offers to purchase several CDC land assets as well as potential negotiations with various local businesses for financial assistance. Some of the offers on CDC-owned land include AAA pad, 730 pad, portions of CDC owned property at Westfield Mall, and Lakes parking area. As a result of A131X 26, the CDC cannot proceed with numerous pending projects under negotiations unless the Ordinance is adopted. Ecd1109m1 Andrew G. Pasmant, City Manager and the City Council August 23, 2011 Page 8 Analysis of CDC cashflovv The Finance Department believes that the CDC has the. ability to make the 'remittance payment of $5.85 million tot FY 2011-2012. Pursuant to AMX 27, the CDC 'can make the required payments .fioni utilizing its allocation of FY 2011-2012 of low and Moderate income-housing fund. Finance estimates Such allocation to be approximately $3.85 million. The remaining balance (approximately $2.0 million) will be paid utilizing CDC fund cash balance. Based on discussions with CDC's financial advisor, cities that can make the remittance payment are preparing ordinances for adoption in the near future and before the October 1, 2011 deadline. Of recent, City of Poway and City of Santa Cruz have already adopted an ordinance to participate in the Alternative Voluntary Redevelopment Program and began to make preparation S for the remittance payments. It is important to note that the Remittance Payments are made under protest and Without prejudice to the City's right to recover such amount and interest thereon in the event that there is a final determinatiOn that AB lx 26 and AB 1x27 are unconstitutional. In addition to approving the Ordinance, the City Attorney's office is recommending that the City Council also appOve the attached Resolution declaring its intention to enact an ordinance. The City Attorney's office is of the opinion that While the Ordinance is approved upon the 2"d reading of the Ordinance, the Ordinance May not be effective until 30 days. after the 2"d reading. Assuming, the City Council introduces the Ordinance tonight and approves the 2nd reading on September 6, 2011, the Ordinance may not be into effect until October 6, 2011(30 days after 2" reading). As the law requires that all redevelopment agencies are disbanded by October 1, 2011, adopting the attached Resolution declaring its intention to enact an ordinance gives the City 'Council until November 1, 2011 to alloW the City sufficient time to enact the Ordinance. FINDINGS: The City Council hereby qetermines that the City shall make the community remittances set forth in Health and Safety Code Section 34193 et. seq.. • The City Council hereby determines that Remittance Payment are made under protest and without prejudice to the City's right to recover such amount and interest thereon in the event that there is a final determination that AB lx 26 and ABlx27 are unconstitutional. The City Council finds, under Title 14 of the California Code of Regulations; Section 15378(b)(4), that this Ordinance is exempt from the requirements of the California Environmental Quality Act ("CEQA") in that it is not a "project," but instead consists of the creation and continuation of a governmental funding mechanism for potential future projects and programs, and does not commit funds to any specific project or program. • The City Council hereby determines it is the understanding and intent of the City Council that, once the Commission is again authorized to enter into agreements under the Community Redevelopment Law, the City will enter into an agreement with the Commission as authorized pursuant to Section 34194.2, whereby the Commission will transfer annual portions of its tax increment to the City in amounts not to exceed the annual community remittance payments to enable the City, directly or indirectly, to make the annual remittance paythents. The City Council does not intend, by enactment of this Ordinance, to pledge any Of its general fund revenues or assets to make the remittance payments. Ecd1109m1 Andrew G. Pasmant, City Manager and the city Council August 23, 2011 Page 9 The CDC Board finds that to the extent necessary to pay all of the Commission Qdsting cunent obligations, prograiin payments, operations expenses and the payment obligations to the City pursuant to and as authorized by Section 34194.2 of the Community Redevelopment Law, the Commission authorizes funds to be exempted from the regular 20% allocation to the Low and Moderate Income Housing Fund for the fiscal year 2011- 2012. The City Council and the CDC Board hereby authorizes and directs the City Manager/Executive Director to take any action and execute any documents necessary to implement the Resolution(s) and Ordinance. CONCLUSION: Staff estimates that the FY 11-12 payment will be $5.85 million. Fuilds available to make that payment will be from1FY 2011-2012 Low and Moderate Income Housing Set-Aside tax increment and CDC fund balance. °NU Prepared by: Mike Lee Assistant CDC lifire-c-tQr J. Chung CDC Di Approved via telephone Reviewed/Approved by: Arnold M. Alvarez-Glasman General / ounsel to the CDC Finance Attachments: No. 1 — City Resolution No. 2 — City Ordinance No. 3— CDC Resolution Ecc11109m1 ATTACHMENT NO. I RESOLUTION NO. REDEVELOPMENT isigoGRAm CONTAINED .. IN -PART. 1;9 OF DIVISION 24 OF TH.0, CALIFORNIA. HEATH AND SAFETY 'CODE AND APPROVING AN AdREE1VIENT WITH THE COmMuMTY DEVELOPMENT COMMISSION TO TRANSFER iikk INCREMENT: WHEREAS, the Community Development Commission of the City of West Covina ("Commission") is a commumtyF development commission organized and -existing under and pursuant to the California Community Development Commission Law (Part 1.7 of Division 24, commencing with Section 34100; of the Health and Safety Code of the State of California) (the "CDCL"); and WHEREAS, the City Council of the 'City of West Covina ("City") .approVed and adopted the Redevelopment Plans for the following Redevelopment Projects ("Redevelopment - Plans") covering certain properties within the City (the "Project Areas"): 1. On December 20, 19711 the West Covina City Council adopted the original- Central Business District Redevelopment Project Area by adOption of Ordiriaiice NO. 1480. 2. On July 14, 1975 the West Covina City Council adopted the .original 'Eastland Redevelopment Projecf Area by adoption of Ordinance ivo. 1269. 3. On December 21, 1993 the West Covina City Council approved tbe Merger of the Central Business District and the Eastland Redevelopment ,Project Areas by adoption of Ordinance No 1927 and Ordinance No 1928, which adopted the merged area as the West Covina Aedevelopment Project Area and added three non-contignous areas to the merged project area; and WHEREAS, Parts 1.8, 1.85 and 1.9 of Division 24 of the Health and Safety Code were . _ _ added to the Community Redevel lopm.ent Law, Part 1 of Division 24, commencing with Section 33000, of the Health and Safety pode of the State of California (the "CRL7) by Al3x1, 26 and ABx1 27, which measures purport to become effective immediately. ABx1 26 and Al3x1 27, which are trailer bills to the 2T11-12 budget bills, were appmved by both houses of the Legislature on June 15, 2011, and signed by the Governor on June 28, 2011; . , . WHEREAS, Part 1.85 of the CRL ("Part 1.85") provides for the statewide dissolution of . _., _ . all redevelopment agencies, including the City of West Covina Community .Development Commission, as of October 1, 2011, and provides that, thereafter, a successor agency is to administer the enforceable :obligations of . the Commission and otherwise wind up the Commission's affairs, all subject tØ the review and approval of an oversight committee; -WHEREAS, Part 1.8 Of tlie Cla, ("Part 1.8") provides for the restriction Of activities and . , authority of the Agency in the interim period prior to dissolution to Certain "enfOteeable obligations" and to actions required for the general winding up of affairs, preseniatiOn of assets, and certain other goals delineated in Part 1.8; WHEREAS, the dissolutton of the Commission would he detrimental to the health, safety, and economic well-being of the residents of the City of West 'Covina and ,cause irreparable harm to the commim*, because, among other reasons, the redevelopment activities and projects made possible, rinplemented, and funded by the COnuniSsiOii are highly significant and of enduring benefit to the eonibinnity and the City and are a Critical coirip' onent of it future; WHEREAS, Part 1.9 of the CRL ("Part 1.9") provides that a Community Development Commission may continue in Operation if a city or county that includes a CominUnity Resolution No. Page 2 of 3 Development Commission adopt S an ordinance agreeing to comply with and participate in the Alternative Voluntary RedevelopMent Program established in Part 1.9 ("Program"); WHEREAS, as a conditioi of the Commission's continued existence and operation of its Community Development Commission, the City is required to make certain annual remittances to the County Auditor-Controllei pUrsuant to Chapter 3 of Part 1.9, beginning with a larger upfront remittance for the 2011-12 Fiscal Year ("First Remittance"), to be paid in two equal installments on January 15, 2012 and May 15, 2012; WHEREAS, the City exPects it will have sufficient moneys and revenues to fund an amount equal to the City's payment of the First Remittance and further expects to have sufficient moneys and revenues to fund the subsequent annual remittances required by Part 1.9; WHEREAS, the City's needs are such that it can commit to spend the funds received from the Commission pursuant to the Agreement to Transfer Tax Inereinent; (defined below) to finance - activities within the Merged Project Area that are related to accomplishing the goals Of the Redevelopment Plan; WHEREAS, the City intends to adopt the Ordinance required by Part 1.9, in order to allow the Commission to continue in operation and perform its funetions; WHEREAS, the City intends to adopt the Ordinance and desires to forestall the dissolution of the Commission until November 1, 2011, to allow the city sufficient time to enact the Ordinance; WHEREAS, the City and Commission desire to enter into an agreement pursuant to CRL Section 34194.2 whereby the Commission shall make an initial transfer Of a portion of its tax increment to the City in an amount less than or equal to the First Remittance, and thereafter to transfer amounts of tax increnrent less than or equal to any subsequent remittance which the City is required to make to the COunty Auditor-Controller pUrsitant to the City's participation in the Program ("Agreement to TranSfer Tax Increment"); WHEREAS, the City is aware that the validity, passage, and applicability of ABx1 26 and ABx1 27 is the subject of a judicial challenge; WHEREAS, the California Supreme Court on August 11, 2011 issued a partial stay ("Stay") on the operative effects of ABX1 26 and ABX1 27 in the case of California Redevelopment Association, et al. v. Ana Matsonantos, et al. Case No. S194861. WHEREAS, the City by the adoption of this Resolution, does not represent, disclaim, or take any position whatsoever on the issue of the validity of Al3x1 26 or ABX.1 27, but rather the City seeks to comply with the Constitution and laws of the State of California, hicluding Part 1.9, in order to preserve the ability of the Commission to continue to operate and thereby benefit the community; and WHEREAS, the City has duly considered all other related matters and has determined that the City's participation in the Program is in the best interests of the city, and the health, safety and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of West Covina, as follows: SECTION 1. The foregoing Recitals are incorporated into this Resolution by this reference, and constitute a material part of this Resolution. SECTION 2. Pursuant to, CRL Section 34193(b), the City hereby expresses its interit to adopt the Ordinance to comply with Part 1.9. This Resolution is that "non-binding resolution of intent" referred to in CRL Section34193(b) and shad be interpreted and applied in all respects in accordance with such Section and Part 1.9, to the fullest extent permitted by law. Resolution No. Page 3 of 3 SECTION 3. On or before October 1, 2011, the City Manager is hereby authorized and directed to notify the County Anditor-COntroller, the State . Department of Finance, and the Controller of the State concerning [the Resolution, in accordance with Section 34193(b). SECTION 4. The City :Attorney is hereby authorized to bring an action in the Superior Court pursuant to CRL Sections i33500 and 33501 to determine the Validity of th6:Ordiriance referred to in this Resolution, 'or the validity of any bonds contemplated to be issned, by the Agency or other material contracts of the Agency, or any findings Of the City Council related thereto, upon the determination of the City Manager that such action is reasonably necessary or appropriate to facilitate the conSumthation of any Agency transaction for which Governing Board approval has been given. • SECTION 5. The AgreeMent to Transfer Tax Increment, attached hereto as 'Exhibit "A" is approved and the City Manager is authorized to execute the Agreement and any other documents necessary to implement the Agrdement. SECTION 6. To the extent the Stay may be interpreted to disallow or prohibit the adoption of this Resolution for any period of time, then any actions of the City Council in adopting this Resolution shall be .leemed to have occurred at a tithe when .stich disallowance or prohibition was not in effect without further action by the City Council. If there is a final detennination by a court of competent jurisdiction that AB 1X 26 and AB 1X 27 are invalid, this Resolution shall be deemed to be null and void and of no further force or effect. SECTION 6. The City Clerk shall certify as to the passage and adoption of this Resolution, and it shall thereupon take effect and be in full force, except that this Resolution shall not be effective during any period of tiine that the Stay remains effective. APPROVED AND ADOPTED at a special meeting of the City Council this 23 rd day of August 2011. Mayor Steve Herfert ATTEST: City Clerk Laurie Carrico I LAURIE CARRICO do ihereby certify that the foregoing resolution was dulY.adopted by the City Council of the City of West Covina, California, at their special meeting thereof held on the 23rd day of August 2011, by the following vote of the City Council: AYES: NOES: ABSENT: ABSTAIN: City Clerk Laurie Carrico APPROVED AS TO FORM City Attorney Arnold M. Alvarez-Olasman EXHIBIT A AGREEMEN1' TO TRANSFER TAX INCREMENT This Agreement to Transferitax Increment ("Agreement") is dated 2011 for reference purposes only arl is entered into by and between the City of West Covina, a California municipal corporation ("City") and the Community Development Commission able City of West Covina, a California community development commission ("COinniission"). RECITALS. WHEREAS, the Community' Development Commission of the City of West Covina is a community development commission organized and existing under and pursuant to the California Community Deve1opm4n Commission Law (Part 1.7 of Division 24, commencing with Section 34100, of the HealthIland Safety Code of the State of California) (the "CDCL"); and WHEREAS, the City Council of the City of West Covina approved and adopted the Redevelopment Plans for the fodo*ing Redevelopment Projects ("Redevelopment Plans") ti covering certain properties within the City (the "Project Areas"): 1. On December 20,1.971 the West Covina City Council adopted the original Central Business District Redeve14ment Project Area by adoption of Ordinance No. 1180. 2. On July 14, 1975 he West Covina City Council adopted the original Eastland Redevelopment Project Area by ad4tion of Ordinance No. 1269. 3. On December 21, 1093 the West Covina City Council approved the Merger of the Central Business District and the Eastland Redevelopment Project Areas by adoption of Ordinance No. 1927 and Ordinaqce No. 1928, which adopted the merged area as the West Covina Redevelopment Project Area and added three non-contiguous areas to the merged project area; and WHEREAS, Parts 1.8, 1.8 added to the Community Redevelc 33000, of the Health and Safety C ABX1 27, which measures purpor which are trailer bills to the 20 Legislature on June 15, 2011, and E and 1.9 of Division 24 of the Health and Safety Code were Iment Law, Part 1 of Division 24, commencing with Section de of the State of California (the "eRt") by Al3X1 26 and to become effective immediately. ABX1 26 and Al3X1 27, 1-12 budget bills, were approved by both houses of the gned by the Governor on June 28, 2011; WHEREAS, Part 1.85 of tile CRL ("Part 1.85") provides for the statewide dissolution of all redevelopment agencies, h41uding the City of West Covina Conurnmity DeVelopment Commission, as of October 1, 2011, and provides that, thereafter, a successor agency is to administer the enforceable obligations of the Commission and otherwise wind up the Commission's affairs, all subject tojthe review and approval of an oversight committee; 'WHEREAS, Part 1.8 of the CRL ("Part 1.8") provides for the restriction of activities and authOrity of the Agency in the interim period prior to dissolution to certain "enforceable obligations" and to actions required for the general winding up of affairs, preservation of assets, and certain other goals delineated in Part 1.8; WHEREAS, the dissolutiOn of the Commission would be detrimental to the health, safety, and economic well-being ; of the residents of the City of West Covina and cause irreparable harm to the commtmiti, because, among other reasons, the redevelopment activities and projects made possible, implemented, and funded by the Commission are highly significant and of enduring benefit to the comMunity and the City and are a critical component of its future; VVHEREAS, Part 1.9 of the CRL ("Part 1.9") provides that a Community Development Commission may continue in oi3eration if a city or county that includes a Community Development Commission adopts lan ordinance agreeing to comply with and participate in the Alternative Voluntary Redevelopment Program established in Part 1.9 ("Program"); WHEREAS, as a condition of the Commission's continued existence and operation of its Community Development CommiOion, the City is required to make certain annual remittances ("Annual Remittances") to the County Auditor-Controller pursuant to Chapter 3 of Part 1.9, beginning with a larger upfront reirrittance for the 2011-12 Fiscal Year ("First Remittance"), to be paid in two equal installments on January 15, 2012 and May 15, 2012; 'WHEREAS, the City and Commission desire to enter into an agreement pursuant to CRL Section 34194.2 whereby the 11 Commission shall make an initial transfer of a portion of its tax increment to the City in an amount less than or equal to the First Remittance, and thereafter to transfer amounts of tax increment less than or equal to any subsequent remittance which the City is required to make to the .Co4nty Auditor-Controller pursuant to the City's participation in the Program ("Agreement to Transfer Tax Increment"). WHEREAS, City underStands and believes that an action challenging the constitutionality of AB X1 26 and AB X1 27 has been filed on behalf of cities, counties and redevelopment agencies; and WHEREAS, the California. Supreme Court on August 11, 2011 issued a partial. jstay ("Stay") on the operative effects of Al3X1 26 and ABX1 27 in the case of California Redevelopment Association, et al.17. Ana Matsonantos, et al. Case No $194861. To the extent the stay on the effectiveness of the Alternative Voluntary Redevelopment Program's paYment obligation of AB X1 26 and AB 41 27, the City shall not be obligated to make any community remittance for the duration of such injunction, restraint, or stay. WHEREAS, neither the City nor the Commission intends, whether by enactment, of the Resolution, by making any remittance payments to the . County or by entering- into this Agreement, to waive any of their iespective constitutional or legal rights and both the CitY and the Commission have reserved all 8 ..E. their rights to challenge the validity of any or all provisions of ABX1 26 and ABX1 27 in any 41ministrative or judicial proceeding, without prejudioe. NOW THEREFORE, the 1City and the Commission in 'consideration of the mutual promises in this Agreement, and Snch other valuable consideration, receipt of which is hereby acknowledged, do promise and coVenant to each other as follows: 2 1. The foregoing Recitals are incorporated into this Agreement by this reference, and constitute a material part of this Agreement. 2. Pursuant to the autlibrity of Section 34194.2 of the cRL Commission agrees to transfer to City a portion of its tax iricrement revenue in an amount less than or equal to the First Remittance, and thereafter to transfer to City amounts of tax increment revenue less than Or equal to any subsequent Annual Remitia.nces which the City is required to make to the County Auditor-Controller pursuant to the City's participation in the Program. 3. In consideration of the transfer of the above tax increment revenues, City -agrees to pay the First Remittance to the Los Angeles County Auditor-Controller, and to pay such subsequent Annual Remittances asiMay be necessary to remain in compliance with the Program. Pursuant to Section 34194.2 of the CRL the City agrees to use such transferred tax increnient funds for the purpose of financing activities within the redevelopment area that are related to accomplishing the redevelopment akency project goals. 4. This agreement doe's not constitute and shall not be interpreted as creating an obligation on the general fund of the City to pay the First Remittance or any Annual Remittances. While the City currently intends to make these community remittances, they shall be made under protest and with* prejudice to the City's right to recover such amounts and interest thereon, to the extent thcr'e is a final determination that AB X1 26 and AB X1 27 are unconstitutional. 5. The parties acknowledge that the City's decision to participate in the Program is based on the Commission's commiiment to provide the funding for the City's annual remittance payments. The City, once it agreeOrto participate in the Program, is obligated to Make the annual remittance payments to the Los Ahgeles County Auditor-Controller, but the source of the City's payments shall be only from the f4ds provided by Commission pursuant to this Agreement. The City shall be under no obligation tO provide funding from any source other than Coinmission to make the annual remittance payments. 6. The City has received the California Department of Finance's ("CDOF") calculation of the amount of the City's remittance payment for FY 2011-12, which is $5,850,000. In connection with any appeal of this amount by City, Commission shall provide the City With all necessary information and dOcum.ents and assist the City in the preparation of appeal documents. 7. For years subsequent to FY 2011-12, the City is obligated to inform CDOF, the State Controller and the County b31:r November 1 of the amount of the remittance payment that is to be made for such fiscal year Commission shall assist the City in Calculating the amount of the remittance payments pursuant tO the formula set forth in Section 34194(c). Commission shall provide the City with all necessarif information and documents requested by the City to assist with the calculation. 8. Should CD OF, the State Controller or the County audit the City's calculation of an annual remittance payment, det4mine that a miscalculation was made and adjust the amount of the City's next annual rernittahce payment, the Commission shall include the adjustment amount in its next transfer of fund § to the City (or be provided a credit should the audit show that the City's payment was in excess of' the amount actually due and the City is provided a credit for the excess amount). 9. At least 21 calendai days prior to the due date of each installment of the City's remittance payment to the County, ICommission shall transfer funds to the City in the amount of each such installment payment C4mnission shall, in its annual budgeting process identify and reserve adequate funds from lawfilil sources, including tax increment from each project area, necessary for the annual remittance hransfer to the City. . 10. For the 2011-12 fis certain findings, to transfer tax inci Moderate Income Housing Fund ( Commission determine that it 11111E City for the remittance payment required findings of Section 34194 11 year only, Part 1.9 authorizes Commission, upon making ment funds that would otherwise be deposited in its Low and -lousing Funds") to the City under this Agreement Should use Housing Funds to make the full transfer Of Rinds to the the Commission shall so inform the City and make the 11. The City reserves the right, regardless of any First Remittance or Annual Remittances paid pursuant to this 4greement, to challenge the legality of AB X1 26 and AB X1 27. 12. To the extent that the Stay may affect this Agreement, this agreement shall not be effective. during any period of time the Stay remains • in effect. To the extent the Stay May be interpreted to disallow or prohibitli the adoption of this Resolution for any period of tune, then any actions of the City Council oi Commission in adopting this Resolution shall be 'deemed to have occurred at a time when such disallowance or prohibition was not in effect without further action by the City Council or Cornthission. 13. City shall not make of time the Stay remains effective 26 and AB X1 27 are unconstit exhausted or unsuccessful, or ti Remittance or Annual Remittanc City's right to recover such 'ami determination that AB X1 26 determination that AB X1 26 and null and void and of no further for 1y First Remittance or Annual Remittances during the period if a court of competent jurisdiction determines that AB X1 onal and therefore invalid, and all appeals therefrom are e for filing an appeal therefrom has lapsed. Any First shall be made under protest and without prejudice to the at and interest thereon in the event that there is a 'final d All X1 27 are unconstitutional. If there is a final B. X1 27 are invalid, this Agreement shall be deemed to be or effect. 14. City shall have no )obligation to repay to Commission any tax increment funds transferred to City by Agency pursilant to this Agreement. The stuns transferred to City pursuant to this Agreement are transfers for Consideration and not a loan or advande of funds. 15. The parties ackndwledge that the obligations of Commission under this Agreement shall constitute an iildebtedness of Commission for the purpose of carrying out the redevelopment plan for each of Commission's redevelopment project areas. 16. This Agreement may be executed in duplicate originals, each of which is deemed to be an original. This Agreement lintegrates all of the terms and conditions mentioned herein or " . , . . : • . ' . . . , •', . incidental hereto, and supersedes 411 negotiations or previous agreements between the patties with respect to the subject matter of:this Agreement. 17. This Agreement is itn.tended solely for the benefit of the City and Commission. Notwithstanding any reference in this Agreement to persons or entities other than the City and Commission, there shall be no third party beneficiaries under this Agreement. 18. Any waiver or amenliment of the provisions of this Agreement must be in writing and signed by the authorized repre+rtatives of the parties. 19. If any term, provisiOts, covenant or condition of this Agreement is held by a court - of competent jurisdiction to be invalid, void or unenforceable, the remainder of the Provisions shall continue in full force and effect unless the rights and obligations of the Parties have been materially altered or abridged by suh invalidation, voiding or unenforceability. 20. This Agreement shah be binding on and shall inure to the benefit of all successors and assigns of the parties, whethr by agreement or operation of law. This Agreement shall survive any full or partial merger oy the City and Commission and shall remain in effect and be fully enforceable according to its terms. IN WITNESS WHEREOF, the date set forth herein below. CITY OF WEST COVINA By: City Manager Date: ATTEST Oity and the Commission have signed this Agreement on the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF WES COVINA By: Executive Director Date: ATTEST City Clerk Secretary APPROVED AS TO FORM: APPROVED AS TO.FORM: City Attorney Commission Counsel ArrACHIVIENT NO. 2 ORDINANCE NO. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY.' OF wtsT: COVINA, CALIFORI‘TiA., DETERMINING IT WILL COMPLY WITH THE VOLUNTARY ALTERNATIVE REDEVELOPMENT PROGRAM PURSUANT TO PART .1:9 OF DIVISION 24 . OF THE . CALIFORNIA ' HEALTH AND SAFETY CODE IN ORDER . TO . PERMIT THE CONTINUED EXISTENCE- AND OPERATION OF THE . COMMUNITY . DEVELOPMENT COMMISSION OF THE CITY. OF WEST COVINA. , . WHEREAS, the cominunity:DeVelopment Commission of the City of West .CoVina (the '• , . "Commission") is a community develoPinelit commission duly ' created; established ! and authorized to transact business mid exercise its powers, all undet ! and pursuant to the California Community Development Commission Law (Part 1.7 of Division 24, commencing With Section 34100, of the Health and Safety Cbde of the State of California) (the "CbCL"); and WHEREAS, the City Council of the City of West Covina ("City") approved and adopted the Redevelopment Plans for the following Redevelopment Projects "("Reclevelopment -Plane) covering certain properties withinkhe City (the "Project Areas"): 1. On December 20, -1971 the West Covina City Com-jell adopted the original Central Business District Redevelopment Project Area by adoption Of Ordinance No 1180. 2. On July 14, 1975 the West Covina City Council adopted the original Eastland Redevelopment PrOject Area by adoption of Ordinance No. 1269 3. On December 21, 199,3 the West Covina City council approved the Merger of the Central Business District and the Eastland Redevelopment F'rdject.Areas by adoption of Ordinance No 1927 and Ordinance No 1928,.whielr !adOpted the mergedarea as . the West Covina RedeVelopment Project Area and added three non-cOntigithuS areas to the merged project area. WHVREAS'the Cotnhi,sioiisengagecn activities e?caute and implement the Redevelopment Plans pursuaitto,ieprovisionsofhecpcL;:nd , . WHEREAS, since adoption of the Redevelopment Plans ;- the Commission : has undertaken redevelopment projects in the Project Areas to !eliminate blight; to improve public . facilities and infrastructure, to renovate and construct affordable .housing, and to enter intO partnerships with private industries to create jobs and expand the local econoiny; and WHEREAS, over the next few years, the COMIlliSSi011 hopes to implement a ythietY of - - - redevelopment projects and programs to continue to eliminate and prevent : blight; stinnilate and expand the Project Areas' econbinic growth, create and develop local job opportunities and alleviate deficiencies in public inftaStructure, to name a few; and WHEREAS, as part of tlle 2011-12 State budget bill, the California LegiSlatUre . • - , recently enacted and the Govern,.or has signed, companion bills AB 1X 26! and AB ::1X 27, requiring that each development Commission be dissolved unless the community that Created it enacts an ordinance committing &I-0 making certain payments; and WHEREAS, specifically,! AB lx 26 prohibits commissions , from taking numerous actions, effective immediately and purportedly retroactively, and additionally provides that commissions are deemed to be disSolved as of Obtober 1, 2011; and WHEREAS, the dissolutIon of the Commission would be detrimental to the health ; safety, and economic well-being Of the residents of the City and cause irreparable hatM to the community, because, among other reasons ; the redevelopment activities and projects Made possible, implemented, and funded by the Commission are highly significant and Of enduring !.= benefit to the community and the city, and are a critical component of its fit -titre; and WHEREAS, AB lx 27 provides that a community may participate in an _"Alternative Voluntary Redevelopment PrograM," in order to enable a development coihMission within that community to remain in existence and carry out the ProVisions Of the Conninmity - , Ordinance No Page 2 of 4 Redevelopment Law ("CRL"), bY enacting an ordinance agreeing to comply with Part 1.9 of Division 24 of the Health and Safety Code; and WHEREAS, the Alternative Voluntary Redevelopment Program requires that the community agree by ordinance to remit specified annual amounts to the County auditor-controller in accordance with section 34194 Of the CRL; and WHEREAS, under the #. reat of dissolution pursuant to AB 1X 26, and upon- the contingencies and reservations set forth herein, the City shall Make the Fiscal 'Year. 2011-2012 community remittance, currently, estimated to be 5.85 Five Million Eight Hundred -F.* Thousand and No/100 Dollars, ($5,850,000) as well as the subsequent annual cominimity remittances as set forth in section 34194 of the CRL; and WHEREAS, the City res'erves the right to appeal the California Director a Finance's determination of the Fiscal Year 2011-12 community remittance, as provided in Health and Safety Code Section 34194; and WHEREAS, City ungrstands and believes that an action challenging: the constitutionality of AB 1X 26 and AB 1X 27 has been filed on behalf of cities, co -tin-ties and redevelopment agencies; and WHEREAS, while the City currently intends to make these community remittances they 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 that AB 1X 26 and AB '1X 27 are unconstitutional; and WHEREAS, the City ,reserves the right, regardless of any community remittance made pursuant to this Ordinance, to clial lienge the legality of AB 1X 26 and AB 1X 27; and • WHEREAS, the California Supreme Court on August 11, 2011 issued a partial , stay ("Stay") on the operative effects of ABM 26 and ABX1 27 in the ,case ' of California Redevelopment Association, et all v. Ana Matsonantos, et . al. Case No S194861,. • To the .extent of the stay on the effectiveness °tithe Alternative Voluntary Redevelopinent PrOgrani's paYnient obligation of AB lx 26 and AB 1x 27, the City shall not be obligated to make any Coniinunity remittance for the duration of such injunction, restraint, or stay; and WHEREAS, all other legal prerequisites to the adoption of this Ordinance have occurred. THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, DOES ORDAIN AS FOLLOWS: SECTION 1. Recitals. The Recitals set forth above are true and correct and incorporated herein by reference. . . SECTION 2. Particinatinn..in the .Alternative VoluntarY,Rideyelifinneiitfitt4rani. In accordance with Health and Wety Code Section 34193, and based On the Recitals Set fOrth above, the City Council hereby determines that the City shall comply with the provisions of Part 1.9 of Division 24 of the Health mid Safety Code, as enacted by AB 1X 27. SECTION 3. Payment Under Protest. Except as set forth in Section 4, below, the City Council hereby determines that the City shall Make the Community reinittanees Set forth in Health and Safety Code section 341194 et seq. Any such payments shall be bia0 Under protest. SECTION 4. Effect of . , , . community remittance during di competent jurisdiction deterinin therefore invalid, and all appeals appeal therefrom has lapsed. 2 without prejudice to the City's r4 there is a final determination tha final determination that AB 1X 2 be null and void and of no forth( disallow or prohibit the adoption :ay. or Determination Of InYalidity. City shallnot make any period of time the Stay reinains effective or if a court of that AB 1X 26 and AB 1X 27 are unconstitutional and herefrom are exhausted or unsuccessful, Or time for filing an L community remittance shall be made under Protest and t to recover such amount and interest thereon in the event that AB 1X 26 and AB 1X 27 are unconstitutiOnal. If there is a and AB 1X 27 are invalid, this Ordinance shall be deemed to force or effect. To the extent the Stay may be kiterinded to this Ordinance for any period of time, then any actions of the Ordinance No. Page 3 of 4 City Council in adopting this Ordinance shall be deemed to have occulted at a time When such disallowance or prohibition was not in effect without further action by the City Couneil. SECTION 5. Impleniu Manager to take any action and including but not limited to Doti of the State of California, and Ordinance and the City's agreer the Health and Safety Code, as s SECTION 6. Additio, intent of the City Council that, ( under the CRL, the City will pursuant to Section 34194.2, v increment to the City in amoul enable the City, directly or ii Council does not intend, by e revenues or assets to make the r Won. The City Council hereby authorizes and directsthe City ecute any documents nece§Saty to implement this Ordinance, Lng the Los Angeles County Auditor-COntroller, the Controller Le California Department of Finance of the adoption - of this tit to comply with the provisions of Part 1.9 of Division 24 of forth in AB 1X 27. Understandiogs and:Intent It is the :understanding and e the Commission is again authorized to enter into agreements ter into an agreement with the Commission as authorized reby the Commission will transfer annual portions of its tax not to exceed the annual community teinittance payments to ectly, to make the annual rernittanoe payinents. The City tment of this Ordinance, to pledge any of its general' fund ittance payments. SECTION 7. CEQA. tie City Council finds, under Title 14 of the California Code of Regulations, Section 15378(b)(4)I that this Ordinance is exempt from the requirements of the California Envirornnental Quality Act ("CEQA") in that it is not a "project," but instead .consists of the creation and continuation of a governmental funding mechanism for potential future projects and programs, and does ffot commit funds to any specific project or program. SECTION 8. Custodiatitof Records. The documents andmaterial§-that - constitute -.the . • • record of proceedings on which these findings are based are located at the City Clerk's, Office located at 1444 West Garvey Avenue, West Covina, California, 91790. The 'custodiairthf these records is the City Clerk. SECTION 9. If any part of this Ordinance, or its applicationto any -person - or _ . „ circumstance, is held to be invalid, the remainder of the ordinance, including the application .or provision to other persons or circumstances, shall not be affected and shall Continueinfullfdrcé and effect. To this end, the provisions of this ordinance are severable. SECTION 10. The City Council of the City of West Co City of West Covina, and it shall Mayor, except that this Ordinanc remains effective. However th referendum period on this ordit during the Stay. lerk shall certify to the passage of this ordinance by the City a and cause it to be posted in three conspicuous places in the ke effect on the thirty-first (31) day after it is :apprOved by the shall not be effective dming any period of tune that the Stay Stay shall have no effect on the running - of the :thirty day ice, which thirty days shall Commence and contintie th run APPROVED, PASSED AND ADOPTED THIS 23' DAY OF AUGUST, 2011. Mayor Steve Herfert ATTEST: City Clerk Laurie Carrico I, LAURIE CARRICO, City Clerk of the City of West Covina, California, do hereby certify that the foregoing Ordinance was regijilarly introduced and placed upon its fist readm g at a special meeting of the City Council on the 23rd day of August, 2011. That thereafter Said- Ordinance Ordinance No. Page 4 of 4 - was duly adopted and passed at ,a regular meeting of the City Council on the day of 2011 by the following vote. AYES: NOES: ABSENT: ABSTAIN City Clerk Lauri Carrico APPROVED AS TO FORM: City Attorney Arnold Alvarez-'G14inan AirACHMENT NO 3 RESOLUTION NO. A RESOLUTION OF THE COMMUNITY . DEVELOPMENT , COMMISSION OF THE CITY OF WEST COVINA 'DECLARING ITS INTENTION TO EXEMPT TAX INCREMENT PAYMENTS TO rtnE LOW AND MODERATE INCOME HOUSING FUND FOR THE FISCAL YEAR 2011-2012 AND . MAKING SUPPORTING FINDINGS AND APPROVING AN AGREEMENT WITH THE CITY OF WEST COVINA FOR THE TRANSFER OF TAX INCREMENT FUNDS WHEREAS, the Community Development Commission of the City Of West Covina ("Commission") is a community _development commission o1 ganized. and existing Under and pursuant to the California Community Development Commission Law Wart 1.7 of Division commencing with Section 34100, of the Health and Safety Code of the State of California) (the - "CDCL"); and WHEREAS, the City Con,ncil of the City of West Covina ("CitY") Ptoved and adopted the Redevelopment Plans for ;thel' following Redevelopment PrOjects ("Redevelopment - Plans covering certain properties within the City (the "Project Areas"): 1 1. On December 20, 19711 the West Covina City council adopted the original Central: Business District Redekelopment Project Area by adoption of Ordinance No 1180. ' 2. On July 14, 1975 the West Covina City Council adopted the original Eastland: Redevelopment PrOje4 Area by adoption Of Ordinance No 1269. 3. On December 21, ,1993 the West Covina City Council approVed. the Merger. of the Central Business District and the Eastland Redevelopment Project Areas by adoption of Ordinance No 1927 and Ordinance No 1928, which adopted the Merged area as the West Covina RedeVeloprnent Preject Area and added three nori-cOntignOtis areas to the Merged project area; and WHEREAS, Parts 1.8, 1:85 and 1.9 of Division 24 of the Health and Safety Code .were. added to the Community Redevelopment Law, Part 1 of Division 24 ; commencing With Section 33000, of the Health and Safety Code of the State of California (the "CRL") by ABx1 26 and ABx1 27, which measures purport to become effective immediately: ABxl 26 and ASkl 27; which are trailer bills to the 2011-12 budget bills, Were .apptoved by both :houses of the Legislature on June 15, 2011, and signed by the Governor on June 28, 2011; WHEREAS, Part 1.85 of the CRL ("Part 1.85") provides for the statewide dissolution of , all redevelopment agencies, -including the City of West Covina Community Development Commission, as of October 1, i011, and provides that, thereafter, a successor agency is to administer the enforceable obligations of the Commission and otherwise wind up the Commission's affairs, all subject t the review and approval of an oversight collimated; WHEREAS, Part 1.8 of the CRL ("Part 1.8") provides for the rekrietion of activities and authority of the Agency in the 'Interim period prior to dissolution to Certain "enforceable obligations" and to actions required for the general winding Up of affairs; preservatiOn of assets, and certain other goals delineated in Part 1.8; WHEREAS, the dissolution of the Commission would be detrimental to the health, safety, and economic well-being Of the residents of the City of West Covina and cause irreparable harm to the communif,y, because, among other reaSoh4; the redevelopment activities and projects made possible, implemented, and funded by the Commission ate highly significant and of enduring benefit to the conitnunity and the City and are a critical Component Of its future; WHEREAS; Part 1.9 of the CRL ("Part 1.9") provides that a Community .Development Commission may continue in operation if a city or county that includes a Community Development Commission adop0 an ordinance agreeing to comply With and participate in the Alternative Voluntary RedevelopMefit Program established in Part 1.9 ("Program"); Resolution No. Page 2 of 3 WHEREAS, as a conditioh of the Commission's continued existenee and Operation Of its Community Development Conun4,sion, the City is required to make Certain .annUaii-einittanCes to the County Auditor-Controller 1 .ursuant to Chapter 3 of Part 1.9, beginning with a larger upfront remittance for the 2011-12 Fiscal Year ("First Remittance"), to be paid in two equal installments on January 15, 2012 4ncl May 15, 2012; WHEREAS, the City and Commission desire to enter into an agreement pursuant to CRL Section 34194.2 whereby the Commission shall make an initialfraiiSfer of a portion - of its tax increment to the City in an amount less than or equal to the First Remittance, and thereafter - to transfer amounts of tax increment less than or equal to any subsequent reMittance'which•the City is required to make to the County Auditor-Controller pursuant to the City's participatidn in the Program ("Agreement to Transfer Tax Increment"); 1 'WHEREAS, Section 34194.3 of the CRL authorizes the Commission to reduce its payment to the Low and Moderate, Income Housing Fund for the fiscal Year 2011-2012,40n. a finding that there are insufficient available funds to make regular debt payments and the payment allowed under Section 34194.2. WHEREAS, the California Supreme Court on August 11, 2011 issued a Partial-. -stay ("Stay") on the operative effects of ABX1 26 and ABX1 27 in the Case of • California Redevelopment Association, et al.lv. Ana Matsonantos, et al. Case No. S194861. NOW, THEREFORE, BE IT RESOLVED by the Community Developinent Commission of the City of West Covina, as follows: • SECTION 1. The foregding Recitals are incorporated into this Resolution by this reference, and constitute a material part of this Resolution. . . SECTION 2. The Conunission finds that there are insufficient .funds available,Mthe accounts of the Community Rede4elopmont Commission for the fiscal year of 2010012 to pay all existing obligations, program payments, operations - expenses arid the paYthent obligation§ to the City pursuant to and as authorized by Section 34194.2 of the CRL. SECTION 3. To the extent necessary to pay all of the Commission existing Current obligations, program payments, operations expenses and the payment obligations to the City pursuant to and as authorized by Section 34194.2 of the CRL, the ComMisSion authotizeS funds to be exempted fi-om the regular 20% allocation to the Low and Moderate IficOme Homing Fund for the fiscal year 2011-2012. ! SECTION 4. The Agreenilent to Transfer Tax Increment, attached hereto as Exhibit "A" is approved and the Executive Director is authorized to execute the Agreenient and any Other documents necessary to implement the Agreement. SECTION 5 To the extent the Stay may be interpreted to disallow or prohibit the adoption of this Resolution for 'any period of time, then any actions of the ConiiniSsion in adopting this Resolution shall be deemed to have occurred .at a time when such disallowance or prohibition was not, in effect without further action by the Commission. If there is a final determination by a court of competent jurisdiction that AB 1X 26 and AB 1X 21 are invalid, this Resolution shall be deemed to -be null and void and of no further force or effect. SECTION 6. The Agen4 Secretary shall certify as to the passage and adoption of this Resolution, and it shall thereupon take effect and be in full force, i .eXCept that this -ReMntion shall not be effective during any period of time that the Stay remains effective. APPROVED AND ADOPTED at 'aspecial meeting of the Community Redevelopment Commission of the City of West govina this 23 rd day of August 2011. Resolution No. Page 3 of 3 Chairperson Steve Herfert ATTEST: Commission Secretary Laurie Car4co I LAURIE CARRICO, COMMISSION SECRETARY, of the City of West Covina CoMmunity Development Commission do hereby certify that the foregoing teSollition Was duly adopted by the Community Development CoMMission of the City of West Covina at a meeting thereof held on the 23 rd day of August 2011, b3 ; the following vote: AYES: NOES: ABSENT: ABSTAIN Commission Secretary Laurie Carrico APPROVED AS TO FORM: General Counsel to the CDC Arnold Alvarez-Glasman EXHIBIT A AGREEMENT TO TRANSFER TAX INCREMENT This Agreement to Transfer [Tax Increment ("Agreement") is dated. , 2011 for reference purposes only anS, is entered into by and between the City of West Covina, a California municipal corporation ("ity") and the Community DeVelOpment•ConuniSsion of the City of West Covina, a California community development commissiOn ("CoMthission"): RECITALS. WHEREAS, the Communiiy Development Commission of the City of West Covina is a community development commission organized and existing under and pursuant to the California Community Developmet Commission Law (Part 1.7 of Division 24, commencing with Section 34100, of the Health Jand Safety Code of the State of California) (the "CDCL"); and WHEREAS, the City Couhcil of the City of West Covina approved and adopted the Redevelopment Plans for the fo4Wing Redevelopment Projects ("Itedel6pineitt Plans") covering certain properties within tl?ie City (the "Project Areas"): 1. On December 20, 4971 the West Covina City Council adopted the original Central Business District Redevelopment Project Area by adoption of Ordinance No 1180. 2. On July 14, 1975 the West Covina City Council adopted the original Eastland Redevelopment Project Area by ad4tion of Ordinance No. 1269. 3. On December 21, 19.93 the West Covina City Council approved the Merger of the Central Business District and th Eastland Redevelopment Project Areas by adoption of Ordinance No. 1927 and Ordinance No. 1928, which adopted the Merged area as the West Covina Redevelopment Project Arella and added three non-contiguous areas to the merged project area; and WHEREAS, Parts 1.8, 1. added to the Community Redeye] 33000, of the Health and Safety ( ABX1 27, which measures putpc which are trailer bills to the 2 Legislature on June 15, 2011, and and 1.9 of Division 24 of the Health and Safety Code were Iment Law, Part 1 of Division 24, commencing with Section de of the State of California (the "OW) by ABX1 26 and to become effective immediately. ABM: 26 and ABX1 27, 1-12 budget bills, were apProVed by both houses of the ;tied by the Governor on June 28, 2011; WHEREAS, Part 1.85 of he CRL ("Part 1.85") provides for the statewide. dissolution of all redevelopment agencies, inOuding the City of West Covina Community Development Commission, as of October 1, 2011, and provides that, thereafter, a .successor agency is to administer the enforceable obligations of the Commission and otherwise Wind up the Commission's affairs, all subject to4he review and approval of an oversight cdintnittee; -WHEREAS, Part 1.8 of the CRL ("Part 1.8") provides for the restriction of actiVities and authority of the Agency in tli le interim period prior to dissolution to Certain "enforceable 1. The foregoing Recitals are incorporated into this Agreement by this teferenCe,:and constitute a material part of this Adeement. 2. Pursuant to the auth6rity of Section 34194.2 of the CRL,. Conitnission. agrees, to transfer to City a portion of its tax increment revenue in an amount less than or equal to the First Remittance, and thereafter to trans+ to City amounts of tax increment revenue less than or equal to any subsequent Annual Remittances which the City is required to make to the County Auditor-Controller pursuant to the dity's participation in the Program. 3. In consideration of the transfer of the above tax increment revenues, City agrees to pay the First Remittance to the Los Angeles County Auditor-Controller, and to pay Such subsequent Annual Remittances as may be necessary to remain in compliance with the Program. Pursuant to Section 34194.2 of the CRL the City agrees to use such transfened tax increment funds for the purpose of financin0 activities within the redevelopment area that are related to accomplishing the redevelopment agency project goals. 4. This agreement doe's not constitute and shall not be interpreted as creating an obligation on the general fund bf the City to pay the First Remittance , or any Annual Remittances. While the City currently intends to make these community remittances, they shall be made under protest and witho4 prejudice to the City's right to recover such amounts and interest thereon, to the extent there is a final determination that AB X1 26 and AB kl 27 are unconstitutional. 5. The parties acknowledge that the City's decision to participate in the Program is based on the Commission's commitment to provide the funding for the City's "annual remittance payments. The City, once it agreesIto participate in the Program, is obligated to Make the annual remittance payments to the Los Angeles County Auditor-Controller, but the soince of the City payments shall be only from the fulads provided by Commission Pursuant to this Agreement. The City shall be under no obligatien to provide funding from any souree other than CominissiOn to make the annual remittance payments. 6. The City has received the California Depai inent of Finance's ("CDOF'!) calculation of the amount of the Oily's remittance payment for FY 2011-12, which is $5,850,000. In connection with any appeal of this amount by City, Commission shall provide the City With all necessary information and documents and assist the City in the preparation of appeal documents. 7. For years subsequent to FY 2011-12, the City is obligated to inform CDOF, the State Controller and the County byl November 1 of the amount of the remittance payment that is to be made for such fiscal year Commission shall assist the City in Calculating the amount Of the remittance payments pursuant tO the formula set forth in Section 34194(c). Commission shall , provide the City with all necessa4i information and documents requested by the City to assiSt with the calculation. 8. Should CDOF, the tate Controller or the County audit the City's Calculatibil of an annual remittance payment, determine that a miscalculation was made and adjust the ainOfint of the City's next annual remittance payment, the Commission shall include the adjustment amount in its next transfer of funds`, to the City (or be provided a credit should the audit show that 3 the City's payment was in excess ot the amount actually due and the City is provided a credit for the excess amount). At least 21 remittance payment to the County, each such installment payment. C reserve adequate funds from lawl necessary for the annual remittance 10. For the 2011-12 certain findings, to transfer tax inci Moderate Income Housing Fund ( Commission determine that it init City for the remittance payment required fmdings 'of Section 34194 days prior to the due date of each installment of the 'City's -,lorninission shall transfer funds to the City in the 'amount of - rrithission shall, in its annual budgeting pi obess identify and 1 sources, including tax increment from each project area, ransfer to the City. 3.1 year only, Part 1.9 authorizes Commission, upon making Ment funds that would otherwise be deposited in its Low and Housing Funds") to the City under this Agreerriefit. Should use Housing Funds to make the full transfer of funds to the the Commission shall so inform the City and make the 11. The City reserves the right, regardless of any First Remittance. or Annual Remittances paid pursuant to this Agreement, to challenge the legality Of AB X1 26 and AB X1 27. 12. To the extent that tli!e Stay may affect this Agreement, this agreeirient shall not be effective during any period of tin ie the Stay remains in effect. To the extent the,.,[ay may be interpreted to disallow or prohibitfthe adoption of this Resolution for any period of time, then any actions of the City Council oil! Commission in adopting this Resolution shall be deemed to have occurred at a time when such disallowance or prohibition was not in effect without -further action by the City Council or Conlission. 13. City shall not Make of time the Stay remains effective 26 and AB X1 27 are unconstit exhausted or unsuccessful, or ti Remittance or Annual Remittanc City's right to recover such am; deteimination that AB X1 26 determination that AB X1 26 and null and void and of no further for Ly First Remittance or Annual Remittances during the period if a court of competent jurisdiction determines that AB X1 onal and therefore invalid, and all appeals therefrorn are for filing an appeal therefrom has laPsed. Any Firk shall be made under protest and without .prejudice to the it and interest thereon in the 0-vent that :there is a final d AB X1 27 are uncOnstitutional. If thei -e is a final B X1 27 are invalid, this Agreerrient shall be deemed to be or effect. 14. City shall have nollobligation to repay to Commission any tax increirient -funds transferred to City by Agency pursUant to this Agreement. The sums transferred to City pursuant to this Agreement are transfers forIci onsideration and not a loan or advance of fiinds. 15. The parties ackn8wledge that the obligations of Commission undet this Agreement shall constitute an indebtedness of Commission for the purpose Of carrying out the redevelopment plan for ea.0. of Corrimission's redevelopinent project areas. 16. This Agreement may be executed in duplicate originals, each of which is deemed be an original. This Agreementllintegrates all of the terms and conditions mentioned herein or 4 incidental hereto, and supersedes 411 negotiations or previous agreenients between the parties with respect to the subject matter oil this Agreement. 17. This Agreement is intended solely for the benefit of the City and CO1T1111iSi011. r- Notwithstanding any reference in this .Agreement to persons of entities Other than the City and - Commission, there shall be no third party beneficiaries under this Agreement . . . anent of the provisions of this Agreement must be in writing iitatives of the parties. is, covenant or condition of this Agreement is held by a court thd, void or unenforceable, the remainder of the prO visions . ci unless the rights and obligations of the parties have been h invalidation, voiding or unenforceability. 18. Any waiver or and signed by the authorized 19. If any term, provisi of competent jurisdiction to be ir shall continue in full force and el materially altered or abridged by s. 20. This Agreement shall be binding on and shall inure to the benefit of all successors and assigns of the parties, whethe'r by agreement or operation of laIXT.. this Agreement .Shall survive any full or partial merger df the City and Commission and Shall remain in effect and be fully enforceable according to its terms. IN WITNESS WHEREOF, the date set forth herein below. CITY OF WEST COVINA By: City Manager Date: ATTEST and the Commission have sighed this Agreeinerit 'On the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF WEST COVINA By: Executive Director Date: ATTEST City Clerk Secretary APPROVED AS TO FORM: APPROVED AS TO FORM: City Attorney Commission Counsel TO: Andrew G. Pasmant, Executive Director and the Community Development Commission FROM: Thomas Bachman Finance Director SUBJECT: ENFORCEABLE OBLIGATIONS SCHEDULE RECOMMENDATION: It is recommended that the Community Development Commission adopt the following resolution: RESOLUTION NO. ________ A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF WEST COVINA APPROVING THE ENFORCEABLE OBLIGATIONS PAYMENT SCHEDULE DISCUSSION: The Senate and Assembly recently passed AB1X 26 (Dissolution Bill) and AB1X 27 (Continuation Bill) in extraordinary session as part of its state budget approval process. Both bills became effective when the Governor signed them into law on June 29, 2011. AB1X 26 prescribes strict limits on what redevelopment agencies may do between its effectiveness date and October 1, 2011, when all redevelopment agencies will be legally dissolved unless the City council enacts an ordinance pursuant to AB1X 27 committing itself to make continuation payments to school districts and special districts. Until a continuation ordinance is enacted, agencies are prohibited from entering into new agreements or indebtedness, except as necessary to carry out “enforceable obligations” entered into prior to June 29. Between June 29, 2011 and October 1, 2011, the agency can only make payments for obligations listed on an adopted enforceable obligations schedule. Enforceable obligations are defined as bonds, loans, payments to the federal government or imposed by state law, judgments or settlements and contracts, including contracts necessary for the continued administration or operation of the agency. The Agency Board is required to approve by resolution the adoption of an Enforceable Obligation Payment Schedule within sixty days of the adoption of AB1X 26 (August 26, 2011). The attached schedule contains all current obligations of the Agency including those established between the Agency and the City. In the event the Agency is not able to continue operating either by choice or the outcome of pending legal action, any obligations between the Agency and the City of West Covina may be invalidated as of October 1, 2011. FISCAL IMPACT: Assembly Bill AB1X26 eliminates redevelopment and establishes the terms by which agencies can continue to operate until they are dissolved. The Agency cannot spend any funds in the 2011-12 adopted budget unless the amounts are listed on the attached Enforceable Obligations Payment Schedule (Attachment 2). _____________________________ Prepared by: Tom Bachman Finance Director Attachments: No. 1 – Resolution No. 2 – Schedule of Enforceable Obligations City of West Covina Memorandum AGENDA Item No.: 2 Date: August 23, 2011 Attachment 1 RESOLUTION NO. ____ A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF WEST COVINA APPROVING THE ENFORCEABLE OBLIGATIONS PAYMENT SCHEDULE WHEREAS, the Community Development Commission of the City of West Covina (“Commission”) is a community development commission organized and existing under and pursuant to the California Community Development Commission Law (Part 1.7 of Division 24, commencing with Section 34100, of the Health and Safety Code of the State of California) (the "CDCL"); and WHEREAS, the City Council of the City of West Covina (“City”) approved and adopted the Redevelopment Plans for the following Redevelopment Projects (“Redevelopment Plans”) covering certain properties within the City (the “Project Areas”): 1. On December 20, 1971 the West Covina City Council adopted the original Central Business District Redevelopment Project Area by adoption of Ordinance No. 1180. 2. On July 14, 1975 the West Covina City Council adopted the original Eastland Redevelopment Project Area by adoption of Ordinance No. 1269. 3. On December 21, 1993 the West Covina City Council approved the Merger of the Central Business District and the Eastland Redevelopment Project Areas by adoption of Ordinance No. 1927 and Ordinance No. 1928, which adopted the merged area as the West Covina Redevelopment Project Area and added three non-contiguous areas to the merged project area; and WHEREAS, Parts 1.8, 1.85 and 1.9 of Division 24 of the Health and Safety Code were added to the Community Redevelopment Law, Part 1 of Division 24, commencing with Section 33000, of the Health and Safety Code of the State of California (the "CRL") by ABx1 26 and ABx1 27, which measures purport to become effective immediately. ABx1 26 and ABx1 27, which are trailer bills to the 2011-12 budget bills, were approved by both houses of the Legislature on June 15, 2011, and signed by the Governor on June 28, 2011; WHEREAS, Part 1.85 of the CRL (“Part 1.85”) provides for the statewide dissolution of all redevelopment agencies, including the City of West Covina Community Development Commission, as of October 1, 2011, and provides that, thereafter, a successor agency is to administer the enforceable obligations of the Commission and otherwise wind up the Commission's affairs, all subject to the review and approval of an oversight committee; WHEREAS, Part 1.8 of the CRL (“Part 1.8”) provides for the restriction of activities and authority of the Agency in the interim period prior to dissolution to certain “enforceable obligations” and to actions required for the general winding up of affairs, preservation of assets, and certain other goals delineated in Part 1.8; WHEREAS, the dissolution of the Commission would be detrimental to the health, safety, and economic well-being of the residents of the City of West Covina and cause irreparable harm to the community, because, among other reasons, the redevelopment activities and projects made possible, implemented, and funded by the Commission are highly significant and of enduring benefit to the community and the City and are a critical component of its future; WHEREAS, Part 1.9 of the CRL (“Part 1.9”) provides that a Community Development Commission may continue in operation if a city or county that includes a Community Development Commission adopts an ordinance agreeing to comply with and participate in the Alternative Voluntary Redevelopment Program established in Part 1.9 (“Program”); WHEREAS, as a condition of the Commission’s continued existence and operation of its Community Development Commission, the City is required to make certain annual remittances to the County Auditor-Controller pursuant to Chapter 3 of Part 1.9, beginning with a larger upfront remittance for the 2011-12 Fiscal Year (“First Remittance”), to be paid in two equal installments on January 15, 2012 and May 15, 2012; WHEREAS, Section 34169 of the CRL requires the Commission to adopt an Enforceable Obligations Payment Schedule within 60 days of the effective date of ABx1 26 and after said 60 day period Section 34167 of the CRL prohibits the Commission from making any payment which is not listed on an adopted Enforceable Obligations Payment Schedule. WHEREAS, the California Supreme Court on August 11, 2011 issued a partial stay ("Stay") on the operative effects of ABX1 26 and ABX1 27 in the case of California Redevelopment Association, et al. v. Ana Matsonantos, et al. Case No. S194861. NOW, THEREFORE, BE IT RESOLVED by the Community Development Commission of the City of West Covina, as follows: SECTION 1. The foregoing Recitals are incorporated into this Resolution by this reference, and constitute a material part of this Resolution. SECTION 2. The Enforceable Obligations Payment Schedule attached hereto as Exhibit "B" is approved and the Executive Director is authorized to transmit the same to the Los Angeles County Auditor-Controller, the State Controller and the State Department of Finance in accordance with Health and Safety Code Section 34169. SECTION 3 To the extent the Stay may be interpreted to disallow or prohibit the adoption of this Resolution for any period of time, then any actions of the Commission in adopting this Resolution shall be deemed to have occurred at a time when such disallowance or prohibition was not in effect without further action by the Commission. If there is a final determination by a court of competent jurisdiction that AB 1X 26 and AB 1X 27 are invalid, this Resolution shall be deemed to be null and void and of no further force or effect. SECTION 4. The Agency Secretary shall certify as to the passage and adoption of this Resolution, and it shall thereupon take effect and be in full force, except that this Resolution shall not be effective during any period of time that the Stay remains effective. APPROVED AND ADOPTED at a regular meeting of the Community Redevelopment Commission of the City of West Covina this _____ day of August 2011. Chairperson Steve Herfert ATTEST: ______________________________________ Assistant Commission Secretary Susan Rush I SUSAN RUSH, ASSISTANT COMMISSION SECRETARY, of the City of West Covina Community Development Commission do hereby certify that the foregoing resolution was duly adopted by the Community Development Commission of the City of West Covina at a meeting thereof held on the ______ day of August 2011, by the following vote: AYES: NOES: ABSENT: ABSTAIN: ______________________________________ Assistant Commission Secretary Susan Rush APPROVED AS TO FORM: General Counsel to the CDC Attachment 2 Name of Redevelopment Agency:West Covina Community Development Commission Project Area(s)Merged & Citywide ENFORCEABLE OBLIGATION PAYMENT SCHEDULE Per AB 26 - Section 34167 and 34169 Project Name / Debt Obligation Payee Description Aug Sept Oct Nov Dec Total 1)1999 Tax Allocation Bonds US Bank Fund capital projects in the Merged Area 8,897,866.00 143,200.00 1,100.00 131,100.00 1,100.00 1,100.00 1,100.00 135,500.00$ 2)2002 Tax Allocation Bonds US Bank Repay outstanding 1993 bonds 13,134,847.00 986,603.00 777,736.00 777,736.00$ 3)1996 CFD Refunding Bonds US Bank Fund Fashion Plaza Improvements 51,170,899.00 3,684,800.00 2,656,100.00 2,656,100.00$ 4)1988 Lease Rev Refunding Bnds Wells Fargo Bank Fund the Lakes Parking Project 6,847,414.00 446,850.00 394,738.00 4,738.00 4,738.00 4,738.00 4,738.00 413,690.00$ 5)BLD Debt Service City of West Covina Reimburse City for BLD Debt Service 33,716,425.00 1,103,000.00 91,917.00 91,917.00 91,917.00 91,917.00 91,917.00 459,585.00$ 6)SERAF 2010 Housing Loan WCCDC LMIH Fund Repay SERAF to the housing fund 6,529,308.00 0.00 -$ 7)SERAF 2011 Housing Loan WCCDC LMIH Fund Repay SERAF to the housing fund 1,342,977.00 0.00 -$ 8)DDA - The Lakes Various Bond admin & maint for park structure 1,800,000.00 210,000.00 17,500.00 17,500.00 17,500.00 17,500.00 17,500.00 87,500.00$ 9)OPA - CFD Westfield et al CFD admin & Developer repayment 7,652,298.00 1,050,000.00 145,000.00 145,000.00$ 10)SB2557 Admin County of Los Angeles Tax Collection Services 9,428,048.00 256,000.00 21,333.00 21,333.00 21,333.00 21,333.00 21,333.00 106,665.00$ 11)Housing Set Aside Low Mod Hsg Authority 20% Set Aside for low mod hsg 131,145,046.00 3,922,000.00 326,833.00 326,833.00 326,833.00 326,833.00 326,833.00 1,634,165.00$ 12)Nissan Sales Tax Guarantee Sage Nissan Sales Tax Contribution Agreement 800,000.00 0.00 -$ 13)Passthrus Other taxing entities Passthrus per agreements and code 338,111,418.00 3,922,000.00 326,833.00 326,833.00 326,833.00 326,833.00 326,833.00 1,634,165.00$ 14)Repay County Deferral County of Los Angeles Begin repayment 10,085,562.00 2,500,000.00 137,388.00 988,738.00 137,388.00 137,388.00 137,388.00 1,538,290.00$ 15)Non personnel operation cost Various Operations for both project areas 75,979,376.00 2,470,889.00 205,907.00 205,907.00 205,907.00 205,907.00 205,907.00 1,029,535.00$ 16)Employee Costs Various employees Salaries and benefits for personnel 58,767,980.00 1,728,470.00 144,039.00 144,039.00 144,039.00 144,039.00 144,039.00 720,195.00$ 17)CSS - CFD CSS Com Fac Dist CFD Assessment 4,803,381.00 73,370.00 6,115.00 6,115.00 6,115.00 6,115.00 6,115.00 30,575.00$ 18)City Note - Administration City of West Covina Repay City for admin & construction 19,789,504.00 1,483,600.00 123,633.00 123,633.00 123,633.00 123,633.00 123,633.00 618,165.00$ 19)City Note - CIP City of West Covina Repay City for capital projects 3,604,284.00 259,783.00 21,649.00 21,649.00 21,649.00 21,649.00 21,649.00 108,245.00$ 20)City Note Revolving City of West Covina Repay City for revolving credit 8,318,522.00 556,617.00 46,385.00 46,385.00 46,385.00 46,385.00 46,385.00 231,925.00$ 21)Sales Tax Reimbursement City of West Covina Reimburse City for CFD Sales Tax 32,288,686.00 1,006,336.00 83,862.00 83,862.00 83,862.00 83,862.00 83,862.00 419,310.00$ 22)City Line Of Credit City of West Covina Line of Credit for Merged Area 11,686,347.00 0.00 -$ 23)Cooperation Agreement Various 46 Projs (less golf crse) under coop agmt 415,840,000.00 0.00 -$ 24)Golf Course Agreement Various Golf Course Implementation Agreement 45,000,000.00 0.00 -$ 25)2011-12 ABX1 27 Voluntary Pymt LA County ERAF One time pymt required under AB 27 5,850,000.00 5,850,000.00 -$ 26)Ongoing ABX1 27 Voluntary Pymt LA County ERAF Ongoing pymt required under AB 27 47,600,000.00 0.00 -$ 27)1998 Housing Set Aside Bonds US Bank Acquisition and rehab of a housing proj 6,499,343.00 434,516.00 317,286.00 317,286.00$ 28)2001 Housing Set Aside Bonds US Bank Development of a senior housing proj 12,136,937.00 769,376.00 581,158.00 581,158.00$ 29)-$ 30)-$ -$ Totals - This Page 1,368,826,468.00$ 32,857,410.00$ 1,949,232.00$ 6,872,862.00$ 1,559,232.00$ 1,704,232.00$ 1,559,232.00$ 13,644,790.00$ Grand total - All Pages 1,368,826,468.00$ 32,857,410.00$ 1,949,232.00$ 6,872,862.00$ 1,559,232.00$ 1,704,232.00$ 1,559,232.00$ 13,644,790.00$ Total Outstanding Debt or Obligation Payments by monthTotal Due During Fiscal Year City of West Covina Memorandum AGENDA Item No.: _____3______ Date: _August 23, 2011_ TO: Andrew G. Pasmant, City Manager FROM: Tom Bachman, Assistant City Manager SUBJECT: SAFER Grant Side Letter RECOMMENDATION: It is recommended that the City Council approve the SAFER Grant Side Letter Agreement. DISCUSSION: As part of the 2010-11 adopted budget, one of the five engine companies in the City was removed from service. Following this service reduction, the Fire Chief applied for, and in March 2011 the City was awarded, a Staffing for Adequate Fire and Emergency Response (SAFER) grant by FEMA in the amount of $3,051,313. This grant will allow the City to hire twelve additional firefighters and reinstate an engine company in all five fire districts. The period for the grant is two-years, plus a third year at City expense unless a financial hardship prevents the City from being able to fund the positions for the third year. Part of the implementation of the grant calls for an alternative staffing model that fall outside of the model that is identified in the current MOU with the West Covina Firefighters Association (FFA). Because this alternative model is a change from the existing MOU with FFA, the association had to agree to this arrangement. The City negotiated with FFA the implementation of this alternative model for the term of the grant and also was able to achieve some concessions for the new employees to be hired under the grant. The negotiated items of agreement are contained in a Side Letter Agreement (Attachment 1) and consist of the following main points:  The term of the side letter is for the period of the grant. Any changes to the staffing model are for the period of the grant.  The alternative staffing model will include a Light Force combination that will operate together at all times, which consists of a two-person engine (engineer and firefighter) and a four-person ladder truck (captain, engineer and 2 firefighter/paramedics). The fourth person on the ladder truck may be assigned to fill temporary vacancies in the firefighter/paramedic rank on a daily basis.  The alternative staffing model will include 9 firefighter positions, three per shift.  New hires will be under a second tier pension with the 3% @ 55 formula, single highest year final compensation.  New hires will serve one year at step 1 of the salary range, as compared to the current 6- month period.  If a reduction in service is necessary at the end of the grant term, employees hired under the grant will not be considered regular employees and will have no rights to any provisions of the City’s layoff policy. Receipt of the grant allows the City to increase the level of service to the City and provides and provides an engine company with water-pumping capabilities in all five fire districts. The agreement with the association allows the City to implement an alternative staffing model that increases the service level while achieving budgetary savings for the next two years. FISCAL IMPACT: The City will receive almost $1.5 million in grant funds during the 2011-12 fiscal year. The net savings to the General Fund, after including the costs for additional positions, is estimated at $825,000. These financial impacts of the grant have been included in the 2011-12 fiscal year budget. Prepared by: _________________________ Tom Bachman Assistant City Manager SAFER Grant Side Letter Agreement TERM OF SIDE LETTER AGREEMENT The term of any agreements specified in this side letter will mirror the term of the SAFER Grant. At the end of the term of the SAFER Grant all staffing will revert to previously established staffing levels in the current MOU, unless the current operational model is modified by a successor MOU. For reference, the current staffing model is as follows: ALS Engines (Staffed with 1 Captain, 1 Engineer, 1 FF/PM), 1 ALS Truck (Staffed with 1 Captain, 1 Engineer, 1 FF/PM), and 3 ALS Rescue Ambulances (Staffed with 2 FF/PM on each of three R.A.’s). However, the parties shall have the right to meet and confer regarding the issues set forth in this side letter during any negotiations for a successor MOU that occur during the term of the SAFER Grant, with the exception of the agreed upon staffing model for the term of the Safer Grant. RETIREMENT FORMULA In order to facilitate the SAFER Grant funding, the West Covina Firefighters Association recognizes that the City will establish a second tier for pension formulas and all NEW FIRE sworn safety personnel, hired after July 1, 2011 will be under the PERS 3% @ 55 formula, single highest year final compensation. All other optional benefits of the current plan remain intact. STAFFING CHANGES Employment of Fire Safety Personnel under the grant shall be grant-funded positions and said personnel shall have no property interest in their continued employment at the conclusion of the grant period. If the grant lasts for a period of more than one calendar year, then Fire Safety Personnel hired under the grant shall serve a minimum one-year probationary under the same conditions as Fire Safety Personnel not hired under the grant. Employees hired under the grant shall also serve one year at step 1 of the salary range. Fire Safety Personnel hired under the grant may be converted from grant-funded status to regular status as positions open up due to vacancies created by separation from service and/or promotions/demotions in regular, non-grant classifications. The decision to convert employees from grant-funded to regular status shall be at the sole discretion of the Fire Chief. Fire Safety Personnel converted from grant- funded status to regular status will not be required to serve an additional probationary period beyond their original one-year period. In the event of a reduction in force/lay-off situation, Fire Safety Personnel hired under the grant shall be subject to a separate reduction in force/lay-off procedure that shall be implemented prior to the implementation of reduction of force/lay-off procedures applicable to personnel not hired under the grant or those that were hired under the grant but converted to regular status before the effective date of the layoff. Reduction in force/lay-off for Fire Safety Personnel hired under the grant shall be by reverse seniority, with no right to bump to another position nor rights to any other provisions of the City’s layoff policy (Personnel Rule XI). Any promotions will be for the term of the grant, unless during that period, regular positions are created through attrition, retirement or other conditions and the employee is converted from grant-funded status to regular status. UNIT STAFFING The City of West Covina and the West Covina Firefighters Association, Local 3226 recognize and agree that the current operational model will be modified during the term of the SAFER grant. The current operational model is currently staffed with 4 ALS Engines, 1 ALS Truck Company, and 3 ALS Rescue Ambulances. The operational model to be used during the term of the SAFER Grant, will consist of the following: A. Two (2) BLS Engine staffed with a minimum per BLS Engine: a. 1 Captain b. 1 Engineer c. 1 Firefighter B. Two (2) ALS Engines staffed with a minimum per ALS Engine: a. 1 Captain b. 1 Engineer c. 1 Firefighter/Paramedic C. One (1) Light Force with a minimum: a. 1 Captain b. 2 Engineers c. 1 or 2 Firefighter/Paramedics i. “Relief” Firefighter/Paramedic assigned to the Light Force, unless utilized to fill first occurring vacancy on shift. d. 1 Firefighter D. Three (3) Paramedic Rescue Ambulances a. 2 Firefighter/Paramedics per R.A. During term of the grant one relief Firefighter/Paramedic per shift, if assigned, shall be used to fill one temporary vacancy per shift prior to calling in off-duty qualified relief. Said vacancy shall be the first position to be vacant known to the scheduling Captain. After said one position per shift is filled, then off-duty qualified relief shall be obtained consistent with current department practice. LIGHT FORCE A “Light” Force shall be implemented and normally consist of a Ladder Truck and an Engine with modified staffing. A. Ladder Truck (ALS). a. 1 Captain b. 1 Engineer c. 1 Firefighter/Paramedic d. 1 “Relief” Firefighter/Paramedic (Shall be used to fill first vacancy of shift) B. Engine with modified Staffing a. 1 Engineer b. 1 Firefighter Ladder Truck and modified Engine will operate together at all times as two-piece unit, and under no circumstances operate as separate apparatus/units. HOUSING During the term of the SAFER Grant, a maximum surplus of three relief firefighter/paramedics, one per shift, will be maintained as part of the Light Force. When not assigned to fill a vacancy, relief FF/PM Personnel will be assigned to the Ladder Truck as the fourth person on the Ladder Truck. Unless previously reassigned to cover a vacancy, Relief Firefighter/Paramedic personnel will report to the Light Force by 0800 and shall report to their assigned station as soon as possible, if necessary, but not later than 0830 unless circumstances dictate a reasonable extension of this arrival time. Relief Firefighter/Paramedic personnel required to travel from the Light Force to their assigned station shall be assigned a Fire Department vehicle for that purpose if available. The employees may also be driven to their assigned station by Fire Department management, if practical under the circumstances. Relief personnel shall only be required to drive their personal vehicles for such purpose under unusual circumstances. Relief personnel driving from the Light Force to their assigned station shall be considered to be acting within the course of their employment while en route to their assigned station under these circumstances. STRIKE TEAM ASSIGNMENTS West Covina Fire Department S.O.P. 211.04 will be followed for staffing Strike Team Engines, including: A. Relief Firefighter/Paramedic personnel will not be used to staff Strike Team Engines; B. Strike Team Engines shall be staffed by one Captain, one Engineer and any combination two Firefighters and/or Firefighter/Paramedics. C. FF/PM personnel may be used to backfill units as required to cover fire districts affected by Strike Team deployment. BIDDING/ASSIGNMENTS A. Assignment of all FF/PM’s to accommodate Probationary Employee’s shall only occur within shift to minimize scheduling impacts prior to any rebid. 1. Any affected members shall remain on current shift through end of year 2011, to the extent possible. B. WCFA retains all other bid rights under Section 31 of current MOU. C. All positions, including relief FF/PM’s assigned to fill vacancies as they occur, are open to bid. D. WCFA reserves the right to implement a full re-bid prior to the end of 2011. CONCLUSION OF SAFER GRANT PERIOD Any promotions or personnel over and beyond what is necessary to staff the constantly manned units at the conclusion of the grant period will be demoted or eliminated. Only regular employees will continue employment with the City after the term of the SAFER Grant. Regular employees who remain employed with the City after the term of the grant will have their service time served under the grant counted towards longevity and for promotional purposes. A. Demotions will be determined by seniority in classification. B. Reduction of personnel hired under the grant (unless converted to regular status prior to effective date of layoff) will be determined by seniority in classification, only involving personnel hired through SAFER Grant funding, with no right to bump to another position, nor rights to any other provisions of the City’s layoff policy (Personnel Rule XI). C. The one (1) current Firefighter employed prior to the SAFER grant will retain his bid rights. WEST COVINA FIREFIGHTERS’ ASSOCIATION CITY OF WEST COVINA ___________________________________ ___________________________________ Michael Fountain, President Thomas Bachman, Assistant City Manager ____________________________________ ___________________________________ Paul Krueger, Representative Michele McNeill, Acting Human Resources Dir. IN WITNESS WHERE OF, the parties have caused this Agreement to be executed this _______ day of August, 2011. ____________________________________ ____________________________________ Michael Fountain, President Andrew Pasmant, City Manager