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HomeMy WebLinkAbout2009-10-06; City Council; 19990; Carlsbad Village Redevelopment Area Plan amendmentCITY OF CARLSBAD - AGENDA BILL AB# MTG. DEPT. 19.990 10/06/09 Hsg/Red Title Amendment to Carlsbad Village Redevelopment Area Plan to Extend Effectiveness Time Limit DEPT. HEAD CITY ATTY. CITY MGR. RECOMMENDED ACTION: INTRODUCE Ordinance No. CS- CS-060 , amending the Carlsbad Village Area Redevelopment Plan to extend the effectiveness time limit for one (1) additional year. ITEM EXPLANATION: In 1981, the Carlsbad City Council ("City Council") adopted the Carlsbad Village Area Redevelopment Plan ("Village Redevelopment Plan"). The original Village Redevelopment Plan was effective for 25-years (until July 21, 2006). The effectiveness date was extended to July 21, 2009, as permitted by Redevelopment Law, as a result of the State's budget crisis and the requirement for the Carlsbad Redevelopment Agency to make Education Revenue Augmentation Fund (ERAF) payments a few years ago. The Redevelopment Plan provides the framework for all of the activities undertaken by the Carlsbad Redevelopment Commission ("Commission") in the Village Redevelopment Area. Because the State of California is again experiencing serious budget shortfalls, it approved legislation (AB 26X4) in July, 2009 requiring Redevelopment Agencies to make additional ERAF payments to local school districts. The legislation included an amendment to Section 33331.5 of the Health and Safety Code that indicates when an Agency is required to make an ERAF payment and when the Agency has allocated the full amount of said payment, the legislative body (City Council) may amend the redevelopment plan to extend the effectiveness time limit by one (1) year. This amendment may be made by Ordinance and does not require any findings of blight or other actions set forth in Redevelopment Law for other types of amendments. The extension of the effectiveness date is intended to assist with the financial implications of the noted ERAF payment. By extending the effectiveness date, a redevelopment agency will have one additional year to implement redevelopment projects and to collect tax increment for its programs and projects before this increment may be used only to repay existing debt. The Legislature believed this action would allow a redevelopment agency to recoup some of the funding lost through the State budget process and these mandatory payments. DEPARTMENT CONTACT: Debbie Fountain 760-434-2935 debbie.fountain@carlsbadca.gov FOR CITY CLERKS USE ONLY. COUNCIL ACTION: APPROVED JO DENIED O CONTINUED D WITHDRAWN O AMENDED D CONTINUED TO DATE SPECIFIC D CONTINUED TO DATE UNKNOWN D RETURNED TO STAFF D OTHER - SEE MINUTES D Page 2 of AB_ By adopting the attached ordinance, the City Council will extend the effectiveness date of the Village Redevelopment Plan to July 21, 2010. As indicated above, under normal circumstances, amending a redevelopment plan is quite complex and time consuming, but AB 26X4 simplifies the extension process for eligible redevelopment plans. There is no public hearing requirement, no special notices and no special findings required to extend the effectiveness date of the noted Plans. The action simply requires approval of the attached Ordinance. It is important to note that the State's action to require the above noted ERAF payments from the Redevelopment Agencies in California is being legally challenged by the California Redevelopment Association (CRA) together with one or more Redevelopment Agencies. The argument is that the ERAF payments are unconstitutional. The Sacramento County Superior Court ruled that these payments are unconstitutional in April, 2009, invalidating a similar 2008 State budget bill requiring ERAF payments this past budget year. The State Legislature reworded the 2009 legislation in an attempt to get around the State Constitution and Superior Court ruling, but CRA and redevelopment agencies still believe the ERAF payments are unconstitutional and will continue the court challenge. The Carlsbad Redevelopment Agency supports the legal challenge and also believes the ERAF payments are unconstitutional. Although the Agency agrees that the ERAF payment is unconstitutional, the approved legislation requires the payment and the funds have been allocated in the Agency's spending plan. Because these actions have been taken, the amended Health and Safety Code (Section 33331.5) allows the extension of the effectiveness date for our Village Redevelopment Plan. The amended code does not require that the ERAF payment be made in order to allow for the extension. It simply requires the legislature to "require the payment" and for the Agency to "allocate the funds" for payment. Based upon these noted facts, staff recommends approval of the attached ordinance to extend the effectiveness date for the Village Redevelopment Plan by one (1) additional year. It is important to note that the South Carlsbad Coastal Redevelopment Area currently does not receive tax increment. Therefore, no ERAF payment is required of the SCCRA and the plan is not eligible for a time extension. As indicated, neither the Redevelopment Agency nor the City is acquiescing to the State's unconstitutional take of redevelopment funds through this action to extend the effectiveness time limit for the Village Redevelopment Plan. FISCAL IMPACT For fiscal years 2009-10 and 2010-11, it is currently estimated that the Carlsbad Redevelopment Agency will be required to make an ERAF payment of approximately $1,627,000 total to the local school district(s) as a result of the State's requirement. The one year extension of the Village Redevelopment Plan will allow the Carlsbad Redevelopment Agency to collect additional tax increment revenue to retire post 1994 debt while continuing to receive tax increment revenue after the one year extension to retire the pre-1994 debt. The extension will also allow additional time for the Agency to complete new redevelopment programs/projects which will generate additional tax increment revenue for the Village Area. AB 26x4 exempts redevelopment agencies that elect to extend their redevelopment plans from the requirement of revising existing tax sharing agreements with other taxing entities as is currently required by redevelopment law. Therefore, there will be no other negative fiscal impact to the Redevelopment Agency or to the City's General Fund. ENVIRONMENTAL IMPACT: Extending the Village Redevelopment Plan is exempt from the California Environmental Quality Act pursuant to Section 15061 (b)(3) of the CEQA Guidelines. The activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. The extension of the Village Redevelopment Plan will not have a significant effect on the environment. EXHIBITS: 1. City Council Ordinance No. CS- CS-060 , APPROVING an amendment to the Carlsbad Village Redevelopment Area Plan to extend the effectiveness date time limit for one (1) additional year. 3 ORDINANCE NO. CS-060 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AMENDING THE CARLSBAD VILLAGE AREA REDEVELOPMENT PLAN TO EXTEND THE EFFECTIVENESS TIME LIMIT FOR ONE (1) ADDITIONAL YEAR PURSUANT TO ASSEMBLY BILL 26 AS CODIFIED IN HEALTH AND SAFETY CODE SECTION 33331.5 WHEREAS, the City Council of the City of Carlsbad ("City Council) adopted Ordinance No. 9591 on July 7, 1981, approving and adopting the Carlsbad Village Redevelopment Plan (hereinafter referred to as the "Redevelopment Plan"); and WHEREAS, Section 33690 (a) (1)(A) of the State of California's Health and Safety Code as enacted by Assembly Bill 26 purports to require the Carlsbad Redevelopment Agency to remit payment to the Supplemental Educational Revenue Augmentation Fund in an amount determined by the State of California's Director of Finance; and 12 WHEREAS, the Carlsbad Redevelopment Agency has, subject to the 1 2 3 4 5 6 7 8 9 10 13 14 16 17 18 22 23 24 25 27 reservation of rights set forth in Section 4 of this Ordinance, allocated the full amount of the Supplemental Educational Revenue Augmentation Fund to be calculated pursuant to applicable law within its Village Redevelopment Area spending plan, consistent with the estimates of the State Director of Finance; and10 WHEREAS, Section 33331.5 of the Health and Safety Code provides that when a Redevelopment Agency is required to make a payment to the Supplemental Educational Revenue Augmentation Fund pursuant to Section 33690 of the Health and Safety Code and the Agency has allocated the full amount of the payment to be calculated pursuant to applicable law, the legislative body may extend the effectiveness of the redevelopment plan by one (1) year;i y ,and, 20 WHEREAS, the effectiveness time limit for the Village Redevelopment Plan 21 may be approved by the legislative body, and neither the legislative body nor the agency is required to comply with Section 33354.6, Article 12 (commencing with Section 33450) of the State Health and Safety Code, or any other provision of this part relating to the amendment of redevelopment plans, including, but not limited to, the requirement to make the payment to the affected taxing entities required by Health and Safety Code Section 33607.7; and, WHEREAS, the City Council desires to amend the Village Redevelopment Plan pursuant to the authority granted in Health and Safety Code Section 33331.5 26 to extend the effectiveness date of the Plan for one additional year to July 21, 2010, and is authorized to do so pursuant to State Redevelopment Law as set forth within Health and Safety Code Section 33331.5; and 28 1 WHEREAS, it is hereby acknowledged by the City Council that the 2 Sacramento County Superior Court has previously ruled that the legislation 3 4 5 in fiscal years 2009-10 and 2010-11; and,6 7 NOW, THEREFORE, the City Council of the City of Carlsbad, California does ordain as follows: 8 SECTION 1. Amendment of the Redevelopment Plan for the Carlsbad 9 Section 33331.5, and notwithstanding any other provision in the Redevelopment Plan, the City Council hereby amends the Redevelopment Plan as stated herein by adoption of this Ordinance, and establishes the following limitations, subject to all other provisions of this Ordinance: 12 A. In accordance with Health and Safety Code Section 33331.5, the effectiveness 13 15 16 17 18 19 20 21 23 24 mandating the ERAF transfer on redevelopment agencies for the 2008-09 fiscal year is unconstitutional and invalidated the required payment to the State, and there is an anticipated additional ruling by a court of competent jurisdiction as a result of anticipated judicial review of Assembly Bill 26 which sets forth an additional requirement for Redevelopment Agencies to make the noted payments Village Redevelopment Project. In accordance with Health and Safety Code of the Redevelopment Plan shall terminate July 21, 2010, after which time the Commission shall have no authority to act pursuant to the Redevelopment Plan, except to pay previously incurred indebtedness, to enforce existing covenants, contracts, unless the Commission has not completed its housing obligations pursuant to subdivision (a) of Health and Safety Code Section 33333.8, including its ability to incur and pay indebtedness for this purpose, and shall use this authority to complete these housing obligations as soon as it is reasonably possible. B. In accordance with Health and Safety Code Section 33333.6(e)(2)(D)(i), and except as provided in subdivisions (g) and (h) of Health and Safety Code Section 33333.6, the Commission shall not pay indebtedness or receive property taxes pursuant to Health and Safety Code Section 33670 after ten (10) years from the termination of the effectiveness of the Redevelopment Plan. 22 Section 2. Application. The limitations established by this Ordinance shall apply to 25 manner required and to the extent permitted by law. the Carlsbad Village Redevelopment Project and may only be amended in the 26 Section 3. Severability of Provisions. If any provisions of this Ordinance or the 27 application thereof is held to be invalid for any reason, the remainder of this Ordinance and the application of provisions thereof shall not be affected thereby. 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 4. Reservation of Rights. It is the position of the City that the duties of county auditors to deposit funds received from redevelopment agencies in County Educational Revenue Augmentation Funds and SERAF funds are, among other things, inconsistent with the ruling of the Superior Court for Sacramento County, in California Redevelopment Association et al v. Genest et al, Case No. 34-2008-00028334-CU-WM-GDS ("CRA V. Genest'), and other applicable law, because such payment requirements violate various state and federal constitutional provisions and are therefore unlawful and unenforceable. Neither the adoption of this ordinance, nor the acknowledgment of the requirement of the Agency to pay the SERAF funds, nor the allocation of the SERAF funds shall be deemed to be, nor are they intended as, an acknowledgment of the validity of the SERAF payment requirements of AB 26, and the City reserves any rights it may have to withhold the payment of SERAF funds and/or challenge the validity of such payment requirement in any administrative or judicial proceeding. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 EFFECTIVE DATE: This ordinance shall be effective thirty days after its adoption; and the city clerk shall certify the adoption of this ordinance and cause it to be published at least once in a newspaper of general circulation in the City of Carlsbad within fifteen days after its adoption. INTRODUCED AND FIRST READ at a regular meeting of the Carlsbad City Council on the 6th day of October 2009, and thereafter PASSED AND ADOPTED at a regular meeting of the City Council of the City of Carlsbad on the day of , 2009, by the following vote, to wit: AYES: NOES: ABSENT: APPROVED AS TO FORM AND LEGALITY: RONALD R. BALL, City Attorney CLAUDE A. LEWIS, Mayor ATTEST: LORRAINE M. WOOD, City Clerk