01-03-2006 - City Pass-Through of Tax Increment•
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FROM:
Andrew G. Pasmant, City Manager
and the City Council
Tom Bachman, Finance Department
Director
SUBJECT: CITY PASS -THROUGH OF TAX INCREMENT
RECOMMENDATION:
City of West Covina
Memorandum
AGENDA
Item No. ._
Date:- 1/3/06
It is recommended that the City Council adopt the following resolution:
RESOLUTION NO. - A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF WEST COVINA, CALIFORNIA TO ELECT TO
RECEIVE THE CITY'S SHARE OF TAX INCREMENT
REIMBURSEMENTS FROM PROJECTS ADOPTED OR AMENDED
AFTER JANUARY 1, 1994, PURSUANT TO HEALTH AND SAFETY
SECTION 33607.5(B).
DISCUSSION:
Assembly Bill 1290 (AB 1290), which became effective on January 1, 1994, amended the
California Health and Safety Code to exclude individual negotiations of pass -through agreements
with taxing entities. In place of negotiated pass -through agreements, automatic pass -through
payments are made to affected taxing agencies (including cities) for redevelopment project areas
adopted or amended on or after January 1, 1994.
Health and Safety Code Section 33607.5 provides, in part, that the amount to be made available
to taxing entities (including cities) shall be equal to 25 percent of tax increments received by the
agency after the amount required to be deposited in the Low and Moderate Income Housing
Fund has been deducted. The automatic pass-throughs are allocated among taxing entities in
proportion to the share of property taxes each entity receives in the year the funds accrued.
In August of 2003;. the State Legislature passed Senate Bill 1045, an amendment to the Code,
which allows redevelopment agencies to amend their redevelopment plans by extending the time
limits for redevelopment activities and for receipt of tax increment revenues. On December 2,
2003, the West Covina, City Council adopted Ordinance No. 2106, which amended all
redevelopment project areas by extending the time limits.
As an affected taxing entity, the City is eligible to receive a pass through payment from these
amended project areas. To accomplish this, the City Council needs to adopt a resolution `electing
to receive the reimbursement and submit it to the County by January 17, 2006.
FISCAL IMPACT:
If this resolution is adopted, it is estimated the City will receive approximately $38,000 in pass-
thru revenues during the 2005-06 fiscal year.
Prepared by: Tom Bachman
Director of Finance
Reviewed & Approved by:
CDC
Finance docs on track—it/agenda items/cdc/AB1290citypass-througy of tax increment 01-03-06
RESOLUTION NO.
RESOLUTION NO. - A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF WEST COVINA, CALIFORNIA TO ELECT TO
RECEIVE THE CITY'S SHARE OF TAX INCREMENT
REIMBURSEMENTS FROM PROJECTS ADOPTED OR AMENDED
AFTER JANUARY 1, 1994, PURSUANT TO HEALTH AND SAFETY
SECTION 33607.5(B).
Section 1. . WHEREAS:
A: The City Council of the City of West Covina by Ordinance No. 2106 adopted
December 2, 2003, amended the time limits for the Merged and Citywide project areas;
B., The Amended Plan provides for the allocation ' of, taxes from " redevelopment
project areas to the Redevelopment agency pursuant to Health and Safety Code section 33670,
subject to the Agency's obligation to pass through 25% of*such taxes to certain affected taxing
entities; and
C. Under Health and Safety code section 3360715, the Agency is required to pay the
City its portion of the amounts passed through to affected taxing entities if the City elects to
receive such tax increments.
Section 2. Based upon the foregoing, the City Council hereby elects, pursuant to
Health and Safety code section 33607.5 to receive its share of the 25% tax increment pass -
through commencing with fiscal year 2005-2006 and continuing for the remaining term of the
project.
Section 3. That the Mayor shall sign and the City Clerk shall certify to the passage
and adoption of this Resolution and thereupon the same take effect and be in force.
APPROVED AND ADOPTED this third day of January 2006.
Mayor Shelly Sanderson
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 3rd day of January 2006.
AYES:
NOES:
ABSENT:
ABSTAIN:
City Clerk Laurie Carrico
APPROVED AS TO FORM:
City Attorney Arnold Alvarez-Glasman