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02-15-2011 - Cooperation Agreement between the City of West Cov - Item 5 (2).pdfCity of West Covina Memorandum TO: FROM: AGENDA " ITEM NO. 5 Andrew G. Pasmant, City Manager and DATE February 15, 2011 Executive Director and City Council and the Community Development Commission Christopher J. Chung Community Development Commission Director SUBJECT: COOPERATION AGREEMENT BETWEEN THE CITY OF WEST COVINA AND COMMUMTY DEVELOPMENT COM1VIISSION FOR PAYMENT OF APPROXIMATELY $460,840,000 FOR COSTS ASSOCIATED WITH CERTAIN COMMUNITY DEVELOPMENT COMMISSION FUNDED CAPITAL IMPROVEMENT, PUBLIC IMPROVEMENT AND AFFORDABLE HOUSING PROJECTS LOCATED WITHIN THE CURRENTLY DESIGNATED REDEVELOPMENT PROJECT AREAS. RECOMMENDATION: is recommended that the City Council adopt the following resolution: RESOLUTION NO. - A RESOLUTION OF THE CITY OF WEST COVINA APPROVING AND AUTHORIZING THE EXECUTION OF A COOPERATION AGREEMENT WITH THE CITY OF WEST COVINA AND MAKING CERTAIN FINDINGS IN CONNECTION WITH THE PROVISION OF PUBLIC IMPROVEMENTS, THE IMPLEMENTATION OF CERTAIN HOUSING AND OTHER ACTIVITIES AND AUTHORIZING SUCH IMPROVEMENTS IN CONNECTION THEREWITH 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 AND AUTHORIZING THE EXECUTION OF A COOPERATION AGREEMENT WITH THE CITY OF WEST COVINA AND MAKING CERTAIN FINDINGS IN CONNECTION WITH THE PROVISION OF PUBLIC IMPROVEMENTS, THE IMPLEMENTATION OF CERTAIN HOUSING AND OTHER ACTIVITIES AND AUTHORIZING SUCH IMPROVEMENTS IN CONNECTION THEREWITH DISCUSSION Redevelopment, directly and indirectly, promotes quality of life improvements for the community. One of the important reasons for the success of Redevelopment is the ability of local officials to design and implement programs that achieve goals established locally without having to obtain state level approvals. Redevelopment benefits include blight elimination, job creation, affordable housing development, increased sales tax, transient occupancy tax generation, economic development, open space development, and implementation of public projects, infrastructure improvements and pedestrian amenities. Redevelopment is a catalyst for change as public improvements and investments leverage private investment and breathe new economic life into the city. ZAWAEcd\ecd1065ml.doc Over the last ten years, the CDC has utilized redevelopment practices to develop over 7.6 million square feet of development projects with an assessed valuation of over $450 million; created over 5,300 jobs; and over $8 million in new revenues (sales and property tax) to the City of West Covina. In addition, the CDC has been a leader in providing assistance to increase and improve affordable housing within the City. Since 1971, the West Covina CDC has provided funding to rehabilitate over 2,113 affordable housing units through its (home improvement) housing programs; assisted 142 first time buyers through the previous implemented First Time Homebuyer Program; and has developed over 705 new affordable housing units in the community. Without the effects of redevelopment, the following projects would not have generated revenues to the City, State, schools and other entities. Some of the projects include: West Covina Heights, Auto Center expansion, Sage Nissan, Citrus Grove, Nogales Medical Plaza, The Curve, Elephant Bar Restaurant, West Covina Senior Villas I 86 II, Big League Dreams, etc. The CDC has adopted Five-Year Implementation Plans, which establish goals to support economic development, commercial, community and institutional revitalization as well as the creation and preservation of affordable housing. To implement the programs, activities and projects associated with each goal, CDC had made redevelopment fund commitments based on estimated available tax increment revenue and debt financing structures. Currently, CDC is actively involved in the development of various projects that have been identified in the 2010-2014 Five-Year Implementation Plan. Many of the identified projects will accelerate the economic recovery of the City as well as ensure the creation of locally based, quality jobs. The projects are listed in Attachment No. 1 On January 10, 2011, Governor .Brown released his Fiscal Year 2011-2012 budget proposal, which has yet to be reviewed and acted upon by the State Legislature -. The Governor's budget proposal to eliminate redevelopment agencies throughout the . State by' July 1, 2011 would adversely impact local government. As such, the CDC's ability to carry out these objectives may be limited. Pursuant to the California Redevelopment Law, Health & Safety Code Section 33220, certain public bodies, including the City may -aid and cooperate in the planning, undertaking, construction and operation of redevelopment projects. Building on this sucCess, CDC desires assistance and cooperation in the implementation and completion of these activities (Attachment No. 1). It is estimated that the total cost for the implementation and completion of these activities are estimated at $460,840,000. By entering into the Agreement, CDC will pledge the unencumbered resources in the current FY2010-11 Budget; and the. Net Tax Increment (defined as gross tax increment, less County Administrative -Fees, 'statutory pass-throughs to other taxing entities and debt service) from FY2011-12 through the expiration of the project areas. The purpose of this Agreement is to facilitate the implementation of the activities listed in Attachment No. 1 pursuant to the terms and conditions outlined in the Agreement. Under the Cooperation Agreement, CDC will enter into a contract with the City providing that, among other things, the City will perform certain eligible activities on behalf of the CDC including installation of publicly-owned capital improvements, public improvements, the creation and preservation of affordable housing projects and 'other redevelopment projects located throughout the West Covina Redevelopment Project Area and Citywide Redevelopment Project Areas. The contemplated activities are beyond those normally. provided by the City and are specifically intended -to assist CDC in addressing the removal of blight and prevention of the recurrence of blight. The obligation to pay tax increment, as set forth in the Agreement, shall constitute an indebtedness of the CDC for the purpose of carrying out the Redevelopment Plans for each of the affected project areas. Given the nature of the recommended action (entering into a cooperation agreement for payments of costs associated with potential future redevelopment activities), conducting analysis under the California Environmental Quality Act (CEQA) is premature at this -time and is not currently required. It should be noted that anticipated developments within each of the CDC's existing redevelopment project areas -were evaluated as part of the,red.evelopment plan adoption process, pursuant to the provisions of CEQA. In addition, each individual- capital improvement, public Z:\wp\ecd\ecd1065ml.doc - Andrew G. Pastnant, City Manager and the City Council February 15, 2011 •Page 3 improvement or affordable housing project/activity listed in this memorandum has already been or will be reviewed separately in full compliance with the requirements of CEQA prior to project approval and/or implementation, unless exempted under CEQA. FISCAL IMPACT: Each of the redevelopment programs and activities are more fully described in the project area's respective Five-Year Implementation Plans, each of which have been previously approved by the CDC Board following a duly-notice public hearing. The action will contractually commit available resources and projected Net Tax Increment from each of the active redevelopment project areas from FY2011-12 through the expiration of the project areas to the extent that such funds are realized and available. There is no adverse impact on the City's General Fund as a result of this action; funds will flow to the City to implement the Agreement. °\1\NAg • Prepared by: Mike Lee Reviewed & Approved by: Christopher J. Chung Assistant Director CDC Director approved via e -mail Reviewed & Approved by: Arnold M. Alvarez-Glasman Finance City Attorney. Attachments: No. 1 - List of Activities (including programs, projects) No. 2 -Resolution City of West Covina No. 3- Resolution Community Development Commission Z:\wp\eccRecd1065ml.doc ATTACHMENT NO. 1 r-rr rim= mt1I nott/IMIT/=nrt Al rtnfiln rtMt/r=t rlOtt/IMMT DP ft IPrr'M Projects . Project Cost Project Area Description Amar/Azusa (Island Plaza shopping Center) $1,000,000 Citywide RPA Re-tenanting of vacancies at shopping center located on southeast corner of Amar/Azusa. Auto Dealership Retention and Expansion $20,000,000 West Covina RPA Renovation and development of new dealerships on Auto Row. Auto Center Sign $1,500,000 West Covina RPA Replacement of existing Auto Center Sign. Azusa/Aroma (South Hills Plaza) $1,500,000 Citywide RPA Facade/building/site improvement and re-tenanting at South Hills Plaza. Citrus/VVorkman (Citrus Grove) $1,500,000 West Covina RPA Facade/building/site improvement and tenanting assistance at Citrus Grove. Civic Center Development $5,000,000 West Covina RPA Development of a commercial project on City-owned civic center property. Civic Center (County Library Parking) $1,000,000 West Covina RPA Relocation of library parking from City property to Los Angeles County property. Country Club Center.(McIntyre Square) $2,000,000 West Covina RPA Facade/building/site improvement and tenant assistance of blighted shopping center. Eastland Shopping Center $2,000,000 West Covina RPA Facade/building/site improvement and re-tenanting at Eastland Shopping Center. Economic Development and Job Creation $9,420,000 Entire City Promotion and marketing of West Covina to attract businesses and jobs. Former Crazyharse $1,000,000 West Covina RPA Re-tenanting of Former Crazyhorse site. Glendora Downtown (mixed used development) $40,000,000 West Covina RPA Redevelopment of downtown fore potential mix-used development along Glendora Avenue. Glendora Downtown branding program $500,000 West Covina RPA Development of a comprehensive branding and signage program for downtown area. Glendora Downtown (Lakes Entertainment Center) $2,500,000 West Covina RPA Re-tenanting of vacancies at the Lakes Entertainment Center. Glendora Downtown (Edward's Theater) $5,000,000 West Covina RPA Facade improvement and remodeling of the theater. Glendora Downtown (ForrnerWickes site) $20,000,000 West Covina RPA Redevelopment of former Wickes site for a mixed use (housing and commercial) development Image Enhancement $2,000,000 Entire City Improve image of project areas through banner programs, theme signage, and marketing. K-Mart Site . $20,000,000 West Covina RPA Redevelopment of K-Mart center. K-Mart Site (Credit Union property) $1,500,000 West Covina RPA Redevelopment of vacant Credit Union property for a commercial use. Nogales/La Puente (Ouailridge Shopping Center) 52,000,000 Citywide RPA Re-tenanting of vacancies at shopping center located on Nogales/La Puente. , Public Infrastructure $3,000,000 Entire City Streetscape design, pedestrian walkways and provide for general infrastructure and utility improvements. Public Infrastructure (Freeway enhancement) $3,000,000 Entire City Landscaping and beautification of freeway entrances. Public Infrastructure (Azusa/Amar improvements) . $500,000 Citywide RPA Intersection improvements on Azusa/Amar Road. Public Infrastructure (Azusa Avenue Street Rehabilitation) $1,700,000 Entire 'City Street rehabilitation from Giambi Way to North City Limits. Public Infrastructure (Mass Transit Center) , $2,000,000 West Covina RPA Development of a mass transit center in conjunction with Foothill Transit Public Infrastructure (High Speed Rail Transit Station) $30,000,000 West Covina RPA Development of a high speed rail station and parking structure at the Westfield Mall. Public Infrastructure (Fire station) $10,000,000 Entire City Construction of a new fire station and related infrastructure improvements. Restaurant Row $2,000,000 West Covina RPA Facade, sign, and parking lot improvement of restaurant row. Shopping Center Renovation $10,000,000 Entire City Facade improvements and marketing programs to promote struggling shopping centers. Strategic Development (West Covina Parkway Plaza) $1,000,000 West Covina EPA Re-tenanting of vacancies at shopping center located on West Covina Parkway Plaza. Strategic Development (Marketplace II) $5,000.000 West Covina RPA Re-tenanting of vacancies at shopping center located on Lakes Drive. ' West Covina Sportsplex (Golf Course) $45,000,000 West Covina RPA Development of a 18 hole golf course on the former BKK landfill. West Covina Sportsplex (waterline) - $5,000,000 West Covina RPA Development of waterline system to support golf course and future development on remainder of Sportsplex site. West Covina Sportsplex (Dog Park) S100,000 West Covina RPA Development of a dog park on vacant parcels on Sportsplex site. West Covina Sportsplex (hockey/ice rink) $5,500,000 West Covina RPA Development of a ice rink on 880 pad of Sportsplex site. May include site development, land and potential for financial assistance. West Covina Sportsplex (Helipad) $2,000,000 West Covina RPA Development of a Helipad on surplus property for public safety helicopters. West Covina Sportsplex (Signage) $1,000,000 West Covina RPA Development' of a new signage for the entire Sportsplex site. North/VVest College Expansion $2,000,000 West Covina RPA Facade/building renovation of Northwest College. West Covina Mall Expansion 55,000,000 West Covina RPA Re-tenanting and developments) additional retail space at the Westfield Mall. Additional Development Opportunities (Pioneer School Site) $2,000,000 na Public infrastructure need to convert school properties to residential/commercial/industrial development Additional Development Opportunities (Vincent Adult Center) 52.000.000 West Covina RPA Public infrastructure needle convert school properties to residential/commercial/industrial development • • • • Administrative and Personnel Cost for development and Administrative, personnel, supplies and service cost for administering monitoring. $57,800,000 Entire City redevelopment/economic development projects and related infrastructure improvements. • CI ITI IRF Hni lslrJrn onn mr-rc awn oariniztamq • Projects Project Cost Project Area Description Home Improvement Loan Program $17,000,000 Entire City Continuation of Home Improvement Loan Program Housing Preservation Program $1,020,000 Entire City Continuation of Housing Preservation Loan Program for moderate/income family. Affordable Housing Projects $50,000,000 Entire City Development of future affordable housing projects. • Administrative and Personnel Cost for development and monitoring. $57,800,000 *Entire City Administrative, personnel, supplies and service cost for administering housing projects and related infrastructure improvements. Total $460,840,000 ATTACHMENT NO. 2 RESOLUTION NO. A RESOLUTION OF THE CITY OF WEST COVINA • APPROVING AND AUTHORIZING THE EXECUTION OF A COOPERATION AGREEMENT WITH THE CITY OF WEST COVINA AND MAKING CERTAIN FINDINGS IN CONNECTION WITH THE PROVISION OF PUBLIC IMPROVEMENTS, THE IMPLEMENTATION OF CERTAIN HOUSING AND OTHER ACTIVITIES AND AUTHORIZING SUCH IMPROVEMENTS IN CONNECTION THEREWITH WHEREAS, the Community Development Commission of the City of West Covina ("Commission") is a duly constituted community development commission and is undertaking activities necessary for redevelopment under the provisions of the California Community Redevelopment Law (Health & Safety Code Sections 33000 et seq.) and pursuant to the Redevelopment Plan (the "Plan") for the City Wide Redevelopment Project Area ("City Wide Project Area") and the West Covina Redevelopment Project Area ("West Covina Project Area") (collectively referred to as the "Project Areas"); WHEREAS, it is a policy of the Commission to improve and provide public improvements which are of benefit to each of the Redevelopment Projects and one or more of the Project Areas; and WHEREAS, the City Council of the City of West Covina ("City") and the governing board of the Commission has determined that the public health and safety will be promoted by the provision of those certain public improvements, housing implementation activities and other activities described in Exhibit "1" hereto ("Projects"); and WHEREAS, the Projects are located in and would be of benefit to each of the Project Areas (and, in the case that a Designated Improvement and Project is of benefit to fewer than all of the Project Areas, the benefited Project Area will be set forth within Exhibit 1); and WHEREAS, the provision of public improvements as provided hereunder is consistent with the redevelopment plan as adopted for the Redevelopment Projects and the current implementation plan; , WHEREAS, the Commission intends to fund those public improvements listed Exhibit 1; and WHEREAS, the Commission has investigated alternative sources of public funds other than tax increment revenues and has concluded that there are no other reasonable funding sources available to contribute to the cost of the Projects in view of the limitations of other available funding and the continuing economic recession; and 'WHEREAS, pursuant to Section 33220 of the California Health & Safety Code, certain public bodies including the City may aid and cooperate in the planning, undertaking, construction, or operation of redevelopment projects; and WHEREAS, the City. and Commission have proposed to and desire to enter into a cooperation agreement to finance and delegate duties and obligations to complete the Projects ("Cooperation Agreement"), in the form submitted herewith; and WHEREAS, without amending, limiting, or modifying any prior agreements between the City and Commission ("Prior Agreements") and the ongoing effectiveness of such Prior Agreements, which shall remain in effect according to their terms for the maximum time legally allowed, the Commission and the City desire to approve the Cooperation Agreement; and WHEREAS, in consideration of the Commission's desire to ensure timely implementation and completion of the Projects, the Commission wishes to enter into the Cooperation Agreement and pledge net available tax increment to finance the Projects. The purpose of the Cooperation Agreement is to facilitate the implementation of the Projects and to provide funding necessary to effectuate the completion of the Projects with net available tax SECTION 1. The City Council hereby finds and determines that the forgoing recitals are true and correct and incorporate them herein as part of the findings. increment in this fiscal year and forthcoming fiscal years; and 'WHEREAS, the obligations of the Commission under the Cooperation Agreement shall constitute an indebtedness of the Commission to the City for the purpose of carrying out the Redevelopment Plans for the Project Areas; and WHEREAS, the Commission has the general purpose of redevelopment and the elimination of blight and the provision of public facilities as set forth in the Plan; and WHEREAS, pursuant to Health & Safety Code Section 3445 ., the Commission is authorized, as provided in its redevelopment plan, to assist in the payment for all or part of the value of land and installation and construction of public improvements within the Project Areas; and WHEREAS, Sections 33421.1 and 33445 of -the Health & Safety Code provide that the Commission and the City shall make certain findings before redevelopment moneys may be used to pay for such improvements; and WHEREAS, pursuant to Section 33421.1 of the Health & Safety Code, the Commission may, with the consent of the legislative body, may use its authority develop a site for industrial or commercial use so as to provide streets, sidewalks, utilities, or other improvements which an owner or operator of the site would otherwise be obligated to provide provided that the Commission finds that such improvements are necessary to effectuate the purpose of the redevelopment plan; and WHEREAS, Section 33445 of the Health & Safety Code provides in part that notwithstanding Section 33440, an agency may, with the consent of the legislative body, pay all or part of the value of the land for the cost of the installation and construction of any building, facility, structure, or other improvement which is publicly owned either within or without the project area, if the legislative body makes sufficient findings as required thereunder; WHEREAS, the Commission desires to proceed to support the construction and provision of the Projects by bearing the costs thereto; and WHEREAS, the Commission has previously established a low-and moderate-income housing fund pursuant to Sections 33334.2 and 33334.3 of the California Health & Safety Code ("Housing Fund") and is implementing affordable housing activities thereunder; and WHEREAS, the Commission and the City have explored all possible funding sources for the Projects, including federal, state, and local sources, and the efforts of private property owners and developers; and WHEREAS, the City has sought to obtain from private property owners and developers resources to provide for provision of the Projects; and WHEREAS, there are no other reasonable means available to the Commission and the City to fmance the Projects other than with the Commission funds; and WHEREAS, the Commission has reviewed evidence, including both oral testimony and writings, in connection with this matter, and has determined that the foregoing recitals, and each of them, are true and correct, and further has determined that the provision of Projects is in the best interest of the Commission and 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 law requirements. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of West Covina as follows: SECTION 2. With respect to the value of the land for and the cost of the installation and construction of any public building, facility, structure or other improvement which is publicly owned within or without the Project Areas as set forth in the Projects, the City Council hereby finds and determines the following: a) That the Projects withii or without the Project Areas are of benefit to the Project Areas and/or the 'immediate :neighborhood in which the Project Areas are located, regardless of whether the Designated Improvements or Projects are within the Project Areas and/or is of benefit to the adjacent Project Areas; b) That no other reasonable means of financing the acquisition of land or installation or construction of the buildings, facilities, structures, or other improvements that are publicly owned, are available to the community; c) That any payments for the acquisition of property and the cost of any buildings, facilities, structures, or other improvements set forth in the Projects is provided for in the Redevelopment Plan will assist in the elimination of one or more blighting conditions inside the Project Areas and/or will provide housing for low- or moderate-income persons and is consistent with the implementation plan adopted pursuant to Section 33490. SECTION 3. The 'City Council further finds and determines that the provision of the Projects will assist in the eliminating or alleviating one or more blighting conditions and is necessary to effectuate the Redevelopment Plans for the reasons set forth in the staff report, and additionally because of the following: a) The• funding of the Projects provide important public improvements during a period of national and regional recession which will enhance commercial efforts within the Project , Areas by removing infrastructure deficiencies as an impediment to providing improvements and by enhancing the attractiveness, competitiveness and utility of the immediately adjacent areas; and. 17) The City's capital improvement budget Will 'not support the development of the Projects and such.improvernents would not be otherwise undertaken but for the financial support of the Commission, and Iniplementing improvements as set forth in the current implementation plan. SECTION 4. The fimding of those the Projects which develop a site for industrial or commercial use so as to provide streets, sidewalks, utilities, or other improvements which an owner or, operator of the site.would otherwise be obligated to provide, the City Council finds and determines that the provision of such improvements is necessary to effectuate the purpose of the redevelopment plans as adopted for the Project Areas. SECTION 5. With respect to those activities and projects designated in Exhibit 1 which implement the provision, improvement of and/or preservation of affordable housing within and not within the Project Areas, the City Council finds and determines that such activities and projects are a benefit to the 'Project Areas and are in furtherance of the Commission's efforts to implement the provisions of Health and Safety Sections 33334.2, 33334.3 and 33413 as well as the adopted implementation plan and the respective redevelopment plans as adopted for the respective Project Areas. SECTION 6. The City Council approves and authorizes and directs the City Manager to execute ' on behalf of the City the Cooperation Agreement in substantially the same form presented. The City Council further authorizes and directs staff to undertake such actions and execute such documents that may be reasonably necessary or convenient to the carrying out the administration of the aCtions authorized by this Resolution, including but not limited to any promissory note, deed of- trust,. or other security instrument necessary to secure the Commission's payment under the Cooperation Agreement or any outstanding City loans to the Commission. SECTION 7. In the event of the conclusion of the Commission's statutory authority, the duty to perform the City's obligations wader the Cooperation Agreement may be performed by (i) the Community Development Commission's Director, with support from Commission's management team and *staff (as defined below) who shall report to the City Manager; or alternatively, (ii) performed, by a non-profit organization or development corporation (or other entity) approved by the City Council and managed by the Community Development Commission's Executive Director, with support from the Commission's management team and staff, which includes the Community Development Director, Assistant Director, Redevelopment Manager, Project Manager, Management Analyst II, Senior Administrative Assistant, Administrative Assistant I, Project Coordinator, Housing- Coordinator, and Interns. SECTION 8. In. the event that the Commission desires to issue bonds, notes or other instruments of indebtedness of the Commission to carry out redevelopment projects, then any indebtedness of the Commission to the City, including any interest accrued thereon, shall be deemed not to be a first pledge of tax increment allocations received by the Commission pursuant to Section 33670 of California Health & Safety Code; and any indebtedness of the Commission to the City, including any interest accrued thereon, shall be subordinate to any pledge of tax increments to bondholders or the holders of other such instruments of indebtedness. SECTION 9. The City Clerk shall certify to the passage , and adoption of this Resolution and the same shall thereupon take effect and be in force immediately upon its adoption. PASSED AND ADOPTED this 15th day of February 2011. ATTEST: City Cleric APPROVED AS TO FORM: COOPERATION AGREEMENT FOR PAYMENT OF COSTS ASSOCIATED WITH CERTAIN RDA FUNDED CAPITAL IMPROVEMENT AND AFFORDABLE HOUSING PROJECTS THIS COOPERATION AGREEMENT (the "Agreement") is entered into this day of February 2011, by and between the CITY OF WEST COVINA (the "City") and the WEST COVINA. COMMUNITY DEVELOPMENT COMMISSION (the "Commission"), with reference to the following facts: A. The Commission has prepared Redevelopment Plans for the City Wide Redevelopment Project Area ("City Wide Project Area") and the West Covina Redevelopment Project Area ("West Covina Project Area") (collectively the "Project Areas"), which results in the allocation of taxes from the Project Areas to the Commission for purposes of redevelopment. B. The intent of the Redevelopment Plans is, in part, (i) provide for the construction and installation of necessary public infrastructure and facilities and to facilitate the repair, restoration, and/or replacement of existing public facilities; (ii) promote specific actions necessary to promote the redevelopment and the economic revitalization of the Project Areas, (iii) preserve and create new jobs within the Project Areas; (iv) increase, improve and preserve the community's supply of low and moderate income housing, some of which may be located or implemented outside the Redevelopment' Project Areas; and (v) as to all of the afore-mentioned redevelopment projects, to implement the redevelopment plans for the respective redevelopment projects and to expend tax increment to accomplish the goals and objectives of the respective redevelopment projects. C. The Commission has adopted its Five-Year Implementation Plans for the Project Areas (the "Plans") with established goals to support affordable housing, economic development, community revitalization, and institutional revitalization. To implement the programs and activities associated with each goal, the Commission has made redevelopment fund commitments based on estimated available tax increment revenue and debt financing structures. • D. Pursuant to California Redevelopment law, section 33220(e), certain public bodies, including the City, may aid and cooperate in the planning, undertaking, construction, or operation of redevelopment projects. Collectively, the projects associated with this Agreement are listed in the attached adopted resolutions, Exhibit 1, which is incorporated herein by this reference (the "Projects"). The programs and activities associated with the Projects include acquisition, development of design criteria, design, planning, preparation of construction bid documents, financial analysis, new construction or rehabilitation. To carry out the Projects in accordance with the objectives and purposes of the Redevelopment Plans for the Project Areas and the Plans, the Commission desires assistance and cooperation in the implementation and completion of the Projects. The City agrees to aid the Commission and cooperate with the Commission to expeditiously implement the Projects in accordance with the redevelopment plans for the Project Areas Page 1 and the Plans and undertake and complete all actions necessary or appropriate to ensure that the objectives of the redevelopment plans for the Project Areas and the Plans are fulfilled within the time effectiveness of the Project Areas. E. In considering the Commission's desire to ensure timely implementation and completion of the Projects, the Commission wishes to enter into this Agreement with the City for the pledge of net available tax increment to finance the Projects. The purpose of this Agreement is to facilitate the implementation of the Projects and to provide funding necessary to effectuate the completion of the Projects with net available tax increment in this current fiscal year and forthcoming fiscal years until the expiration of the Project Areas, and until the last date for receipt of tax increments by the Commission for each of the respective redevelopment projects areas. F. Net available tax increment is defined as any available tax increment and income thereon, net of statutory pass-through payments, set-asides for affordable housing, debt service payments, and existing contractual obligations. The pledge of net available tax increment will constitute legal obligations to make payments authorized and incurred pursuant to Section 33445. The obligations set forth in this Agreement will be contractual obligations that, if breached, will subject the parties to this Agreement to damages and other liabilities or remedies. G. The City Council (the "Council") and the Commission by resolution have each found that the use of Commission redevelopment funding for the Projects is in accordance with Section 33445 of the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.) ("CRL") and other applicable law. The said Council and Council resolutions are each based on the authority of the Commission, with the consent of the Council, to pay all or part of the cost of the installation and construction of any building, facility, structure, or other improvements which is publicly owned either within or outside a project area. H. By approving and entering into this Agreement, the Commission has approved the pledge of net available tax increment from the Project Areas to pay for the Projects. I. The obligations of the Commission under this Agreement shall constitute an indebtedness of the Commission for the purpose of carrying out the Redevelopment Plan for the Project Areas. NOW, THEREFORE, the parties hereto do mutually agree as follows: 1. INTRODUCTORY PROVISIONS The recitals above are an integral part of this 'Agreement and set forth the intentions of the parties and the premises on which the parties have decided to enter intO this Agreement. - Page 2 COMMISSION'S OBLIGATIONS A. The Projects are those projects which are listed on the attached Exhibit 1, which is incorporated herein by this reference. The Commission agrees to pay the City an amount equal to the cost to the City to carry out the Projects to completion, including without limitation all costs incurred by the City for the planning, financing, development, permitting, design, site .testing, site remediation, bidding, construction and construction management of the Projects. The Commission's obligations under this Agreement include without limitation, the Commission's obligation to make the payments to the City required by- this Agreement, shall constitute an indebtedness of the Commission for the purpose of carrying out the redevelopment of the Project Areas and are obligations to make payments authorized and incurred pursuant to Section 33445 and other applicable statutes. The obligations of the Commission set forth in this Agreement are contractual obligations that, if breached, will subject the Commission to damages and other liabilities or remedies. B. The obligations of Commission under this Agreement shall be payable out of net available tax increments, as defined in the above recitals, levied by or for the benefit of taxing agencies in the Redevelopment Project Areas, and allocated to the Commission pursuant to Section 33670 et seq., of the California Community Redevelopment Law. Tax increment shall mean and include tax increment as defined or provided for in any applicable constitutional provision, statute or other provision of law now existing or adopted in the future, and allocated to (i) the Commission and/or (ii) any lawful successor entity of the Commission and/or (iii) any entity established by law to carry out any of the redevelopment plans for the Commission project areas and/or (iv) any entity established by law to expend tax increment and/or (v) any entity established by law to pay indebtedness of the Commission to be repaid in whole or in part with tax increment, pursuant to Section 33670 et seq. of the California Health & Safety or any applicable constitutional provision, statute or other provision of law now existing or adopted in the future. C. The indebtedness of Commission under this Agreement shall be subordinate to the rights of the holder or holders of any existing or future bonds, notes or other instruments of indebtedness (all referred to herein as "Indebtedness") of Commission incurred or issued to finance the Redevelopment Project Areas, including without limitation any pledge of tax increment revenues from the Redevelopment Project Areas to pay any portion of the principal (and otherwise comply with the obligations and covenants) of any bond or bonds issued or sold by Commission with respect to the Redevelopment Project Areas. D. Payments to be made by the Commission to the City under the Cooperation Agreement shall be made by the Commission as they are incurred by the City or as demanded by the City when necessary to perform its obligations and duties hereunder. City shall provide Commission with a quarterly report accompanied by evidence reasonably satisfactory to the Commission's Executive Director that the City has progressed in the development and construction of the Project or Projects for which Page 3 payment is made by the Commission commensurate with such payments and has incurred costs or obligations to make payments equal to or greater than such amount. CITY'S OBLIGATIONS A. The City shall accept any funds offered by the Commission pursuant to this Agreement and shall devote those funds to completion of the Projects by (i) reimbursing the City or using such funds to make City expenditures to perform the work required to carry out and complete the Projects; (ii) utilize such funds to pay debt service on bonds or other indebtedness or obligations that the City has or will incur for such purposes; and/or (iii) paying such funds into a special fund of the City to be held and expended only for the purposes of satisfying the obligations of the City hereunder. B. It is the responsibility of City to pay all development and construction costs in connection with the Projects from funds paid to the City by the Commission under this Agreement. C. The City shall perform its obligations hereunder in accordance with the applicable provisions of federal, state and local laws, including the obligation to comply with environmental laws such as CEQA. D. The City's performance of its obligations and duties under this Agreement shall be performed by the Community Development Commission Director, with support from the Community Development Commission's management team and staff who shall report to the City Manager. Commission management team and staff shall mean the Assistant Director, Redevelopment Manager, Project Manager, Management Analyst II, Senior Administrative Assistant, Administrative Assistant I, Project Coordinator, Housing Coordinator, and Interns, or such City department or entity as designated by the City Manager. 4. LIABILITY AND INDEMNIFICATION In contemplation of the provisions of California Government Code Section 895.2 imposing certain tort liability jointly upon public entities solely by reason of such entities being parties to an agreement as defmed by Government Code Section 895, the parties hereto, as between themselves, pursuant to the authorization contained in Government Code Sections 895.4 and 895.6, shall each assume the full liability imposed upon it, or any of its officers, agents or employees, by law for injury 'caused by negligent or wrongful acts or omissions occurring in the performance of this Agreement to the same extent that such liability would be imposed in the absence of Government Code Section 895.2. To achieve the above-stated purpose, each party indemnifies, defends and holds harmless the other party for any liability, losses, cost or expenses that may be incurred by such other party solely by reason of Government Code Section 895.2. 5. ENTIRE AGREEMENT: WAIVERS AND AMENDMENTS A. This Agreement shall be executed in triplicate originals, each of which is deemed to be an original. B. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or• previous agreements between the parties with respect to the subject matter of this Agreement. C. This Agreement is intended solely for the benefit of the City and the Commission. Notwithstanding any reference in this Agreement to persons or entities other than the City and the Commission, there shall be no third party beneficiaries under this Agreement. D. All waivers of the provisions of this Agreement, and all amendments to this Agreement must be in writing and signed by the authorized representatives of the parties. 6.. SEVERABILITY If any teini, provisions, 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 such invalidation, voiding or unenforceability. 7. DEFAULT • If either party fails to perform or adequately perform an obligation required by this Agreement within thirty (30) calendar days of receiving written notice from the non- defaulting party, the party failing to perform shall be in default hereunder. In the event of default, the non-defaulting party will have all the rights and remedies available to it at law or in equity to enforce the provisions of this contract, including without limitation the right to sue for damages for breach of contract. The rights and remedies of the non- defaulting party enumerated in this paragraph are cumulative and shall not limit the non- defaulting party's rights under any either provision of this Agreement, or otherwise waive or deny any right or remedy, at law or in equity, existing as of the date of. The Agreement or hereinafter enacted or established, that may be available to the non- defaulting party against the defaulting party. All notices of defaults shall clearly indicate a notice of default under this Agreement. 8. BINDING ON SUCCESSORS This Agreement shall be binding on and shall inure to the benefit of all successors and assigns of the parties;whether by agreement or operation of law. [Signatures on the following page] Andrew Pasmant, City Manager THE WEST COVINA COMMUNITY DEVELOPMENT COMMISSION (the "Commission") Andrew Pasmant, Executive Director ATTESTED: City Clerk/Commission Secretary APPROVED AS TO FORM: City Attorney/Commission Counsel Page 6 EXHIBIT I C DEVELOPMENT PROJECTS • Projects Project Cost Project Area Description Amar/Azusa (Island Plaza shopping Center) $1,000,000 Citywide RPA Re-tenanting of vacancies at shopping center located on southeast corner of Amar/Azusa. Auto Dealership Retention and Expansion . $20,000,000 West Covina RPA Renovation and development of new dealerships on Auto Row. Auto Center Sign S1,500,000 West Covina RPA Replacement of existing Auto Center Sign. Azusa/Aroma (South Hills Plaza) $1,500,000 Citywide RPA Facade/building/site improvement and re-tenanting at South Hills Plaza. Citrus/Workman (Citrus Grove) $1,500,000 West Covina EPA Facade/building/site improvement and tenanting assistance at Citrus Grove. Civic Center Development $5,000,000 West Covina RPA Development of a 'commercial project on City-owned civic center property. Civic Center (County Library Parking) . $1,000.000 West Covina EPA Relocation of library parking from City property to Los Angeles County property. Country Club Center (McIntyre Square) $2,000,000 West Covina EPA Facade/building/site improvement and tenant assistance of blighted shopping center. Eastland Shopping Center . $2,000,000 West Covina RPA Facade/building/site improvement and re-tenanting at Eastland Shopping Center. Economic Development and Job Creation $9,420,000 Entire City. Promotion and marketing of West Covina to attract businesses and jobs. Former Crazyhorse $1,000,000 West Covina RPA Re-tenanting of Former Crazyhorse site. Glendora Downtown (mixed used development) $40.000,000 West Covina RPA Redevelopment of downtown for a potential mix-used development along Glendora Avenue. Glendora Downtown branding program $500,000 West Covina RPA Development of a comprehensive branding and signage program for downtown area. Glendora Downtown (Lakes Entertainment Center) $2,500,000 West Covina RPA Re-tenanting of vacancies at the Lakes Entertainment Center. Glendora Downtown (Edwards Theater) $5,000,000 West Covina RPA Facade improvement and remodeling of the theater. Glendora Downtown (Former VVickes site) $20,000,000 West Covina EPA Redevelopment Of former Wickes site fore mixed use (housing and commercial) development Image Enhancement $2,000,000 Entire City Improve image of project areas through banner programs, theme signage. and marketing. K-Mart Site $20,000,000 West Covina RPA Redevelopment of K-Mart center. K-Mart Site (Credit Union property) $1,500,000 West Covina EPA' Redevelopment of vacant Credit Union property lore commercial use. Nogales/La Puente (Cluailridge Shopping Center) $2.000,000 Citywide RPA Re-tenanting of vacancies at shopping center located on Nogales/La Puente. Public Infrastructure $3,000,000 Entire City Streetscape design, pedestrian walkways and provide for general infrastructure and utility improvements. Public Infrastructure (Freeway enhancement) . $3,000,000 Entire City Landscaping and beautification of freeway entrances. Public Infrastructure (Azusa/Amar improvements) . $500,000 Citywide EPA Intersection improvements on Azusa/Amar Road. Public Infrastructure (Azusa Avenue Street Rehabilitation) $1,700,000 Entire City ' Street rehabilitation from Giambi Way to North City Limits. Public Infrastructure (Mass Transit Center) $2,000,000 West Covina RPA Development of a mass transit center in conjunction with Foothill Transit. Public Infrastructure (High Speed Rail Transit Station) $30,000,000 West Covina RPA Development of a high speed rail station and parking structure at the Westfield Mall. Public Infrastructure (Fire station) $10,000,000 Entire City ' Construction of a new fire station and related infrastructure improvements. Restaurant Row $2,000.000 West Covina RPA Facade, sign, and parking lot improvement of restaurant row. Shopping Center Renovation $10,000,000 Entire City , Facade improvements and marketing programs to promote struggling shopping centers. Strategic Development (West Covina Parkway Plaza) $1,000,000 West Covina RPA Re-tenanting of vacancies at shopping center located on West Covina Parkway Plaza. Strategic Development (Marketplace II) $5,000,000 West Covina RPA Re-tenanting of vacancies at shopping center located on Lakes Drive. West Covina Sportsplex (Golf Course) $45.000,000 West Covina RPA Development of a 18 hole golf course on the former BKK landfill. West Covina Sportsplex (waterline) $5.000,000 West Covina RPA Development of waterline system to support golf course and future development on remainder of Sportsplex site. West Covina Sportsplex (Dog Park) - $100,000 West Covina EPA Development of a dog park on vacant parcels on Sportsplex site. West Covina Sportsplex (hockey/ice rink) $5,500,000 West Covina RPA Development of a ice rink on 880 pad of Sportsplex site. May include site development, land and potential for financial assistance. West Covina Sportsplex (Helloed) $2,000,000 West Covina EPA Development of a Helipad on surplus property for public safety helicopters. West Covina Sportsplex (Signage) $1,000,000 West Covina EPA Development of anew signage for the entire Sportsplex site. North/West College Expansion $2,000,000 West Covina RPA Facade/building renovation of Northwest College. West Covina Mall Expansion $5,000,000 West Covina EPA Re-tenanting and development of additional retail space at the Westfield Mall. Additional Development Opportunities (Pioneer School Site) $2,000,000 na Public infrastructure need to convert school properties to residential/commercial/industrial development. Additional Development Opportunities (Vincent Adult Center) $2,000.000 West Covina RPA Public infrastructure need to convert school properties to residential/commercial/industrial development • • • • Administrative and Personnel Cost for development and Administrative, personnel, supplies and service cost for administering monitoring. $57.800,000 Entire City • redevelopmenUeconomic development projects and related infrastructure improvements. SI • m 113P uni 'Rutin port ipr-rc artin obni-zrxame Projects Project Cost Project Area Description Home Improvement Loan Program $17,000,000 Entire City Continuation of Home Improvement Loan Program Housing Preservation Program $1,020,000 Entire City Continuation of Housing Preservation Loan Program for moderate/income family. Affordable Housing Projects $50,000,000 Entire City Development of future affordable housing projects. Administrative and Personnel Cost for development and• monitoring. $57,800,000 Entire City Administrative, personnel, supplies and service cost for administering housing projects and related infrastructure improvements. Total $460,840,000 ATTACHMENT NO. RESOLUTION NO. A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF WEST COVINA APPROVING AND AUTHORIZING THE EXECUTION OF A COOPERATION AGREEMENT WITH THE CITY OF WEST COVINA AND MAKING CERTAIN FINDINGS IN CONNECTION WITH THE PROVISION OF PUBLIC IMPROVEMENTS, THE IMPLEMENTATION OF CERTAIN HOUSING AND OTHER ACTIVITIES AND AUTHORIZING SUCH IMPROVEMENTS IN CONNECTION THEREWITH • WHEREAS, the Community Development Commission of the City of West Covina ("Commission") is a duly constituted community development commission and is undertaking activities necessary for redevelopment under the provisions of the California Community Redevelopment Law (Health & Safety Code Sections 33000 et seq.) and pursuant to the Redevelopment Plan (the "Plan") for the City Wide Redevelopment Project Area ("City Wide Project Area") and the West . Covina. Redevelopment Project Area ("West Covina Project Area") (collectively referred to as the "Project Areas"); WHEREAS, it is a policy of the Commission to improve and provide public improvements which are of benefit to each of the Redevelopment Projects and one or more of the Project Areas; and WHEREAS, the City Council of the City of West Covina and the governing board of the Commission has determined that the public health and safety will be promoted by the provision of those certain public improvements, housing implementation activities and other activities described in Exhibit "1" hereto (the "Projects"); and WHEREAS, the Projects are located in and would be of benefit to each of the Project Areas (and, in the case that a Designated Improvement and Project is of benefit to fewer than all of the Project Areas, the benefited Project Area will be set forth within Exhibit 1); and . WHEREAS, the provision of public improvements as provided hereunder is consistent with the redevelopment plan. as', adopted for the Redevelopment Projects and the current implementation plan, WHEREAS, the Commission intends to fund those public improvements listed in Exhibit 1; and WHEREAS, the Coirmiission has investigated alternative sources of public funds other than tax increment revenues and has concluded that there are no other reasonable funding sources available to contribute to the cost of the Projects in view of the limitations of other available funding and the continuing economic recession; and WHEREAS, pursuant to Section 33220 of the California Health & Safety Code, certain public bodies including the City may aid and cooperate in the planning, undertaking, construction, or operation of redevelopment projects; and WHEREAS, the City and Commission have proposed .to and desire to enter into a cooperation agreement to finance and delegate duties and obligations to complete the Projects ("Cooperation Agreement"), in the form submitted herewith; and WHEREAS, without amending, limiting, or modifying any prior agreements between the City and Commission ("Prior Agreements") and the ongoing effectiveness of such Prior Agreements, which shall remain in effect according to their terms for the maximum time legally allowed, the Commission and the City desire to approve the Cooperation Agreement; and WHEREAS, in consideration of the Commission's desire to ensure timely implementation and completion of the Projects, the Commission wishes to enter into the Cooperation Agreement and pledge net available tax increment to the City to finance the Projects. The purpose of the Cooperation Agreement is to facilitate the implementation of the Projects and to provide funding necessary to effectuate the completion• of the Projects with net available tax increment in this fiscal year and forthcoming fiscal years; and WHEREAS, the obligations of the Commission under the Cooperation Agreement shall constitute an indebtedness of the Commission for the purpose of carrying out the Redevelopment Plans for the Project Areas; and WHEREAS, the Commission has the general purpose of redevelopment and the elimination of blight and the provision of public facilities as set forth in the Plan; and WHEREAS, pursuant to Health & Safety Code Section 33445, the Commission is authorized, as provided in its redevelopment plan, to assist in the payment for all or part of the value of land and installation and construction of public improvements within the Project Areas; and WHEREAS, Sections 33421.1 and 33445 of the Health & Safety Code provide the Commission and the City to make certain findings before redevelopment moneys may be used to pay for such improvements; and WHEREAS, pursuant to Section 33421.1 of the Health & Safety Code, the Commission may, with the consent of the legislative body, may use its authority to develop a site for industrial or commercial use so as to provide streets, sidewalks, utilities, or other improvements which an owner or operator of the site would otherwise be obligated to provide provided that the Commission finds that such improvements are necessary to effectuate the purpose of the redevelopment plan; and WHEREAS, Section 33445 of the Health & Safety Code provides in part that notwithstanding Section 33440, an agency may, with the consent of the legislative body, pay all or part of the value of the land for the cost of the installation and construction of any building, facility, structure, or other improvement which is publicly owned either within or without the project area, if the legislative body makes sufficient findings are required thereunder; WHEREAS, the Commission desires to proceed to support the construction and provision of the Projects by bearing the costs thereto; and WHEREAS, the Commission has previously established a low-and moderate-income housing fund pursuant to Sections 33334.2 and 33334.3 of the California Health & Safety Code ("Housing Fund") and is implementing affordable housing activities thereunder; and WHEREAS, the Commission and the City have explored all possible funding sources for the Projects, including federal, state, and local sources, and the efforts of private property owners and developers; and • WHEREAS, the City has sought to obtain from private property owners and developers resources to provide for provision of the Projects; and WHEREAS, there are no other reasonable means available to the Commission and the City to finance the Projects other than with the Commission funds; and WHEREAS, the Commission has reviewed evidence, including both oral testimony and writings, in connection with this matter, and has determined that the foregoing recitals, and each of them, are true and correct, and further has determined that the provision of Projects is in the best interest of the Commission and 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 law requirements. NOW, THEREFORE, BE IT RESOLVED by the Community Development Commission of the City of West Covina as follows: SECTION 1. The Commission hereby finds and determines that the forgoing recitals are true and correct and incorporate them herein as part of the findings. SECTION 2. With respect to the value of the land for and the cost of the installation and construction of any public building, facility, structure or other improvement which is publicly owned within or without the Project Areas as set forth in the Projects, the Commission • hereby finds and determines the following: a) That the Projects within or without the Project Areas are of benefit to the Project Areas and/or the immediate neighborhood in which the Project Areas are located, regardless of whether the Designated Improvements or Projects are within the Project Areas and/or is of benefit to the adjacent Project.Areas; b) That no -other reasonable means of financing the acquisition of land or installation or construction of the buildings, facilities, structures, or other improvements that are publicly owned, are available to the community; c) That any payments for the acquisition of property and the cost of any buildings, facilities, structures, or other improvements set forth in the Projects is provided for in the Redevelopment Plan will assist in the elimination of one or more blighting conditions inside the Project Areas and/or will provide housing for low- or moderate-income persons and is consistent with the implementation plan adopted pursuant to Section 33490. SECTION 3. The Commission further finds and determines that the provision of the Projects will assist in the eliminating or alleviating one or more blighting conditions and is necessary to effectuate the Redevelopment Plans for the reasons set forth in the staff report, and additionally because of the following: a) The :funding of the Projects provide important public improvements during a period of national and regional recession which will enhance commercial efforts within the Project Areas by removing infrastructure deficiencies as an impediment to providing improvements and by enhancing the attractiveness, competitiveness and utility of the immediately adjacent areas; and b) The City's capital improvement budget will not support the development of the Projects and such improvements would not be otherwise undertaken but for the financial support of the Commission; and c) Implementing improvements as set forth in the current implementation plan. SECTION 4. The funding of those the Projects which develop a site for industrial or commercial use so as to provide streets, sidewalks, utilities, or other improvements which an owner or operator of the site would otherwise be obligated to provide, the Commission finds and determines that the provision of such improvements is necessary to effectuate the purpose of the redevelopment plans as adopted for the Project Areas. SECTION 5. With respect to those activities and projects designated in Exhibit 1, which implement the provision, improvement of and/or preservation of affordable housing within and not within the Project Areas, the Commission finds and determines that such activities and projects are a benefit to the Project Areas and are in furtherance of the Commission's efforts to implement the provisions of Health and Safety Sections 33334.2, 33334.3 and 33413 as well as the adopted implementation plan and the respective redevelopment plans as adopted for the respective Project Areas. SECTION 6. The Commission approves and authorizes and directs the Executive Director to execute on behalf of the Commission the Cooperation Agreement in substantially the same form presented to the Commission. The Commission further authorizes and directs staff to undertake such actions and execute such documents that may be reasonably necessary or convenient to carrying out the administration of the actions authorized by this Resolution. SECTION 7. The Commission authorizes the Executive Director or designee to increase the amount available under the Cooperative Agreement by five percent (5%) or up to $460,840,000 to ensure the appropriate funding for the development of the Projects. . . SECTION 8. In the event of the conclusion of the Commission's statutory authority, the duty to perform the City's obligations under the Cooperation Agreement may be performed by (i) the Community Development Commission's Director, with support from Commission's management team and staff (as defined below) who shall report to the City Manager; or alternatively, (ii) performed by a non-profit organization or development corporation (or other entity) approved by the City Council and managed by the Community Development Commission's ATTEST: Commission Secretary APPROVED AS TO FORM: Executive Director, with support from the Commission's management team and staff, which includes the Community Development Director, Assistant Director, Redevelopment Manager, Project Manager, Management Analyst II, Senior Administrative Assistant, Administrative Assistant I, Project Coordinator, Housing Coordinator, and Interns. SECTION 9. In the event that the Commission desires to issue bonds, notes or other instruments of indebtedness of the Commission to carry out redevelopment projects, then any indebtedness of the Commission to the City, including any interest accrued thereon, shall be deemed not to be a first pledge of tax 'increment allocations received by the Commission pursuant to Section 33670 of California Health & Safety Code; and any indebtedness of the Commission to the City, including any interest accrued thereon, shall be subordinate to any pledge of tax increments to bondholders or the holders of other such instruments of indebtedness. SECTION 10. The Commission further authorizes the recordation of any necessary security instruments against Commission real property and personal property by the City as may be reasonably necessary to secure the payment by the Commission under the Cooperation Agreement or for any other outstanding City loans to the Commission. SECTION 11. The Commission Secretary shall certify to the passage and adoption of this Resolution and the same shall thereupon take effect and be in force immediately upon its adoption. PASSED AND ADOPTED this 15th day of February 201 Alvarez-Glasman & Colvin CDC General Counsel I HEREBY CERTIFY that the foregoing Resolution No. was duly adopted by the Community Development Commission a regularly scheduled meeting, held on the day of February 2011, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF WEST COVINA By: Commission Secretary COOPERATION AGREEMENT FOR PAYMENT OF COSTS ASSOCIATED WITH CERTAIN RDA FUNDED CAPITAL IMPROVEMENT AND AFFORDABLE HOUSING PROJECTS THIS COOPERATION AGREEMENT (the "Agreement") is entered into this day of February 2011, by and between : the CITY OF WEST COVINA (the "City") and the WEST COVINA COMMUNITY DEVELOPMENT COMMISSION (the "Commission"), with reference to the following facts: A. The Commission has prepared Redevelopment Plans for the City Wide Redevelopment Project . Area ("City Wide Project Area") and the West Covina Redevelopment Project Area ("West Covina Project Area") (collectively the "Project Areas"), which results in the allocation of taxes from the 'Project Areas to the Commission for purposes of redevelopment. B. The intent of the Redevelopment Plans is, in part, (i) provide for the construction and installation of necessary public infrastructure and facilities and to facilitate the repair, restoration, and/or replacement of existing public facilities; (ii) promote specific actions necessary to promote the redevelopment and the economic revitalization of the Project Areas, (iii) preserve and create new jobs within the Project Areas; (iv) increase, improve and preserve the community's supply of low and moderate income housing, some of which may be located or implemented outside the Redevelopment' Project Areas; and (v) as to all of the afore-mentioned redevelopment projects, to implement the redevelopment plans for the respective redevelopment projects and to expend tax increment to accomplish the goals and objectives of the respective redevelopment projects. C. The Commission has adopted its Five-Year Implementation Plans for the Project Areas (the "Plans") with established goals to support affordable housing, economic development, community revitalization, and institutional revitalization. To implement the programs and activities associated with each goal, the Commission has made redevelopment fund commitments based on estimated available tax increment revenue and debt financing structures. • D. Pursuant to. California Redevelopment law, section 33220(e), certain -public bodies, including the 'City, may aid and cooperate in the planning, . undertaking, construction, or operation of redevelopment projects. Collectively, the projects associated with this Agreement are listed in the attached adopted resolutions, Exhibit 1, .which is incorporated herein by ,this 'reference .(the "Projects"). The programs and activities associated. with the Projects include acquisition, development of design criteria, design, planning, preparation of construction bid documents, financial analysis, new construction or rehabilitation: To carry out the Projects in accordance with the objectives and Purposes -of the Redevelopment Plans for the Project Areas and the Plans, the Commission desires assistance and cooperation in the implementation and completion of the Projects. The City agrees to aid th6'ComMisSion 'and cooperate with the Commission to expeditiously implement the Projects in -accbrdance.with the redevelopment plans for the Project Areas Page] and the Plans and undertake and complete all actions necessary or appropriate to ensure that the objectives of the redevelopment plans for the Project Areas and the Plans are fulfilled within the time effectiveness of the Project Areas, E. In considering the Commission's desire to ensure timely implementation and completion of the Projects, the Commission wishes to enter into this Agreement with the City for the pledge of net available tax increment to finance the Projects. The purpose of this Agreement is to facilitate the implementation of the Projects and to provide funding necessary to effectuate the completion of the Projects with net available tax increment in this current fiscal year and forthcoming fiscal years until the expiration of the Project Areas, and until the last date for receipt of tax increments by the Commission for each of the respective redevelopment projects areas. F. Net available tax increment, is defined as any available tax increment and income thereon, net of statutory pass-through payments, set-asides for affordable housing, debt service payments, and existing contractual obligations. The pledge of net available tax increment will constitute legal obligations to make payments authorized and incurred pursuant to Section 33445. The obligations set forth in this Agreement will be contractual obligations that, if breached, will subject the parties to this Agreement to damages and other liabilities or remedies. G. The City Council (the "Council") and the Commission by resolution have each found that the use of Commission redevelopment funding for the Projects is in accordance with Section 33445 of the California Community Redevelopment Law (Health & Safety Code Section 33000 et seq.) ("CRL") and other applicable law. The said Council and Council resolutions are each based on the authority of the Commission, with the consent of the Council, to . pay all or part of the cost of the 'installation and construction of any building, facility, structure, or other inaixovernents which is publicly owned either within or outside a project area. H. By approving and entering into this Agreement, the Commission has approved the pledge of net available tax increment from 'the Project Areas to pay for the Projects. I. The obligations of the Commission under this Agreement shall constitute an indebtedness of the Commission for the purpose of carrying out the Redevelopment Plan for the Project Areas. NOW, THEREFORE, the parties hereto do mutually agree as follows: The recitals above are an integral part of this Agreement and set forth the intentions of the parties and the premises on which the parties have decided to enter into this Agreement. Page COMMISSION'S OBLIGATIONS A. The Projects are those projects which are listed on the attached Exhibit 1, which is incorporated herein by this reference. The Commission agrees to pay the City an amount equal to the cost to the City to carry out the Projects to completion, including without limitation all costs incurred by the City for the planning, financing, development, permitting, design, site testing, site remediation, bidding, construction and construction management of the Projects. The Commission's obligations under this Agreement include without limitation, the Commission's obligation to make the payments to the City required by this Agreement, shall constitute an indebtedness of the Commission for the purpose of carrying out the redevelopment of the Project Areas and are obligations to make payments authorized and incurred pursuant to Section 33445 and other applicable statutes. The obligations of the Commission set forth in this Agreement are contractual obligations that, if breached, will subject the Commission to damages and other liabilities or remedies. , B. The obligations of Commission under this Agreement shall be payable out of net available tax increments, as defined in the above recitals, levied by or for the benefit of taxing agencies, in the Redevelopment Project Areas, and allocated to the Commission pursuant to Section 33670 et seq., of the California Community Redevelopment Law. Tax increment shall mean and include tax increment as defined or provided for in any applicable constitutional provision, statute or other provision of law now existing or adopted in the future, and allocated to (i) the Commission and/or (ii) any lawful successor entity of the Commission and/or (iii) any entity established by law to carry out any of the redevelopment plans for the Commission project areas and/or (iv) any entity established by law to expend tax increment and/or (v) any entity established by law to pay indebtedness of the Commission to be repaid in whole or in part with tax increment, pursuant to Section 33670 et seq. of the California Health & Safety or any applicable constitutional provision, statute or other provision of law now existing or adopted in the future. • C. The indebtedness of Commission under this Agreement shall be subordinate to the rights of the holder or holders of any existing or future bonds, notes or other instruments - of indebtedness (all referred to herein as "Indebtedness") of Commission incurred or issued' to finance the Redevelopment Project Areas, including without limitation any .pledge of tax increment revenues from the Redevelopment Project Areas to pay any portion of the principal (and otherwise comply with the obligations and covenants) of any bond or bonds issued or sold by Commission with respect to the Redevelopment Project Areas. D. • Payments to be made by the Commission to the City under the Cooperation Agreement -shall be made by the Commission as they are incurred by the City or as demanded by :the, City .when necessary to perform. its obligations and duties hereunder. City shall provide Commission with a quarterly report accompanied by evidence reasonably satisfactory. to the Commission's Executive Director that the City has progressed in the development and construction of the Project or Projects for which payment is made by the Commission commensurate with such payments and has incurred costs or obligations to make payments equal to or greater than such amount. 3. CITY'S OBLIGATIONS A. The City shall accept any funds offered by the Commission pursuant to this Agreement and shall devote those funds to completion of the Projects by (i) reimbursing the City or using such funds to make City expenditures to perform the work required to carry out and complete the Projects; (ii) utilize such funds to pay debt service on bonds or other indebtedness or obligations that the City has or will incur for such purposes; and/or (iii) paying such funds into a special fund of the City to be held and expended only for the purposes of satisfying the obligations of the City hereunder. B. It is the responsibility of City to pay all development and construction costs in connection with the Projects from funds paid to the City,by the Commission under this Agreement. C. The City shall perform its obligations hereunder in accordance with the applicable provisions of federal, state and local laws, including the obligation to comply with environmental, laws such as CEQA. D. The City's perfaunance of its obligations and- duties under this Agreement shall be performed by the Community Development Commission Director, with support from the Community Development Commission's man.agenient team and staff who shall report to the City Manager.. Commission management team and staff shall mean the Assistant Director, Redevelopment Manager, Project Manager, Management Analyst II, Senior Administrative Assistant, Administrative Assistant I, • Project Coordinator, Housing Coordinator, and Interns, or such City department or entity as 'designated by the City Manager. • 4. LIABILITY AND INDEMNIFICATION . . . In contemplation of the provisions of California Government -Cede Section 895.2 imposing certain tort liability jointly upon public entities solely by reason of such entities being parties to an agreement as defined by Government Code Section . 895, the paities, hereto, as between themselves, pursuant to the authorization, contained in Government Code Sections 895.4 and 8956, .shall each assume the full liability imposed upon it, or any of its officers, agents or employees, by law for' injUry •cau§ed by negligent or wrongful acts or omissions occurring in the performance of this Agreement to the same extent that such liability would be' imposed in the absence of 'Government Code Section . 895.2. To achieve the above-stated purpose, each party indemnifies, defends and holds' harmless the other party for any liability, losses, cost or expenses that may be incurred by such other party solely by reason of Government Code Section 895.2. ENTIRE AGREEMENT: WAIVERS AND AMENDMENTS Page 4 A. This Agreement shall be executed in triplicate originals, each of which is deemed to be an original. B. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties with respect to the subject matter of this Agreement. C. This Agreement is intended solely for the benefit of the City and the Commission. Notwithstanding any reference in this Ageement to persons or entities other than the City and the Commission, there shall be no third party beneficiaries under this Agreement. D. All waivers of the provisions of this Agreement, and all amendments to this Agreement must be in writing and signed by the authorized representatives of the parties. 6. SEVERABILITY If any teim, provisions, 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 such invalidation, voiding or tmenforceability. 7. DEFAULT If either party fails to perform or adequately perfaan an obligation required by this Agreement within thirty (30) calendar days of receiving Written notice from the non- defaulting party, the party failing to perfoint shall be in default hereunder. In the event of default, the non-defaulting party will have all the rights an' d remedies' available to it at law or in equity to enforce, the provisions of this contract, including without limitation the right to sue for damages for breach of contract. The rights and remedies of the non- defaulting party enumerated in this paragraph are cumulative and shall not limit the non- defaulting party's rights under any either provision of this Agreement, or otherwise waive or deny. any right or :remedy, -4-t law or in .equity, existing as of the date of. The Agreement or hereinafter enacted or established, that may be available to the non- defaulting party against the defaulting party. All notices of defaults shall clearly indicate a notice of default under this Agreement. BINDING ON SUCCESSORS This Agreement shall be binding on and shall inure to the benefit of all successors and assigns of the parties, whether by agreement or operation of law. [Signatures on the following page] City Attorney/Commission Counsel Andrew Pasmant, City Manager THE WEST COVINA COMMUNITY DEVELOPMENT COMMISSION (the "Commission") Andrew Pasmant, Executive Director ATTESTED: City Clerk/Commission Secretary APPROVED AS TO FORM: EXHIBIT 1 C DEVELOPMENT PROJECTS Projects . Project Cost . Project Area Description Amar/Azusa (Island Plaza shopping Center) $1,000,000 Citywide RPA Re-tenanting of vacancies at shopping center located on southeast corner of Amar/Azusa. Auto Dealership Retention and Expansion $20,000,000 West Covina RPA Renovation and development of new dealerships on Auto Row. Auto Center Sign _. . .$1,500,000 West Covina RPA Replacement of existing Auto Center Sign. Azusa/Aroma (South Hills Plaza) $1,500,000 Citywide RPA Facade/building/site improvement and re-tenanting at South Hills Plaza. Citrus/Workman (Citrus Grove) $1,500,000 West Covina RPA Facade/building/site improvement and tenanting assistance at Citrus Grove. Civic Center Development • $5,000,000 West Covina RPA Development of a commercial project on City-owned civic center property. Civic Center (County Library Parking). $1,000,000 West Covina RPA Relocation of library parking from City property to Los Angeles County property. Country Club Center (McIntyre Square) $2,000,000 West Covina RPA Facade/building/site improvement and tenant assistance of blighted shopping center. Eastland Shopping Center $2,000,000 West Covina RPA Facade/building/site improvement and re-tenanting at Eastland Shopping Center. Economic Development and Job Creation $9,420,000 Entire City Promotion and marketing of West Covina to attract businesses and jobs. Former Crazyhorse $1,000,000 West Covina RPA Re-tenanting of Former Crazyhorse site. Glendora Downtown (mixed used development) $40,000.000 West Covina RPA Redevelopment of downtown for a potential mix-used development along Glendora Avenue. Glendora Downtown branding program $500,000 West Covina RPA Development of a comprehensive branding and signage program for downtown area. Glendora Downtown (Lakes Entertainment Center) $2,500,000 West Covina RPA Re-tenanting of vacancies at the Lakes Entertainment Center. Glendora Downtown (Edward's Theater) $5,000,000 West Covina RPA Facade improvement.and remodeling of the theater. Glendora Downtown (Former Wickes site) $20,000,000 West Covina RPA Redevelopment of former Wickes site fore mixed use (housing and commercial) development Image Enhancement . $2,000,000 Entire City Improve image of project areas through banner programs, theme signage, and marketing. K-Mart Site $20,000,000 West Covina RPA Redevelopment of K-Mart center. K-Mart Site (Credit Union property) $1,500,000 West Covina RPA Redevelopment of vacant Credit Union property for a commercial use. Nogales/La Puente (Quailridge Shopping Center) $2,000,000 Citywide RPA Re-tenanting of vacancies at shopping center located on Nogales/La Puente. Public Infrastructure $3,000,000 Entire City Streetscape design, pedestrian walkways and provide for general infrastructure and utility improvements. Public Infrastructure (Freeway enhancement) $3,000,000 Entire City Landscaping and beautification of freeway entrances. Public Infrastructure (Azusa/Amar improvements) $500,000 Citywide RPA Intersection improvements on Azusa/Amar Road. Public Infrastructure (Azusa Avenue Street Rehabilitation) ' $1,700,000 Entire City Street rehabilitation from Giambi Way to North City Limits. Public Infrastructure (Mass Transit Center) $2,000,000 West Covina EPA Development of a mass transit center in conjunction with Foothill Transit. Public Infrastructure (High Speed Rail Transit Station) $30,000,000 WesiCovina RPA Development of a high speed rail station and parking structure at the Westfield Mall. Public Infrastructure (Fire station) $10,000,000 Entire City Construction of a new fire station and related infrastructure improvements. Restaurant Row $2,000.000 West Covina RPA Facade, sign, and parking lot improvement of restaurant row. Shopping Center Renovation $10,000.000 Entire City Facade improvements and marketing programs to promote struggling shopping centers. Strategic Development (West Covina Parkway Plaza) $1,000,000 West Covina RPA Re-tenanting of vacancies at shopping center located on West Covina Parkway Plaza. Strategic Development (Marketplace II) $5,000,000 West Covina RPA Re-tenanting of vacancies at shopping center located on Lakes Drive. West Covina Sportsplex (Golf Course) $45,000,000 West Covina RPA Development of a 18 hole golf course on the former BKK landfill. West Covina Sportsplex (waterline) $5,000,000 West Covina RPA Development of waterline system to support golf course and future development on remainder of Sportsplex site. West Covina Sportsplex (Dog Park) $100,000 West Covina EPA Development of a dog park on vacant parcels on Sportsplex site. West Covina Sportsplex (hockey/ice rink) $5,500,000 West Covina RPA Development of a ice rink on 880 pad of Sportsplex site. May include site development, land and potential for financial assistance. West Covina Sportsplex (Helipad) $2,000,000 West Covina RPA Development of a Helipad on surplus property for public safety helicopters. West Covina Sportsplex (Signage) 51,000,000 West Covina EPA Development of a new signage for the entire Sportsplex site. North/West College Expansion $2,000,000 West Covina RPA Facade/building renovation of Northwest College. West Covina Mall Expansion $5.000,000 West Covina EPA Re-tenanting and development of additional retail space at the Westfield Mall. Additional Development Opportunities (Pioneer School Site) $2,000,000 no Public infrastructure need to convert school properties to residential/commercial/industrial development. Additional Development Opportunities (Vincent Adult Center) $2,000,000 West Covina RPA Public infrastructure need to convert school properties to residential/commercialfindustrial development. Administrative and Personnel Cost for development and Administrative, personnel, supplies and service mist for administering monitoring. $57,800,000 Entire City redevelopment/economic development projects and related infrastructure improvements. 10. Lan! [emu-. 017/1 nmn C1011r20 IN RAC Projects Project Cost Project Area Description Home Improvement Loan Program $17,000,000 Entire City Continuation of Home Improvement Loan Program Housing Preservation Program $1,020,000 Entire City Continuation of Housing Preservation Loan Program for moderate/income family. Affordable Housing Projects $50,000,000 Entire City Development of future affordable housing projects. Administrative and Personnel Cost for development and monitoring. $57,800,000 Entire City Administrative, personnel, supplies and service cost for administering housing projects and related infrastructure improvements. DISCUSSION: 2010-11 BUDGET — MID-YEAR UPDATE City of West Covina MEMORANDUM AGENDA Item No.: Date: February 15, 2011 TO: Andrew G. Pasmant, City Manager and City Council FROM: Tom Bachman, Assistant City Manager SUBJECT: 2010-11 FISCAL YEAR MID-YEAR BUDGET UPDATE RECOMMENDATION: It is recommended that the City Council receive and file this report.: General Fund The 2010-11 Adopted General Fund Budget includes $48.9 -million of estimated revenues and $52.7 million of appropriations, resulting in a $3.8 million deficit. .Revenues in 2010-11 - are projected to decrease by 1.5 percent below the 2009-10 -totals while- expenditures are projected to decrease by 1.6 percent. Since adoption of the budget, the City has identified an additional Prop A exchange that resulted in additional General Fund revenue of $270,000. This has reduced the 2010-11 gap to $3.56 million. There will also be a limited amount of operating carryovers from the 2009-10 fiscal year that will increase the gap to approximately $3.7 million. Through the first seven months, there are some deviations from budget in certain revenue sources, but in total, revenues are projected to be fairly close - to the $49.2 million adjusted budget estimate by year-end. Property tax and sales tax combine for almost 60 percent of the General Fund's revenues. Property tax revenues will decline - this year for the • second straight year 'after showing tremendous growth over the previous five years. That decline should not be as great as initially expected and property tax revenues are now projected to be down 2 percent this year after declining 4 percent in the 2009-10 fiscal year. Sales tax on the other hand- appears to have bottomed out and should show a modest increase this year. Recovery of consumer spending from the recession continues to be hampered by uncertainty hi the housing Market and continued high unemployment. The City's recovery is furthered hampered by Vacant Commercial buildings and dismal performance by certain auto dealerships. Property taxes should exceed their revenue estimate for the current year while sales taxes are projected to be less than the budget estimate. Most other revenues are performing at or near budget levels, albeit at reduced levels from . previous highs as nearly all revenues have been impacted by the recession. While most revenues have been impacted directly by the recession, another large General: Fund revenue has been indirectly impacted by the recession as the result of downsizing of City staff: The City Charges out its General Fund administrative functions via an overhead charge to other funds that receive external funding. As the City has reduced its City Hall Staff 'and .adniinistratiVe Costs, there ate lesser charges to be recouped from these other special funds. This has resulted .in a decrease of this revenue source from approximately $2 million per year 'down to $1.6 Million (20%). The one lone bright spot on the revenue side has been business licenses: that have continued to grow during the recession, increasing by 33% over the last three years due in large part to increased enforcement in targeted areas, especially wireless telephone providers. A more detailed discussien Of the top 10 General Fund revenues is -provided in Attachment -1 of this report. On the expenditure side, most departments are either at or below where they should -be . in terms of budget at this time of the year. The City will again realize signifidant savings' on its variable rate bond debt service payments due to continued historically 'lbw-interest rates -that have remained in the 0.25% - 0.50% range. This will allow the General Fund to again .reduce its transfer to the Debt Service during the current year . Animal Control Costs are running. significantly above budget due to increased number of calls for Service and animals requiring housing. This program will be above budget this year and staff is evaluating ways to reduce costs. The Fire Department budget for the current year included the elimination of one engine company and the transition of one ambulance from a staffing level of two firefighter/paramedics to two emergency medical technicians. The engine company was removed from service but the ambulance transition required agreement with the firefighters association to be implemented due to constant manning requirements in the MOU. Ultimately, agreement Was not achieved and the transition did not occur. This has caused the Fire - Department 'budget. to run ahead of budget through the first seven months of the fiscal .year. Four recent retirements should provide . some budget relief in the form of overtime savings and two other full time :positions are being held vacant in order to achieve savings in an effort to meet budgetary goals: The table below presents a summary of General Fund revenues . and expenditures through January 31, 2011. As of January 31, 2011, the General Fund had received only 51.0 percent of its estimated revenues compared to spending 56.3% of its appropriations and has spent $4.6 million more than it has received in revenues. While January is a big revenue month for the City, there are still a couple of large revenue sources such as 'franchise' fees and the sales . tax reimbursement agreement payment from the CDC that do not come in until later in the fiscal year Expenditures are very consistent throughout the Year, as the majority Of costs - (83%) are payroll related and paid every two weeks.. Balance :Remaiinng rigin al ud 48,911,320 ,A nd get 49,197,250 52,835,022 24,091,364 51.0% 29,758,350 23,076,672 56.3% Total Expenditures 52,744,563 Snow:141-5 uei Total Revenues Budget Surplus/(Deficit) (3,833,243) (3,637,772) (4,652;463) Other Funds Like the General Fund, most other funds have also been affected by the recession. Special revenue sources, which fund specific types of ongoing operational services, have also experienced declines, and like the General Fund, they are starting to bottom out and show sighs of modest growth. Prop A Transit, Prop C Transit, Measure R Transit,- Prop .172 Public Safety Augmentation, and Prop 42 transportation fluids are all based on . sales tax .revenueS. but are distributed to cities .using different allocation, methods... While these funds have experienced declines in the past few years, they have not been as significant as those in the General Fund and they are now starting to show a little bit stronger growth than sales tax in the General Fund. Prop A and C and Measure R are all Los Angeles County 'A cent sales tax revenues that are allocated locally based on population and all are projected to .exceed last, Year's total as well as this year's - budget estimates. Prop 172 sales tax revenues on the other hand, which are based on statewide sales tax and fund public safety programs, is now projected to be lower. than. last years. revenues as well as this year's,budget estimate. Gas Tax revenue is based on a flat 18 cent per gallon tax and is. allocated to cities based on population. This revenue sow-ce provides funding for the City's street maintenance programs. Gas Tax revenue declined sharply over a three-year period before reversing • the trend and increasing by 1.8 percent in 2009-10. In 2010-11, it is expected to be slightly below last year's total and right in line with the current year budget estimate. Two other revenue sources that support ongoing safety operations are parking fines and vehicle code violations. Both revenues are projected to be below last.Siear's total as well as. below the current year budget estimate. There are sufficient reserVeS :in the Traffic Safety Fund .so that the budgeted transfer can be made to the General Fund during the current fiscal year but this will have to be evaluated in the upcoming year. In the CDC budget, assessed valuations decreased slightly in the Merged' Project Area by .34 percent while it increased in the Citywide Area by 1.5 percent. Both of these project' 'area are expected to experience declines in assessed valuations as the county is now processing -the many pending appeals on commercial properties. Additionally,' they shifted $6:5 'million from the CDC to the ERAF fund in 2009-10 and the CDC is obligated to, spay an.additional -.$1.3 million to FISCAL YEAR 2011-12 OUTLOOK Bm71-. 10-i. Prepared by: Tom Bachman • Assistant City Manager . the ERAF fund in the current year-. The City borrowed the -$6.5 Million last year from the housing fund to make this payment and will again borrow the $1.3 million this Year. • As if the two-year transfer of existing redevelopment funds to the ERAF were not enough, the governor has now proposed that all redevelopment agencies be eliminated as part of his plan to solve the state's ongoing budget deficit. The outcome of this propdsal . is undertain and causes a great deal of uncertainty on the CDC and its . ability to promote ebonOmic development in the City. An additional exposure that the City has to the proposed plan to.- eliminate redevelopment agencies is that in addition to the CDC department staff that is fully funded by -redevelopment funds, many other City staff members who support • redevelopment . activities: --charge approximately $800,000. per year in personnel costs to the agency that would have to be otherwise absorbed or eliminated if this proposal is successful. • The City faces a serious financial crisis that if not addressed over the next eighteen months- will result in the City exhausting all of its available liquid reserves and being left with a budget deficit. The City is projected to have between $6 million and $7 million in available reserves at the end of the current fiscal year and the preliminary deficit for next _year is. projected to be $7:3 million. Simply put, the City must significantly reduce its ongoing structural deficit in the General Fund for the 2011-12 Fiscal -Year and must balance the :budget by -the 2012-13 Fiscal Year. This will require the -City to make adjustments to its -cbst structure and the Methods it uses to provide services. In addition to declining revenues Over the last three years that have resulted in lower resources, the city has used up most of its available reserves. When combined with growing costs over the next three years, the City will experience growing deficits that can: no longer .be funded with reserves. The City's pension and medical costs have grown Substantially over the last few years and will continue to grow over the -next several years. In order to offset these increases,- the-City Council has identified these twe key areas in which cost containment -measures must be implemented. Staff has already presented the stumnary -budget information fOr2011-12• to the City .CounCil including the size of the deficit and the projections. for the •following tWO years.' Based on preliminary direction from City Council, staff will return to CitY' Council by -the end - of March with a plan to reduce the deficit. -This plan -will include items that will riot only reduce the immediate costs of services but also continue the restructuring of •the City's budget so that service levels can be sustained by current revenues on an ongoing basis. • Attachments No. 1 2009-10 General Fund Revenue and Expenditure Summary . No. 2 2009-10 Non-General Fund-Revenue 'and .Expenditure Summary Attachment 1 2010-11 GENERAL FUND REVENUE AND EXPENDITURE SUMMARY Shown below is a -sumniary: of the 2010-11 adopted budget with revenues and expenditures through the month of ,January (58 percent of the year). Certain of the larger revenue sources are running well below the 58- percent mark due to timing of when revenues are received during the fiscal year. The top ten revehues . are discussed below. • . i NUt'SOUR E : . "A) of !,‘Total ( )riginal _Budget 1mended _Budget VID Aciwil 9,004,529 Balance Rerilainitig_ 7,639,471 % Received., Property Tax . 34.0% 16,644,000 16,644,000 54.1% Sales Tax 24.5% ' 12,000,000 12,000,000 6,228,528 5,771,472 51.9% Interest 4.9% 2,375,000 2,375,000 1,417,685 957,315 59.7% Franchise Tax 6.7% 3,300,000 3,300,000 511,184 2,788,816 15.5% Overhead Chargebacks . 4.1% 2,000,000 2,000,000 939,541 1,060,459 47.0% Ambulance Service 3.8% 1;850,000 1,850,000 824,998 1,025,002 44.6% Business License Tax 4:0% 1,950,000 1,950000 1,505,615 444,385 77.2% Sales TaX Reimbursement 2.3% 1,115,000 1,115,000 0 1,115,000 0.0% Transient Occupancy Tax 1.5% 750,000 750,000 336,110 413,890 44.8% Other Revenues 10.9% 5,322,670 5,592,670 3,352,383 2,240,287 59.9% Transfers In 3.3% 1,604,650 1,620,580 985,313 635,267 60.8% Total Revenues - 100.0% 48,911,320 49,197,250 25,105,886 24,091,364 51.0% Properly taxes — Property tax revenues, which include the Supplemental in Lieu of VLF amount, make up almost 35 percent of General Fund revenues. It is made up of two main components, (1) property. ;taxes based on real property Iodated within the City, and (2) the supplemental in lieu of VLF property tax that grows each year based on the increase or decrease in the total city wide assessed valuation. Total assessed valuation in the City decreased in 2010-: 11 by 0.2% after- declining .2.4% in the prior year. Residential properties, which comprise 90 percent of General Rind property tax revenues, were down 0.4% as compared to a 3.7% decrease in the prior year. . The supplemental in lieu of VLF portion declined in 2009-10 by 2.4 percent ($209,000) due to the decrease in total assessed valuation in the City. It will decrease by $18,000 (0.2%) during the current year because this revenue source is tied directly to changes in assessed valuation. While the decline in assessed valuation and property taxes has decreased from the prior year, the cumulative decrease in property tax revenues in the General over the two-year period is estimated to be $1.1 million (6%). There are still a large number of commercial assessment appeals pending with the County. The revenue loss from these appeals could be between $1 million - $2 million. While most of these commercial appeals are within redevelopment project areas, they would have an indirect effect on General Fund revenues to the extent that they lower total assessed valuation in the City, which affects the supplemental in lieu of VLF portion. Property tax revenues through January were $9,004,529 and are .projected to exceed their revenue estimate for the year due to a smaller than expected decline in assessed valuations. Sales Tax — Sales tax revenues, which include the triple flip, are at $6,228,528, or 51.9 percent of its budget estimate through the first, seven Months of the year and include the first half of the triple flip amount of $1,529,440. This is higher than the $5,726,667 amount at this time last year, although some of the increase over this seven-month period is due to the size and timing of advances from the state rather than a direct increase in sales tax revenues. Sales tax revenues appear to have bottomed out and are beginning to show a modest increase after three consecutive years in which. sales taxes revenues declined. The auto industry in general appears to have stabilized but the City Still has certain . dealerships that are struggling. There are also many vacant midsize and large stores ,still remaining in the City. The expansion of the mall that followed the move of Best Buy to that location is ongoing and it is expected to help revitalize that property. The other vacancies will take more time to re-tenant. In many cases, the new tenants that move into those midsize and large stores will generate less sales tax revenues than their predecessors. . . . . . „ „ This growth is expected to be very gradual and will take another four to five years before it reaches it previous levels generated in 2006-07. Sales tax peaked at $14.2 million in 2006-07 and last year 'generated $11 million, a 22.3% decrease• over that three-year period. The estimate for the current year is $12 million, although it appears sales tax may fall a little short of that mark. . . Interest — Interest income is right where it should be at this time of the year., This is because essentially all of the City's interest income of $2.4. million comes - from loans to the redevelopment agency and is paid monthly to the City. .ThOse, rates are set in the agreements between the City and the CDC. With diminishing reserves and interest rates at about 0.5 perCent, the City receives very little interest income on its fund balances. . . . . Franchise Tax Franchise tax receipts are only at $511,184 or 15.2 percent due to the fact that large payments from the utilities are not received until later in the year and only one quarter's payment has been received from both Athens . Disposal and Charter Cable. This revenue, source should meet, or be slightly below its budget estimate of $3.3 million for the fiscal year. Overhead Chargebacks — These are budgeted chargebacks to various department and funds that receive external funding. This revenue source has been reduced in recent years as the. City cuts back on staffing and other expenditures, there are less General Fund Costs to be charged back to the other funds. . . • • , Ambulance Service — Ambulance transport revenues for the first seven months' are $824,998 or 44.6 percent of their revenue estimate with only six months of revenue received to date.' Revenues for the same period last year were $857;268. This revenue source is projected to fall short of its budget estimate of $1,850,000 for the fiscal year. • Business License Tax -7- Business license revenues are-at $1,505,615 :(77.2%) throtigh -seven months as the majority of business license renewals are due hr January:: This-is the one revenue source that has consistently grown throughout the recession: :-While . all other: revenues- either declined or stayed flat. This revenue sources is expected to. exceed its budget estimate of $1,950,000 during the fiscal year. • . . . • . . . . • Sales Tax Reimbursement — This reventie source reimburses the General Fund for current year and prior year sales tax revenues that have been diverted: to the • Community Development Commission for repayment of the CFD bonds. The Current year portion will not meet its budget estimate due to sales declines at the Mall. The entire annual amount is repaid at the end of the fiscal year. . . • . . Transient Occupancy Tax — Transient occupancy taxes are at $336,110 (44.8 percent) and only include six months payments. This is Slightly higher than last year's:total of $324,381 at the same time of year. . This revenue sotnce has declined dramatically oVer the last twb fiscal years as the recession has battered the hospitality industry and is now only starting to bottom out and show slight gains. . . . . , . Other Revenues — This revenue source contains all other- re -Venues, including the Prop A Exchange and is at $3,352,383 (59.9 percent) for the year. These revenues, in total, should exceed their budget estimate due to the sale of additional Prop A funds that resulted . in an additional $270,000 in General Fund revenues. . • - . . • Fund Transfers — This revenue sourCe includes transfers from the Traffic -Safety; Public Safety Augmentation and West .Covina Service Group Funds. The Public Safety Augmentation Funds, which are sales tax based, are down significantly like all other sales tax based revenues. This decline should be offset by an increase in parking fines: This tev6iiue' Source,- in.total, should be very close to its budget estimate for the year. • '• ;• . A chart of expenditures for 20104 .1 is shown below. EXPENDITet&S , , °/;, 01 Total Original Budget Amended 13u d get YTD Aetna I 124,697 13alance ,Remamtng Expended ' City Council 0.5% 268,164 268,579 143,882 46.4% General Administration 1.9% 1,014,267 1,052,621 521,808 530,813 49.6% City Clerk : 1.3% 678,910 680,428 447,309 233,119 65.7% Finance 4.5% 2,379,208 2,379,208 1,376,151 1,003,057 57.8% Human Resources 1.1% 558,612 558,612 262,882 295,730 47.1% Planning 0.9% 449,534 449,916 226,131 223,785 50.3% Police 50.3% 26,540,575 26,562,900 14,653,275 11,909,625 55.2% Fire 27.3% 14,421,136 14,437,388 8,642,463 5,794,924 59.9% Public Works 8.9% 4,674,403 4,682,215 2,479,217 2,202,998 52.9% Community Services 1.4% 739,488 739,488 425,861 313,628 57.6% Transfers Out 1.9% 1,020,266 1,020,266 595,155 425,111 58.3% Total Operating Budget 52,744,563 52,831,622 29,754,950 23,076,672 56.3% Net Operating Budget Surplus/(Deficit) (3,833,243) (3,634,372) (4,649,063) 1,014,692 Capital Projects Total 0.0% 0 3,400 3,400 0 100.0% General Fund Budget Total 100.0% 52,744,563 52,835,022 29,758,350 23,076,672 56.3% Most departments are on track at this point in the year to stay within their budgets. The City is experiencing additional animal control costs as both calls for service and housing of animals are seeing a significant increase in volume. City staff is working with the County to further evaluate these- increases and will bring some options forward to the City Council to address this issue during the budget process., The Fire . Department is running ahead of budget due to the inability to implement the reduction of one ambulance that was part of the current year budget cuts. Four recent retirements should help reduce overtime costs and two other positions are being held vacant in an effort to achieve budget savings to offset the ambulance cost. REVENUE EXPENDITURES FUND# FUND DESCRIPTION Adjusted Estimate FY 09-10 . . As of 12/31/2010 report run 01-11-11 Percent of Estimate - Adjusted Budget FY 0940 . ' As of 12/3112010 • report run 01-11-11 Percent of . Budget SPECIAL REVENUE FUND TYPES 111 FEE & CHARGE 1,516,700 604,381 39.8% .:::::: %... 1,511442 . 623,041 41.2% 116 STATE ASSET FORFEITURES 7,000 11,331 161.9% . .• 15,300 15,300 100.0% 117 DRUG ENFORCEMENT REBATE 7,000 123,398 1762.8% 499,583 169,242 33.9% 118 BUSINESS IMPROVEMENT TAX - 42 #DIV/01 4,500 - 0.0% 119 AIR QUALITY IMPROVEMENT TRUST 122000 34,031 27.9% 155,674 26,497 17.0% 120 INTEGRATED WASTE MANAGEMENT 70,000 17,541 25.1% 66,839 29,876 44.7% 121 PROPOSITION "A" 1,589,000 756,573 47.6% ' 1,764,359 . 1,506,020 85.4% 122 PROPOSITION "C" 1,195,000 505,639 42.3% , 3,346,291 623,804 18.6% 123 TRAFFIC SAFETY 1,175,000 412,713 35.1% ••• 1,204,956 572,644 47.5% 124 GASOLINE TAX 1,812,100 782,231 43.2% „ 1,749,788 734,715 42.0% 125 PROP 42 TRAFFIC CONGESTION RELIEF 1,124,826 103,256 9.2% ::: 1,516,053 29,480 1.9% 126 PROP 19 - 18 #DIV/01 • • 5,435 2,848 52.4% 127 POLICE DONATIONS 3,876 9,139 235.8% '::::::::: 7,923 1,803 22.8% 128 TRANSPORTATION DEV, ACT 53,247 - 0.0% 113,562 . 52,352 46.1% 129 INTEGRATED WASTE MANAGEMENT 179500 42,684 23.8% 145,349 49295 33.9% 131 COMMUNITY DEVEL. BLOCK GRANT 1,321,603 376,019 28.5% 1,952,470 463,924 23.8% 133 TRAFFIC ENFORCEMENT GRANT - - #DIV/01 - . ADIV/0! 134 COPS/SCHOOL-BASED PARTNERSHIP - - 1/DIV/01 - #DIV/0! 135 BJA BLOCK GRANT 1997-1999 - 1/DIV/01 _. - #DIV/01 140 F.A.U.A.S.T.E.A./T21 515540 11,165 2.2% .• 827564. 43,195 52% 143 L.A. COUNTY PARK BOND - 186 1/DIV/01 . 152,328 124,027 81 4% 144 TREE FUND - 1,067 #DIV/01 . . - #DIV/01 145 WASTE MGT ENFORCEMENT - GRANT 15,800 15,770 99.8% 15,800 3,756 23.8% 146 SENIOR MEALS PROGRAM . 277,716 110,971 40.0% 208,794 86,239 .. 41.3% 148 SCAOMD ELEC. VEH. CORRIDOR GRANT - . - #DIV/01 . - - 1/DIV/01 149 USED OIL BLOCK GRANT 43,606 19,377 44.4% :;:;:;:;:; 28,151 8,837 31.4% 150 INMATE WELFARE 15,000 700 4.7% ii,' ' 13,356 . 9,342 69.9% 153 PUBLIC SAFETY AUGMENTATION 525,000 172,105 32.8% 525,000 262,500 50.0% 154 PRIVATE GRANTS - - #DIV/01 - - . 1/DIV/0! 155 COPS/SLES 100500 31,592 31.6% 178,126 41,938 235% 158 C.R.V. / LITTER REMOVAL GRANT . 25425 70 '0.3% 28,184 6,321 224% 159 SUMMER MEALS PROGRAM 29599 20,547 69.2% 29599 19,359 65.2% 181 MAINTENANCE DISTRICT #1 339,000 151 570 447% 439,608 177524 404% 182 MAINTENANCE DISTRICT #2 143,500 • . 57,683 40.2% : 200,485 42,030 21.0% 183 WC CSS CFD .100,000 59,195 59.2% 130,392 39,848 30.6% 184 MAINTENANCE DISTRICT #4 1539,000 439,004 423% 1563,144 439,572 412% 186 MAINTENANCE DISTRICT #6 '145500 67294 46.4% 164579 58491 35.5% 187 MAINTENANCE DISTRICT #7 : 110,000 . 59525 537% • 0. . 150539- .. 57782 .38.4% 188 CITYWIDE MAINTENANCE DISTRICT 1A76A37 625A98 • 424% . 1,393;566 628,094 .45.1% 189 SEWER MAINTENANCE 2557385 1551571 - 415% . 2507567 . 1,192979 475% 190 BUSINESS IMPROVEMENT DISTRICT 65,000 27439 42.% • 64,794 • 15,478 23.9% 193 BJA LLEBG 2000-2002 - - #DIV/01 - .1/DIV/0! 194 OCJP-CLETEP - 1/DIV/01 - #DIV/0! 195 BULLET PROOF VEST GRANT 4,576 #DIV/01 . - - #DIV/0! 196 OJP-STATE DOMESTIC PREP EQUIP GRANT - #DIV101 #DIV/O! 197 COPS/SRO - - 1/DIV/01 - #DIV/ol 198 OTS GRANTS - 34,629 #Div/ol 19,320 .. 23,923 1235% 203 CHARTER SETTLEMENT FUND - 17 1/DIV/01 49550, 24825 50.0% 204 COPS TECHNOLOGY GRANT - . 3 1/DIV/0! . . 0 #DIV/01 205 PEG FUND - 533 - 1/DIV/01 , 30,148 5,150 17.1% 207 OTS GRANTS 3,799 0.U%i. 3,799 1,210 .31.8% 208 JUSTICE ASSISTANCE GRANT 43,896 37577 86.5%; 119529 54,209 452% 211 LAND AND WATER CONSERVATION - - #DIV/0! ' - #DIV/01 212 ART IN PUBLIC PLACES 14,218 1/DIV/01 16,098 5,437 33.8% 214 USDOJ COPS GRANT - . #DIV/01. - 1/DIV/01 215 N AZUSA RELINQUISHMENT 524 #DIV/0! 381,241 ' 0.0% 218 2006 HOMELAND SECURITY GRANT - - #DIV/01 . - 1/DIV/01 219 FIRE TRAINING 15,000 20,597 137.3% 15,000 8,600 57.3% 220 WC COMMUNITY SERVICES FOUNDATION 11,028 20,541 . ' 186.3% . 65,861 13,889 21.1% 221 POLICE PRIVATE GRANTS 2,015 #DIV/01 12,166 1,367 11.2% 222 2007 HOMELAND SECURITY GRANT - - #DIV/01 - - . 0.0% 223 HAZARD ELIMINATION SAFETY - 57,435 #DIV/0!.,, - 1/DIV/0! 224 MEASURER 900,000 359,720 ' 40.0% 719,689 206,978 28.8% 225 CDBG-R - 2,959 1/DIV/01 '. 28,263 14,758 52.2% 226 ARRA - STIMULUS PROJECTS - 35,180 1/DIV/0! 1;3 05,686 794,983 60.9% 227 HOMELAND SECURITY GRANT _ - #DIV/01 47,510 0.0% 228 . RECOVERY BYRNE GRANT - 16,513 .#DIV/01 199,187 39,644 19.9% 229 RUBBERIZED ASPHALT CONCRETE GRANT - - 1/DIV/01 250,000 226283 90.5% i'TotAi.:..WCIASiffiltiniiiETta115..PkES 18,573,183 7217,771 392% 25,444,945 9579512 3751 . . REVENUE EXPENDITURES FUND# FUND DESCRIPTION Adjusted Estimate FY 09A0 ' As 0112131/2010 report run 01-11-11 Percent of • Estimate Adjusted Budget FY 09-10 As of 1213112010 report run 01-11-11 Percent of Budget CAPITAL PROJECT FUND TYPES 160 CAPITAL PROJECTS - • 1,727 #DIV/01 1,218,921 51,555 4.2% 161 CONSTRUCTION TAX 40,000 39,923 99.8% 240,693 12,810 5.3% 163 PARKS - ' - #DIV/01 - - #D1 V/01 170 PARK DEDICATION FEES "A" - 19 #DIV/01 7,000 1.167 16.7% 171 PARK DEDICATION FEES "B" _ • 31 #DIV/01 39,447 7,400 18.8% 172 PARK DEDICATION FEES "C" _ 165 #DIV/01 125,281 5,760 4.6% 173 PARK DEDICATION FEES "D" 1 #DIV/01 500 - 0.0% 174 PARK DEDICATION FEES "E" - 50 #DIV/01 12,085 - 0.0% 175 PARK DEDICATION FEES "F" - 19 #D1V/01 - - #DIV/0! 176 PARK DEDICATION FEES "G" 22,500 203 0.9% 57,653 30,566 53.0% 177 PARK DEDICATION FEES "H" - 0 #DIV/01 200 - 0.0% 367 CIP-VEHICLE - 650 #DIV/01 .. . #DIV/01 :,t()t.ALN0i.itqt.41;::17.i3.041FP_N_I*6 ,. 62,500 42,689 • 68.3% 1,701,780 109,258 6.4% DEBT SERVICES FUND TYPES . 300 DEBT SERVICE - CITY 14,142,3 12216,965 864% 14,654424 12079,286 82.4% {Of- -:DEBTSERVICESFUNDTYI 14,142123 12,216,965 864% 14,654424 12079286 82.4% PROPRIETARY FUND TYPES INTERNAL SERVICE FUND TYPES 360 UNINSURED LOSS CITY PROPERTY - 16,908 #DIV/01 104,525 26,882 24.8% 361 GENERAL LIABILITY 981,006 491,164 50.1% 979,713 1,186,342 121.1% 363 WORKER'S COMPENSATION 1,247,910 594,238 47.6%; 1,365,993 874,536 64.0% 365 FLEET MANAGEMENT 1,549,047 736,247 47.5% 1,551,708 694,220 44.7% 368 RETIREE LUMP SUM BENEFITS 138,435 69,374 60.1% 38,600 30,400 78.8% ENTERPRISE FUND TYPES: - • - 370 DARE ENTERPRISE - 13 #DIV/01 - - #0IV/01 375 POLICE SERIVCE GROUP 2,080,000 1,761,139 84.7%1::::::::: 2,285,245 1,156,852 50.6% . ' APIA14PR9P,IAT413YTJAIRETYRgs .. 5,996,398 3,669,082 61.2% : 6,325,784 3,968,232 62.7% COMMUNITY DEVELOPMENT COMMISSION CDC CAPITAL PROJECT FUND TYPE: 862 HOUSING SET-ASIDE 3,900,000 286,834 7.4% 9,472,503 2,396,080 25.3% 876 MERGED AREA CAPITAL PROJECTS 2,105,000 2,052,160 97.5% 2,605,375 844,802 33.7% 877 CITYWIDE AREA CAPITAL PROJECTS 520,000 252,833 48.6% 290,580 101,039 34.8% CDC DEBT SERVICE FUNDS: 853 CFD DEBT SERVICE 4,332,000 1,435,559 33.1% 3,736,750 2,629,939 70.4% 882 MERGED AREA DEBT SERVICE 16,897,000 6,581,154 38.9% 16,080,414 5,000,451 31.1% 883 CITYWIDE AREA DEBT SERVICE 2,514,000 1,007,235 40.1% 2,164,000 708,603 32.7% CDC Fund Transfers In / Transfers Out . (6,050,000) (1,250,000) 20.7% • (6,050,000) (1250,000) 207% . .44,t4.42.4),107(iik4fiiiRifs' ). _ . 24,218,000 10,365,776 42.8% 28,199,621 10430,913 37.0% fitiMidigalitiZit fro ati- 63,092,205 33,612,283 53.3% '''. 76,326,555 36,167,201 474% City of West Covina Memorandum TO: Andrew G. Pasmant, City Manager and City Council FROM: Shannon A. Yauchzee AGENDA ITEM NO. DATE February 15.2011 Public Works Director/City Engineer SUBJECT: REQUEST FOR REALLOCATION OF PROPERTY TAXES LOS ANGELES COUNTY SANITATION DISTRICT NO. 21 (REORGANIZATION NO. 1-2000) LOCATION: 2701 SOUTH WOODGATE DRIVE (EXISTING CHURCH) RECOMMENDATION: is recommended that the City Council adopt the following resolution: RESOLUTION NO. 2011 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, ADOPTING THE JOINT RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF LOS ANGELES, THE BOARD OF DIRECTORS OF COUNTY SANITATION DISTRICT NO. 21 OF THE COUNTY OF LOS ANGELES, AND THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, APPROVING AND ACCEPTING NEGOTIATED EXCHANGE OF PROPERTY TAX REVENUES RESULTING FROM AN ANNEXATION TO COUNTY SANITATION DISTRICT NO. 21, BEING REORGANIZATION NO. 1-2000. DISCUSSION: At the request of the property owner, the Los Angeles County Sanitation District (LACSD) has submitted an annexation that includes four existing residential homes, located at 2138, 2142, 2146, and 2150 Evangelina Street, and one existing church located at 2701 South Woodgate Drive for an allocation of Annual Tax Increment Funds. In order for the properties to connect to the sewer, LACSD requires the parcel be annexed to a Sanitation District. Since the passage of Proposition 13, provisions of the California Revenue and Taxation Code have been adopted which specify that prior to an area being annexed to a special district, the property tax revenue for the area shall be reallocated, as previously negotiated between the agencies receiving property tax revenue from the area. Many of the undeveloped areas in the City are not currently annexed to the LACSD, and in order to develop, the area must be annexed to a district so that they can receive sanitary sewer service. The LACSD provides both sewage treatment facilities and major sewer lines connecting the City's sewer system to sewage treatment plants. The construction, maintenance, and operation of these district facilities are funded by a combination of an ad valorem property tax and individual sewer assessment fees. ALTERNATIVES: There are no other alternatives if the properties are to be developed with the sewer improvements in accordance with the provisions of local ordinances and State statutes. If the City Council chooses not to approve the proposed exchange of property tax revenues, the proposed annexation would not go forward and the area within the annexation would not have the rights to receive sanitary sewer services. ZAAGENDA - 201 11Property l'ax Sharing Request Annex Reorgan 1-2000.doc Andrew G. Pasmant, City Manager and City Council Page 2 — February 15.2011 FISCAL IMPACT: The reallocation of the property tax proportionately reflects the existing tax allocation in the majority of the City, which is already in the LACSD. The reduction in the City's future property tax revenue in favor of the LACSD for the proposed annexation area is about 0.11% of the City's apportionment of the property tax. A religious organization owns most of the land in the proposed annexation area and since religious organization properties are not taxed, the amount being reallocated to the LACSD is based on the four privately owned properties' assessed values. Since the assessed value for these properties have yet to be determined, the amount of property taxes paid will be used to determine the reduction in the City's future property tax revenue in favor of the LACSD. The annual tax increment for the City of West Covina TD #1 is derived as follows: Tax Rate Area 08298: • Property Tax paid in 2010-2011 =$12,978 City's apportionment is $1,880.86 (14.4927% of $12,978) Sanitation District's share is $2.03 (0.1078% of $1,880.86) The annual tax increment for the City of West Covina Sewer Maintenance District is derived as follows: Tax Rate Area 08298: • Property Tax paid in 2010-2011 = $12,978 • City's apportionment is $42.89 (0.3305% of $12,978) • Sanitation District's share is $0.01 (0.0025% of $42.89) The total adjusted amount represents a reduction of $2.04 of the City's annual tax apportionment attributable to the land within the boundary of the annexation. /At' Prepar by: Miguel Hernandez Civil Engineering Associate Reviewed/Approved b)/: Shannon A. Yauchzee irector/City Engineer Reviewed/Approved by: Finance Attachment No.1 Map Attachment No.2 County Sanitation Districts of Los Angeles Joint Resolution (City) Attachment No.3 Resolution Z:Vs.GENDA - 201 I \Property Tax Sharing Request Annex Reargan I-2000.doc ----- • TR. NO. 24701 t N M.B. 855, 70 - 71 r% RANCHO LA PUENTE ,•,•°. 41' , • • n • CITY A,f N724 36' 4rW 43. C.0.,. 4.. ..0•° e •i`99-< 6 r-.,/ \. f6-7 7 -641 .•• •:: 24' - 44•- - *V••• (1-31-79) • 0 ", • • lIAA Si ••-.. 's x,,,,-0 ,. --- • - - N .''c .,0' • • 4,, o g W. ..... -. - ". -,s. 56426'07E 63.04' . 07'0. +0 TRUE POINT OF BEGINNING 010 107).•*..* <1. , /4144; 4,20 II * 76. . o 400> 42 , . :id" o (4' f'1.N.... -4 • 40 4,401 <0 o , • 41 • o 39 . 1.-. CI T Y OF - REORGAN. NO. 1-2000 ...el NA PR lge° .--. PARCEL 3 _;b. -A, PARCEL 1 '?:•16" 4 % "C"' \•.T ' .‘ \.``",ss • i•• 4 IFEST CO KIN.,4 VICINITY MAP NO SCALE COURSE DATA (I) If2-17-60/ ‘rn , 4 4.-' \:1-'" ..... .°,9, , 06 LI N7816'08"E 23.14' - m , • . 1.4 A' 47-3 . ............. 4 n L2 54936'00"E 158.99' 3,- - - . . • . o 2 . • + • ..4. .' ' .. .' • ' • 40. 44 41111.. L3 55831'50"E 68.00' r • . Lc, . • . . . • .' -% ' .. . . 0+ co rn o . ' ' . • • t • " NO. 19882 • . p.; M: . . 4,44,4. ....... . . .1.5 . . . . .16 a' • • • • .4v. . :22,0, z • p',M.B• 41,.. ; • - . • *V a • • . ' . 40+ • , • A'14- . ,. I 111,44.04,4111t4Alkd LII fr ,/ / j/Lio 'Or" / // FRANCESCA DR L4 572'12'58"E 83.49' L5 N9000'00E 61.11' L6 53856'42"W 205.73' L7 506'54'36"W 89.04' L8 584°21'17"W 144.10' L9 NO7'56'58"W 426.01' L10 N8433'00"W 90.00' L11 584'2117W 545.89' i "61:3 /, (ii) L12 N06°54'36"E 89.04' .t.4 Y'r L8 t POINT OF BE G INNING 1 (7-72-78) L13 N3856'42"E 205.73' qj ••n• s.o. NO • 21 / •P AR CEL 2 ANNEX INTO C • 6,6-D9 L14 N9000'00"E 19.39' **/ • FELICIA ST L15 N6949'46E 78.30' 0 4 / DELIA PL L16 N59'13'2I"E 79.15' / 4v, L17 N43'51'31"E 135.48' 09) 414 / L18 564'26'07"E 45.08' - 4 ... t C)• 16 . 019 R-350' L=426.91' D=6953'07" M RI -91 • 411,4,+4. ••••• nn• `• / ' # ../.; L20 56426'07"E 96.94' L21 S43'51'31"W 135.4B' re-24,-.981 '1'. .." _ • ,,-(:\ 1,,,, cgo.11,9i'w 70 rf:37') L.- „, ,, .... " ,„.... --....- *4 sopOP°' . L23 569'49'46'W 78.30' 41* .A.. rCi(•' '091 ' . L24 590'00'00"W 19.39' 1 4, • P. 1, 43 - 44 .. ...,. ' L25 N38'56'42"E 266.18' % • •• v (i) •O. ..... o (9-7-76) • -1.. • • 0 109' 200' 300' •4 • ‘ .. ' •P / 2 'EST CO VI/VA 0 Prior Annexations shown thus MrCa071.41r 0,41T/ Boundary of Co.Son.Dist.No. 15 prier to COUNTY SANITATION DISTRICT NO.158.21 Annexation/Detachment 0 OF LOS ANGELES COUNTY,. CALIF. ASSESSCIrS PARCEL ACME'S'S OFFICE OF CHIEF tNGINEER Boundary of Co.Son.Dist.No. 21 prior to 87J1 006 011 - 17 PORT/LS' ,/4?, STEPHEN R. ILACUIN 8731 021 001, Ot2? Annexatton/Detachment CHIEF ENGINEER AND 'GENERAL RANAGER Area of Annexation / Detachment Parcel 1 1-1 Parcel 2 F-1 Parcel 3 I I Total REORGAN I 2AT ION 1.676 3.641 0.424 5.741 Acres NO. 1-2000 0.003 0.006 0.0007 0.0097 Square Miles Recorded: . ._ 2 Attachment No. JOINT RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF LOS ANGELES ACTING IN BEHALF OF Los Angeles County General Fund Los Angeles County Library Los Angeles County Flood Control Los Angeles County Fire - FFW THE BOARDS OF DIRECTORS OF COUNTY SANITATION DISTRICTS NOS. 15 AND 21 OF LOS ANGELES COUNTY, AND THE GOVERNING BODIES OF City of West Covina City of West Covina Sewer Maintenance District Three Valleys MWD-Rowland Area APPROVING AND ACCEPTING NEGOTIATED EXCHANGE OF PROPERTY TAX REVENUES RESULTING FROM PROPOSAL ENTITLED "REORGANIZATION NO. 1-2000" (Detachment from County Sanitation District No. 15, Annexation to County Sanitation Districts Nos. 15 and 21) WHEREAS, pursuant to Section 99 and 99.01 of the Revenue and Taxation Code, prior to the effective date of any jurisdictional change which will result in a special district providing a new service, the governing bodies of all local agencies that receive an apportionment of the property tax from the area must determine the amount of property tax revenues from the annual tax increment to be exchanged between the affected agencies and approve and accept the negotiated exchange of property tax revenues by resolution; and WHEREAS, the governing bodies of the agencies signatory hereto have made determinations of the amount of property tax revenues from the annual tax increments to be exchanged as a result of the reorganization of territory entitled Reorganization No. 1-2000, which includes detachment of territory from County Sanitation District No. 15 and annexation to County Sanitation District No. 21 (Parcel 1); annexation to County Sanitation District No. 21 (Parcel 2); and annexation to County Sanitation District No. 15 (Parcel 3). NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS: 1. The negotiated exchange of property tax revenues resulting from the detachment of Parcel 1 from District No. 15 and the annexation of Parcels I and 2 to County Sanitation District No. 21 is approved and accepted. 2. The negotiated exchange of property tax revenues resulting from the annexation of Parcel 3 to District No. 15 is approved and accepted. 3. For each fiscal year commencing on and after July 1, 2011, or after the effective date of this jurisdictional change, whichever is later, the County Auditor shall transfer from County Sanitation District No. 15 the annual tax increment attributable to the land area encompassed within Tax Rate Area 08423 and transfer said tax increment to County Sanitation District No. 21. 4. No additional transfer of property tax revenues shall be made from any other taxing agencies County Sanitation Districts Nos. 15 and 21 as a result of the proposal entitled Reorganization No. 1-2000. 5. No transfer of property tax increments from properties within a community redevelopment project which are legally committed to a Community Redevelopment Agency shall be made during the period that such tax increment is legally committed for repayment of the redevelopment project costs. 6. If at any time after the effective date of this resolution, the calculations used herein to determine initial property tax transfers or the data used to perform those calculations are found to be incorrect thus producing an improper or inaccurate property tax transfer, the property tax transfer shall be recalculated and the corrected transfer shall be implemented for the next fiscal year, and any amounts of property tax received in excess of that which is proper shall be refunded to the appropriate agency. The foregoing resolution was adopted by the Board of Supervisors of the County of Los Angeles, the Boards of Directors of County Sanitation Districts Nos. 15 and 21 of Los Angeles County, and the governing bodies of City of West Covina and Three Valleys Municipal Water District-Rowland Area, signatory hereto. CITY OF WEST COVINA SIGNATURE PRINT NAME AND TITLE ATTEST: Secretary (SIGNED IN COUNTERPART) JOINT RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF LOS ANGELES ACTING IN BEHALF OF Los Angeles County General Fund Los Angeles County Library Los Angeles County Flood Control Los Angeles County Fire - FFW THE BOARDS OF DIRECTORS OF COUNTY SANITATION DISTRICTS NOS. 15 AND 21 OF LOS ANGELES COUNTY, AND THE GOVERNING BODIES OF City of West Covina City of West Covina Sewer Maintenance District Three Valleys MWD-Rowland Area APPROVING AND ACCEPTING NEGOTIATED EXCHANGE OF PROPERTY TAX REVENUES RESULTING FROM PROPOSAL ENTITLED "REORGANIZATION NO. 1-2000" (Detachment from County Sanitation District No. 15, Annexation to County Sanitation Districts Nos. 15 and 21) WHEREAS, pursuant to Section 99 and 99.01 of the Revenue and Taxation Code, prior to the effective date of any jurisdictional change which will result in a special district providing a new service, the governing bodies of all local agencies that receive an apportionment of the property tax from the area must determine the amount of property tax revenues from the annual tax increment to be exchanged between the affected agencies and approve and accept the negotiated exchange of property tax revenues by resolution; and WHEREAS, the governing bodies of the agencies signatory hereto have made determinations of the amount of property tax revenues from the annual tax increments to be exchanged as a result of the reorganization of territory entitled Reorganization No. 1-2000, which includes detachment of territory from County Sanitation District No. 15 and annexation to County Sanitation District No. 21 (Parcel 1); annexation to County Sanitation District No. 21 (Parcel 2); and annexation to County Sanitation District No. 15 (Parcel 3). NOW, THEREFORE, BE IT RESOLVED AS FOLLOWS: 1. The negotiated exchange of property tax revenues resulting from the detachment of Parcel 1 from District No. 15 and the annexation of Parcels 1 and 2 to County Sanitation District No. 21 is approved and accepted. 2. The negotiated exchange of property tax revenues resulting from the annexation of Parcel 3 to District No. 15 is approved and accepted. 3. For each fiscal year commencing on and after July 1, 2011, or after the effective date of this jurisdictional change, whichever is later, the County Auditor shall transfer from County Sanitation District No. 15 the annual tax increment attributable to the land area encompassed within Tax Rate Area 08423 and transfer said tax increment to County Sanitation District No. 21. 4. No additional transfer of property tax revenues shall be made from any other taxing agencies to County Sanitation Districts Nos. 15 and 21 as a result of the proposal entitled Reorganization No. 1-2000. 5. No transfer of property tax increments from properties within a community redevelopment project which are legally committed to a Community Redevelopment Agency shall be made during the period that such tax increment is legally committed for repayment of the redevelopment project costs. 6. If at any time after the effective date of this resolution, the calculations used herein to determine initial property tax transfers or the data used to perform those calculations are found to be incorrect thus producing an improper or inaccurate property tax transfer, the property tax transfer shall be recalculated and the corrected transfer shall be implemented for the next fiscal year, and any amounts of property tax received in excess of that which is proper shall be refunded to the appropriate agency. The foregoing resolution was adopted by the Board of Supervisors of the County of Los Angeles, the Boards of Directors of County Sanitation Districts Nos. 15 and 21 of Los Angeles County, and the governing bodies of City of West Covina and Three Valleys Municipal Water District-Rowland Area, signatory hereto. CITY OF WEST COVINA SEWER MAINTENANCE DISTRICT SIGNATURE PRINT NAME AND TITLE ATTEST: Secretary Date (SIGNED IN COUNTERPART) ATTACHMENT NO. RESOLUTION NO. RESOLUTION NO. 2010 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, ADOPTING TEE JOINT RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF LOS ANGELES, THE BOARD OF DIRECTORS OF COUNTY SANITATION DISTRICT NO. 21 OF THE COUNTY OF LOS ANGELES, AND THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, APPROVING AND ACCEPTING NEGOTIATED EXCHANGE OF PROPERTY TAX REVENUES RESULTING FROM AN ANNEXATION TO COUNTY SANITATION DISTRICT NO. 21, BEING REORGANIZATION NO. 1-2000. WHEREAS, there are certain areas within the City of West Covina which are to be annexed to the County Sanitation District of the County of Los Angeles; and WHEREAS, pursuant to Section 99 and 99.1 of the Revenue and Taxation Code, prior to the effective date of any jurisdictional change which will result in a special district providing a new service, the governing bodies of all local agencies who receive an apportionment of the property tax from the area must determine the amount of property tax revenues from the annual tax increment to be exchanged between the affected agencies and approve and accept the negotiated exchange of property tax revenues by resolution; and WI-IEREAS, there has been prepared a joint resolution of the Board of Supervisors of the County of Los Angeles, the Board of Directors of County Sanitation District No. 21 of the County of Los Angeles, and the City Council of the City of West Covina; and WHEREAS, this joint resolution specifies the negotiated exchange of property tax revenues for Annexation Reorganization No. 1-2000 for each fiscal year commencing on and after July 1,2011. NOW.. THEREFORE, the City Council of the City of West Covina does hereby resolve as follows: SECTION 1. That the joint resolution of the Board of Supervisors of the County of Los Angeles, the Board of Directors of County Sanitation District No. 21 of the County of Los Angeles, and the City Council of the City of West Covina approving and accepting negotiated exchange of property tax revenues resulting from annexation to County Sanitation District No. 21 being Annexation Reorganization 1-2000 are hereby adopted. SECTION 2. That the Mayor and City Clerk are hereby authorized to execute said joint resolution indicating adoption by the City Council of the City of West Covina. SECTION 3. That the City Clerk shall certify to the adoption of this resolution and send a certified copy to the County Sanitation Districts of the County of Los Angeles. APPROVED AND ADOPTED this 15 th day of February 201 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 resolution was duly adopted by the City Council of the City of West Covina, California, at a regular meeting thereof held on the 15 u' day of February 2011, by the following vote of the City Council: AYES: NOES: ABSENT: City Clerk Laurie Carrico APPROVED AS TO FORM: City Attorney Arnold Alvarez-Glasman Z:\RESOLUTION - 2011 Property Tax Sharing No 21-Annexreorgan 1-2000.doc