HomeMy WebLinkAbout2011-03-08; City Council; 20478-1; AGUA HEDIONDA SEWER LIFT STATIONLAGOONFOUNDATION
All Receive-Agenda Item #.
For the Information of the:
CITY COUNCIL
Board of Directors
Greg Rubin
Chairman
Al Cerda
Vice-Chair
David Lloyd
Treasurer
Ken Alfrey
Secretory
Brian Ougan
Mike Howes
Mike Metts
Eric Munoz
Sylvia Pauloo-Taylor
Diane Richards
Jim Strickland
Staff:
Lisa Rodman
Executive Director
Terry Brown
Jill Candelaria
Katrlna Keddy
Quentin Johnston
Rebecca Carper
Dear Carlsbad City Council:3-8-11
On behalf of the board of directors of Agua Hedionda Lagoon foundation I
write to express our support of the proposed Agua Hedionda Sewer Lift station.
This construction project aimed at preventing sewage spills into Agua Hedionda
Lagoon while overhauling 2.5 miles of Carlsbad sewer pipes will certainly be a
welcome project.
We were thrilled to read in the NC Times that the Carlsbad's Planning
Commission gave its unanimous backing and we wait anxiously for the project
to move through the city pipelines.
Please feel free to contact us in assisting the city in any form of community
outreach you might deem appropriate.
Sincerely,
Lisa Rodman
Executive Director
7608041969
A California Ntm-Profit Corporation, 1580 Cannon Rosit, Carlsbad CA 92008 • 760-804-1969, wimu.aguaheiiionda.org
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RONALD W. ROUSE, PARTNER
DIRECT DIAL NUMBER 619.699.2572
DIRECT FAX NUMBER 619.235.1338
EMAIL ADDRESS rrouse@luce.com
March 7, 2011
600 West Broadway
Suite 2600
San Diego, CA 92101
619.236.1414
www.luce.com
MAR 7 2011
CITY OF CARLSBAD
CITY CLERK'S OFFICEHAND-DELIVERED
*
Mayor Hall and City Council Members
City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Re: City Council/Redevelopment Commission Agenda March 8, 2011 Item #14
(Agenda Bill #20,478)
NRG Energy, Inc. and Cabrillo Power I LLC Objections to Approval of Agua
Hedionda Sewer Lift Station and Sewer/Water Pipelines/Facilities
Dear Mayor Hall and Council Members/Commissioners:
We are special counsel to NRG Energy, Inc. and Cabrillo Power I LLC (collectively "NRG")
and submit the following objections on their behalf to the City's proposed approval of the
multiple Agua Hedionda Sewer Lift Station and associated Sewer/Water pipelines and facilities
identified in the above referenced Agenda Bill #20,478 (collectively the "Project"). Cabrillo
Power I LLC is the owner/operator of the existing Encina Power Station ("EPS") and NRG
Energy, Inc., its parent company, is processing the Carlsbad Energy Center Project ("CECP")
Application for Certification before the California Energy Commission ("Energy Commission")
on a portion of the EPS site between the railroad tracks and Interstate 5.
The original and ten copies of this letter are being filed directly with the City Clerk; we ask that
the original be incorporated into the administrative record and the copies be timely distributed to
all Council Members/Commissioners, City Attorney and City Manager. A courtesy copy has
been emailed directly to the City Attorney.
A.Overview.
The CECP is a modern, environmentally beneficial and efficient natural gas fired combined
cycle electrical generating facility that will result in the permanent shut down/replacement of
three of the five existing, older EPS generating units realizing reduction of ocean water for "once
through" cooling purposes and significant reductions in air pollutants/greenhouse gas emissions
compared to existing EPS electrical generation. The CECP is fully consistent with the long
SAN DIEGO SAN FRANCISCO Los ANGELES CARMEL VALLEY/DEL MAR ORANGE COUNTY RANCHO SANTA FE
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standing goal of the City, and NRG, for eventual retirement of the older EPS facilities west of
the railroad tracks and replacement with a physically smaller, more efficient and cleaner
generating facility between the railroad tracks and Interstate 5. The CECP is fully consistent
with and implements the State Water Resources Control Board's 316(b) Policy to phase out use
of once through ocean water cooling for electrical generation in favor of a closed loop cooling
alternative.
The City's Project facilities are proposed to be located on the EPS property and encroach into the
CECP area, which property is under the exclusive jurisdiction of the Energy Commission as part
of the CECP process. Notwithstanding the obvious CECP benefits, the City has been a zealous
opponent/participant throughout the CECP process before the Energy Commission and related
governmental agencies, reportedly having spent in excess of $1.5 Million1 in public funds to date
to oppose the CECP, yet the City completely fails to evaluate its proposed Project's significant,
adverse impacts and inconsistencies with the CECP and existing EPS operations. Further, the
City's process to date and purported reliance on a mitigated negative declaration ("MND") is not
consistent with the legal requirements of the California Environmental Quality Act ("CEQA"). It
appears the City is proposing to proceed with its Project without regard to the CECP and other
legitimate property owner rights as a continuation of the City's all out effort to block or
otherwise interfere with the CECP. We hereby incorporate by reference the record of the CECP
proceedings before the Energy Commission available at
http://www.energy.ca.gov/sitingcases/carlsbad/index.html (in particular, the documents at
http://www.energv.ca.gov/sitingcases/carlsbad/documents/index.htmD as evidence of the City's
familiarity with and active opposition to the CECP project.
B. City Failure to Provide Legally Adequate Notice to Landowner.
Under the City's own ordinances and State Planning and Zoning Law, as the landowner, NRG
was to receive actual written notice of the Planning Commission hearings and proceedings at
least ten (10) days prior to the February 2, 2011 Planning Commission hearings. (See Gov't
Code Sec 65091 and Carlsbad Municipal Code Sec. 21.54). Further under CEQA, NRG should
have received actual written notice of the City's intention to rely on a mitigated negative
declaration and was to specifically include notification of the applicable comment period and
details regarding the public hearings to consider the Project. (See CEQA guidelines Sec. 15072).
1 See attached Agenda Bill #20,216 dated April 27, 2010 stating: "Since 2008, the City of
Carlsbad has approved and funded through the City's General Fund $1.5 million to pay for costs
related to all legal and other related actions to respond to, and/or establish opposition to, the
application submitted to the California Energy Commission by NRG for a new power plant..."
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NRG believes the required notices were never provided in accordance with applicable law
because under well established California case law, due process requires that notice must be
"...reasonably calculated to afford affected persons the realistic opportunity to protect its
interests." (See Horn v. County of Ventura (1979) 24 Cal.Sd 605).
Clearly, the City has known of the impacts of its Projects on NRG for years as evidenced by the
multi-year Energy Commission CECP process started in September, 2007, the week long Energy
Commission Evidentiary Hearings February 1-4, 2010 in Carlsbad, and periodic
meetings/discussions (most recently in January, 2010) regarding the design/location of the sewer
lift station and single sewer pipeline replacement and potential incompatibility of these facilities
with the CECP. Yet, the City failed to meaningfully notify NRG of the proposed MND or the
subsequent Planning Commission hearings as required by law.
Given these circumstances, it is clear the City has failed to provide the legally required actual
written notices to NRG of the entire Project, all the while its staff was engaged in extensive
engineering, design and environmental evaluation of a range of facilities it knew would have
further significant, adverse impacts on NRG ownership and operation of the EPS and CECP.
C. City's Project Design and Engineering Incompatibilities.
The City's Project includes the design of a new lagoon utilities bridge to accommodate the future
extension of the Coastal Rail Trail along the east side of the railroad tracks through the EPS (see
Planning Commission Staff Report at p.2), a location that is well known to the City as
incompatible with the CECP and unacceptable to the Energy Commission Staff and NRG. NRG
is prepared to accommodate the Coastal Rail Trail in a location that is "mutually acceptable" to
both the City and NRG, but the proposed Coastal Rail Trail along the sewer support bridge
continuing easterly of the railroad tracks is unacceptable for reasons that have been fully vetted
through the Energy Commission proceedings.
Further, the scope of the Project as presented to the Planning Commission far exceeds anything
previously discussed with NRG. The Project is not simply a sewer lift station replacement and
sewer force main replacement, but includes several additional pipelines and facilities, including:
(1) a new "utilities bridge" over the lagoon (Note: Cabrillo Power I LLC owns fee title to the
lagoon and its dredging/maintenance is a vital part of the EPS operations); (2) leaving the old 42
inch sewer line in place south of the lift station as a "parallel" line to the new force main; (3) new
54 inch sewer line north and south of the lift station; (4) a new pressurized 12 inch recycled
water line from Encina Wastewater Treatment Facility ("EWTF") through the EPS even while
the City claims recycled water is not available for CECP; (5) a new 6 inch potable water line
through EPS; (6) a possible relocation of SDG&E natural gas line; and (7) substantially widening
the existing limited 17.5 foot wide easement to 30 feet wide to accommodate the additional
facilities.
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The following list is intended to illustrate some of the unresolved issues regarding the ultimate
design, engineering, construction timing, operational constraints and scope of the Project.
Without definitive answers to these questions, the Project's actual environmental and EPS/CECP
project impacts cannot be realistically evaluated. The Project, as proposed, lacks adequate
details and specifics to support CEQA and Energy Commission CECP compatibility analysis.
1. Contrary to the details previously discussed with NRG, the Project is much more extensive,
wider and involves multiple pipelines in the CECP area, representing much greater impacts to
the CECP.
2. Proposed alignment of Coastal Rail Trail easterly of railroad tracks across the CECP area is
not acceptable to NRG nor to Energy Commission Staff; the projected alignment is inconsistent
with prior discussions/schematics prepared by City to avoid CECP/EPS operational interference.
3. City Project does not accommodate joint use of surface area for CECP heavy haul, surface
access and ongoing power plant operations during CECP construction and subsequent operations
of EPS/CECP.
4. City Project footprint conflicts with "construction lay down areas" long planned for CECP,
new natural gas transmission line service extension to CECP and the existing and proposed storm
water management facilities.
5. City has failed to indicate where its Project electrical power supply will be located and
possible interference of Project electrical service with EPS/CECP construction/operation.
6. Project proposes significant new, additional pipelines in an existing "utility congested
area", including the existing sewer line, SDG&E gas transmission line, overhead electrical lines,
Poseidon desalination product water lines, railroad right of way and SDG&E substation facilities.
7. Project design fails to identify construction lay down areas for lift station/pipelines and
access routes, both temporary (during construction) and permanent.
8. Project construction scheduling is unclear and potentially will interfere with other
construction projects, including CECP, Poseidon desalination and adjacent SDG&E electrical
distribution facilities and easements.
9. No provision is made for the vacation of the current lift station/single sewer pipeline
easement presently vested in Vista Sanitation District and City of Carlsbad.
10. City Project removes existing mature vegetation/trees visual impact mitigation for
CECP/EPS.
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D. The Proposed MND is Inadequate, Incomplete and Insufficient to Comply with the
Requirements of CEQA.
1. EIR Required. The City's reliance on a mitigated negative declaration for CEQA
compliance is unsupportable. CEQA requires preparation of an environmental impact report
("EIR") whenever there is a "fair argument" that a project may have a significant unmitigated
effect on the environment. (CEQA Guideline, § 15064(f)(l).) As set forth below, there is a "fair
argument" that the Project will have significant environmental impacts. Even if that were not the
case, the MND is inadequate in that it fails to fully analyze all of the Project's potentially
significant environmental impacts and also relies on mitigation measures that will not avoid the
identified significant environmental impacts. Therefore, there is a reasonable probability that
implementation of this Project will have significant unmitigable adverse impacts on the
environment. An EIR must be prepared to more fully analyze and disclose the Project's
environmental impacts.
2. Project Description/Project Splitting. The Coastal Rail Trail alignment needs to be
analyzed as part of the project description in an EIR. CEQA defines a "project" to include the
"whole of an action" that may result in a direct or reasonably foreseeable indirect impact on the
environment. (CEQA Guidelines, § 15378(a); Save Tara v. City of West Hollywood (2008) 45
Cal^* 116, 139 [CEQA review required before agency, as a practical matter, may commit itself
to any feature of a project].) The City is careful not to call the Coastal Rail Trail alignment part
of the "Project" saying that the Project will only accommodate "a future pedestrian trail."
However, the City has made clear though its participation in Energy Commission and related
proceedings that it intends to locate the Coastal Rail Trail east of the railroad tracks, even though
the Energy Commission Staff determined that such location is inappropriate and potentially
hazardous to the public safety. Nevertheless, the City notes that constructing the Coastal Rail
Trail as part of this Project will implement the South Carlsbad Coastal Redevelopment Plan
("SCCRP") goal of "developing new beach and coastal recreational opportunities." (Staff
Report, pp. 2, 8-9.) Under the circumstances, it is reasonably foreseeable that with approval of
this Project, the City will seek to make this the east side of the tracks the actual location of the
rail trail. Therefore, the failure to analyze the Coastal Rail Trail as an element of the Project
constitutes "project splitting" in violation of CEQA. An EIR needs to be prepared that analyzes,
among other things, the environmental impacts of having the public pass upon the trail route
(e.g., trampling on nearby sensitive vegetation, littering into the lagoon, safety risks associated
with people passing nearby the power plant, etc...).
The MND also notes that "overhead electrical distribution facilities will be relocated as needed"
as part of the Project. (MND, p. 17.) Yet, there is no analysis of which overhead facilities might
be relocated, where or how these facilities might be relocated or the environmental impacts
associated with that possible relocation. Lastly, the MND states that the sewer support bridge
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will not require any work to occur within the 100-year flood elevation. The bridge construction
methodology, however, is not described and there is no other evidence supporting the City's
claim that a bridge can be constructed over the lagoon without impacting sensitive lagoon
resources. Similarly, the MND does not describe how the existing bridge can be removed
without impacting the lagoon environment itself. All of these issues need to be further described
and analyzed in an EIR.
3. Environmental Setting—Surrounding Land Uses. The MND does not adequately
describe the surrounding land uses, in particular the Project's proximity to the EPS and the
potential conflicts between the construction and operation of the Project, operation of the EPS
and proposed construction and operation of the CECP. For example, the MND acknowledges
that substantial grading/construction activities will occur on property owned by Cabrillo Power I
LLC in connection with the sewer lift station, but there is no discussion of how to coordinate that
construction with CECP construction, the risks of having Costal Rail Trail users in close
proximity to EPS/CECP facilities, how the Project may impact NRG's use of the Project site as a
heavy haul road, the risk of foundation failures created by placing new pipelines adjacent to
existing electrical buildings and related construction injury risks. The MND does not fully
disclose that substantially expanded easements will be required over EPS/CECP Property. (See
also, Section C. above for more details regarding the design/construction incompatibilities.)
4. Aesthetics. MND fails to substantiate how removal of 12 mature eucalyptus trees for the
new lift station will have a less than significant impact on views and no mitigation measures are
identified to replace the mature trees. With no analysis of this issue, there certainly is a fair
argument that removing these trees will have a substantial impact on aesthetics.
5. Air Quality. There are substantial problems with the Project's air quality analysis,
including:
• Export. The MND discloses that 77,000 cubic yards of soil/gravel will be graded
or trenched and 31,000 cubic yards will be exported to an "acceptable offsite
location", assumed to be 30 miles away. The MND fails, however, to substantiate
these assumptions which are key to the MND's conclusions. A revised CEQA
document must be prepared identifying where the export likely is to be taken and
the associated traffic/pollution impacts of the export hauling. The MND also fails
to analyze the export soil's condition and discuss measures that will be
implemented to ensure the export will be free of any hazardous materials. In the
absence of these details, a fair argument exists that the Project will have
significant air quality and perhaps hazardous materials impacts.
• Ozone. The San Diego Air Basin is in a Federal and State non-attainment area for
the 8-hour ozone (O3) standard, yet there is no analysis of the City Project's
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ozone contributions and impacts. (MND, pp. 35, 37.) One of the key precursors
to the formation of ozone is NOx. As shown on Table 2 of the MND, the City
Project will exceed the San Diego County APCD's threshold emission limit of
significance for CEQA analysis of 250 pounds/day of NOx emissions (Project
related construction emission of NOx are shown as 254.46 pounds/day and Table
2 of the MND notes this is a significant impact). As the San Diego Air Basin is in
Federal and State non-attainment zones for the 8-hour ozone standard, and as
NOx is one of the precursors for ozone, the Project will have a significant impact
related to ozone generation. Additionally, the Project's emission of NOx and
ROG all contribute to ozone formation in an ozone non-attainment area (the U.S.
Environmental Protection Agency and California Air Resources Board define
NOx and ROG as ozone precursors). An EIR disclosing and analyzing these
ozone related impacts needs to be prepared before the Project can be approved.
The MND's analysis of cumulative ozone impacts is also flawed. The MND
concludes the Project will not have a significant cumulative impact because the
Project has only a "marginal temporary increase in NOx... air quality would be
essentially the same whether or not the proposed project is implemented." CEQA
does not permit unsubstantiated reliance on such a "de minimus" finding. Instead,
a new CEQA document must be prepared that includes an actual and specific
analysis of cumulative air quality impacts. Further, the MND fails to provide
substantive facts to substantiate its "de minimus" conclusion.
Mitigation Measure AQ-1. The MND states incorrectly that the Project's
significant emission of NOx can be mitigated with the inclusion of Mitigation
Measure AQ-1. This mitigation measure requires observance of manufacturer's
specifications for the proper maintenance of construction equipment and
reduction in idling time. The MND fails to recognize that compliance with these
practices is already assumed in the APCD's determination of emissions for
construction activities. However, observance of construction equipment
specifications is standard practice and are not capable of reducing the Project's
NOx emissions below the APCD's significance threshold resulting in
cummulative contribution to the continuing unmitigated exceedance of Federal
and State 8-hour ozone standards. Accordingly, implementation of Mitigation
Measure AQ-1 cannot be relied upon to reduce the emissions of NOx to less than
significance.
Sensitive Receptors. The MND analysis fails to acknowledge that the adjacent
YMCA aquatic recreation area and Coastal Rail Trail may place sensitive
receptors in close proximity to the Project (MND, pp. 37-38.) In the absence of
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this analysis, a fair argument exists that approval of the Project would have an
adverse impact on the environment.
• Odors. Air scrubbers and carbon filters are relied upon to control odors.
Maintenance of these features should be required as a mitigation measure and
included in the MMRP. (MND, p. 38.) Further, there is no evidence
demonstrating that air scrubbers and carbon filters will effectively control noxious
odors created by the Project.
6. Cultural Resources. Mitigation CUL-1 states "if significant resources are encountered,
appropriate mitigation measures must be developed and implemented." This unlawfully defers
development of adequate mitigation measures, which is particularly troubling here because at
least two archeological sites are known to exist near the Project site. (MND, p. 51.) In the
absence of adequate mitigation measures, approval of the Project does not avoid significant
environmental impacts and therefore an MND is inappropriate.
7. Geology.
• The MND fails to analyze the potential adverse impacts to the adjacent planned
uses, such as the CECP. In particular, there should be an analysis of the depth
and strength of the pipeline construction and measures ensuring that construction
and operation of pipelines will interfere with planned surface heavy haul and
EPS/CECP operations.
• The MND fails to analyze the potential adverse impacts to the existing facilities.
For example, the Project proposes to construct new pipelines adjacent to existing
electrical buildings, which presents a potential risk of foundation failures. The
safety risk of installing pipelines adjacent to and crossing under the existing high
voltage wires should also be analyzed.
8. Greenhouse Passes. The threshold of significance relied on in the MND is vague as it
does not indicate what level of emissions might result in a direct or indirect significant impact.
The analysis also fails to "make a good faith effort, based to the extent possible on scientific and
factual data, to describe, calculate or estimate the amount of greenhouse emissions resulting from
[the] project" as required by CEQA Guidelines section 150644(a). The City did not even attempt
to engage in the qualitative or quantitative analysis required by the CEQA Guidelines. Instead,
the MND concludes simply that emissions will be relatively minor and incrementally
insignificant. CEQA does not permit the City to conclude that the Project will not have a
significant environmental impact simply because its contribution will be "small" or "de
minimus". (Communities for a Better Env't v. California Resources Agency (2002) 103
* 98, 126.) The MND provides no evidence, let alone substantial evidence, to
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demonstrate that the Project will not have a significant impact on greenhouse gas emissions. As
such, it fails to meet the requirements of CEQA. The critically important issue of greenhouse
gas emissions needs to be fully analyzed in an EIR.
9. Hazards.
• The MND fails to analyze the impacts resulting from a potential failure/collapse
of the new single span bridge carrying sewer and other utility lines over the
lagoon or the impacts of potential lift station/pipeline leaks.
• The MND fails to analyze the potential adverse impacts to the existing facilities,
such as the safety risk of installing pipelines adjacent to and crossing the existing
high voltage wires or having pedestrians along the Coastal Rail Trail in close
proximity to the EPS/CECP.
10. Hydrology/Water Quality. The MND fails to identify measures that will be implemented
to reduce or eliminate the possibility of a sewer spill into the adjacent wetlands or lagoon.
Instead, the MND defers development of such measures until the construction phase. (MND, p.
66.) It is reasonably foreseeable that replacement of the existing sewer line could result in a spill
which would damage sensitive environmental resources. As such, development of mitigation
measures to prevent such a spill, and to prevent damage in the event of a spill, needs to be
developed and publicly vetted as part of an EIR for the Project.
11. Recreation. There is no analysis of the physical impacts associated with having people
use the coastal rail trail (see above) and bringing public recreation users within the perimeter of
the power plant and lagoon. As discussed above, such an analysis is required under CEQA.
12. Cumulative Impacts. The cumulative impact analysis is conclusory and wholly
inadequate. The MND identifies a list of cumulative projects and then concludes its analysis by
stating:
"It would be expected however, that environmental impacts associated with these
development projects, plus the massive sewer CIP, could be mitigated to level that
would be less than significant by means of mitigation measures similar in content
to those identified in this Environmental Initial Study."
There is no specific analysis of any cumulative impacts nor evidence in the record that supports
this conclusion in the MND. In particular, the MND fails with respect to the following:
• Aesthetics: There is no analysis of 1-5 widening on aesthetics. The MND
acknowledges that the bridge and lift station will be observable from 1-5, but from
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a distance of 1,600 feet away will not significantly contribute to a coastal view
obstruction. The MND does not contain any substantive analysis of cumulative
impacts on aesthetics from removal of the 12 trees and fails to take into account
the proposed CECP project altogether.
• Air Quality. As discussed above, there is no specific cumulative air quality
analysis considering cumulative ozone and other pollutant impacts, 1-5 widening,
and the CECP project.
• Greenhouse Gas Emissions. The MND fails to even attempt a cumulative
greenhouse gas emissions analysis because emissions are not analyzed in the
relevant general plans. CEQA requires the City to perform a good faith analysis
of the cumulative impacts.
• Recreation. The MND fails to analyze the cumulative impact associated with
other segments of the rail trail.
• CECP Power Plant Project. The MND acknowledges that "other [cumulative]
impacts could result from the NRG Power Plant expansion project inasmuch as
that project has not yet been specifically defined." Indeed, the CECP project has
been specifically defined and a comprehensive environmental analysis that
complies with CEQA has been performed by the California Energy Commission
as required by the Warren-Alquist Act. This environmental analysis is set forth in
the Energy Commission Preliminary and Final Staff Assessment which the City
has actively and aggressively challenged. (See MND, p. 98). Therefore, it is
disingenuous and factually inaccurate for the City to say that the NRG Power
Plant project has "not been specifically defined." The September, 2007 filing of
the CECP Application for Certification makes the CECP a "reasonably
foreseeable" project and requires the City to treat the CECP as a reasonably
foreseeable project for purposes of analyzing cumulative impacts as part of the
CEQA analysis. (See also Section B. above for the City's full awareness of all
CECP details as evidenced by the City's involvement in the Energy Commission
multi-year certification process.)
As detailed above, the MND fails to comply with CEQA as it does not provide an adequate
analysis of the Project's significant environmental impact and does not adequately mitigate the
Project's significant environmental impacts. Moreover, an EIR, rather than a MND, must be
prepared and certified before the Project can be approved by the City because there is a fair
argument that the Project will have significant adverse environmental impacts.
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E. Conclusion.
For all the reasons set forth above, the City's adoption of the Project is not legally supportable.
The MND is inadequate under CEQA, and in fact, a full EIR is required to fairly analyze the
significant environmental impacts of the Project, particularly when a realistic evaluation of
adjacent "reasonably foreseeable" projects, including CECP, is included.
The proposed City Project is far more extensive -than the Sewer Lift Station/Force Main
replacement previously discussed. The easement widening and additional pipeline/facilities
directly and adversely affect the EPS/CECP. Notwithstanding the multi-year Energy
Commission proceedings, the City failed to give meaningful, timely notice of the full scope of its
Project to the landowner most directly impacted.
Respectfully, NRG objects to certification of the MND and approval of the Project as presented
until the significant outstanding issues are fully addressed and legally resolved.
Ronald W. Rouse
of
LUCE, FORWARD, HAMILTON & SCRIPPS LLP
RWR/lb
101454346.4
HOUSING AND REDEVELOPMENT COMMISSION
AND CITY COUNCIL
JOINT AGENDA BILL
AB#
MTG.
DEPT.
_2fL21fL
4/27/10
HNS
Appropriation of Funding for 2009-10
SERAF Payment by the Carlsbad
Redevelopment Agency, and
Acceptance of Loan from City to
Agency for South Carlsbad Coastal
Redevelopment Plan Implementation
DEPT. DIRECTO
CITY ATTORNEY
CITY MANAGER
RECOMMENDED ACTION:
1. Housing and Redevelopment Commission adopt Resolution No. 485 authorizing the
Finance Director to appropriate $1,350,538 and make a payment from the Village Project
Area of the Redevelopment Agency's Debt Service Fund to the County of San Diego
(County) for the 2009-10 Supplemental Education Revenue Augmentation Fund (SERAF)
as mandated by the State of California, and subject to final disposition of the lawsuit
challenging said mandated SERAF payment.
2. Housing and Redevelopment Commission Resolution No. 486 accepting a loan in
the amount of one million five hundred thousand dollars ($1.5 million) for funds
advanced by the City of Carlsbad to the Carlsbad Redevelopment Agency (South Coastal
Carlsbad area) to initially and subsequently pay for costs related to all legal and other
related actions to respond to, and establish opposition to, the application submitted to the
California Energy Commission by Cabrillo Power for a new power plant on property
located within the South Carlsbad Coastal Redevelopment Plan Area.
3. City Council Resolution No.2010-097 _authorizing the Finance Director to
make an advance from the General Fund to the South Coastal Carlsbad Project Area of
the Carlsbad Redevelopment Agency (SCCRA) in the amount of one million five hundred
thousand dollars ($1.5 million) to initially and subsequently pay for costs related to all
legal and other related actions to respond to, and establish opposition to, the application
submitted to the California Energy Commission by Cabrillo Power for a new power plant
on property located within the South Carlsbad Coastal Redevelopment Plan Area.
ITEM EXPLANATION:
ERAF Payment
The State of California has legislatively established the Supplemental Educational Revenue
Augmentation (SERAF) Fund and is requiring the Carlsbad Redevelopment Agency, together
DEPARTMENT CONTACT: Debbie Fountain 760-434-2935 debbie.fountain@carlsbadca.gov
FOR CITY CLERKS USE ONLY.
COMMISSION ACTION: APPROVED
DENIED
CONTINUED
WITHDRAWN
AMENDED
D
D
D
CONTINUED TO DATE SPECIFIC D
CONTINUED TO DATE UNKNOWN D
RETURNED TO STAFF D
OTHER - SEE MINUTES D
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with other redevelopment agencies, to deposit payments into this fund for Fiscal Years 2009-
10 and 2010-11. This fund is a tool used by the State to reallocate property taxes away from
redevelopment agencies and into the schools so that the State is not required to fund as
much to the schools. For Carlsbad, the payment amount for 2009-10 is $1,350,538 and for
2010-11 is $277,781. The payment for this year must be made no later than May 10, 2010.
In April 2009, a Sacramento County Superior Court ruled that State raids of redevelopment
funds are unconstitutional, invalidating a 2008 state budget bill to take $350 million in
statewide redevelopment funds. Despite this court ruling, the State again approved a budget
bill (ABX4-26) as part of the 2009 State budget which authorizes a $2.05 billion raid of
redevelopment funds. In October, 2009, the California Redevelopment Association (CRA)
filed another lawsuit together with two member agencies challenging this action by the State.
A court decision is pending. CRA attorneys have advised redevelopment agencies to
withhold payments until such time as a court decision is made on the lawsuit. If CRA does
not prevail, the SERAF payment will need to be made to the County by May 10, 2010.
Staff is recommending that the Housing and Redevelopment Commission approve the
appropriation of funding for said SERAF payment for 2009-10 and authorize the Finance
Director to make said payment if the legal challenge is not successful. The payment will not
be forwarded to the County prior to May 10, 2010. If the court finds that the payment is
unconstitutional and should not be made to the State, the payment will not be forwarded to
the County.
SCCRA Funding/Loan
In September of 1997, the City of Carlsbad began to identify options for action to eliminate or
reduce the environmental impacts/blight of the existing Encina Power Plant and to achieve
more compatible land uses along its coastline. At that time, the existing power plant, which
began operation in 1954, was deemed to be obsolete due to its outdated, inefficient
technology and more stringent Air Pollution Control District air emission standards. In
addition, the utility/industrial land use represented by the power plant and related facilities
was (and is) no longer considered the best use for this beautiful coastal property. As a result
of research on the issues surrounding the existing power plant and related land uses and
facilities, the City decided to form a redevelopment area known as the South Carlsbad
Coastal Redevelopment Area (SCCRA), the boundaries for which include the power plant
property.
In July of 2000, the Redevelopment Plan (Plan) for the SCCRA was adopted. One of the
goals of the Plan was to convert the utility/industrial land west of the railroad tracks (site of
existing power plant) to another more appropriate land use that would 1) provide greater
benefit to the community, 2) would eliminate the possibility of an intensification of
utility/industrial applications at the site, and 3) enhance coastal access. A land use analysis
indicates that a power plant on coastal property is not necessary and/or not appropriate for
redevelopment purposes, and that an alternate land use strategy is needed for the area to
eliminate the blighting conditions and provide additional community benefit.
In September 2007, NRG submitted an application to the California Energy Commission to
build a new power plant on the existing power plant property with no guarantees that the
existing power plant would be decommissioned and demolished anytime soon. The proposed
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project is not supported by the Carlsbad Redevelopment Agency because it will not eliminate
the existing blighting conditions (for existing plant) and new blighting conditions will be
created with the new project.
Through the Carlsbad Redevelopment Agency, the Housing and Redevelopment
Commission serves as an administrative arm of the State to promote important State policies
relating to the elimination of blight, providing jobs, and developing affordable housing. The
Commission has previously found that the existing power plant creates blighting conditions in
the community through its noxious emissions, 400-foot stack looming over residential areas,
parks, and beaches, and use of hazardous materials on the property. It is the statutory duty
of the Commission to ensure that those blighting conditions are eliminated through its
enforcement of the redevelopment plan, and that new blighting conditions are not
created/established as a result of new projects such as the proposed power plant.
Since 2008, the City of Carlsbad has approved and funded through the City's General Fund
$1.5 million to pay for costs related to all legal and other related actions to respond to, and/or
establish opposition to, the application submitted to the California Energy Commission by
NRG for a new power plant on property located within the SCCRA. To prevent additional
blighting conditions and to encourage the elimination of existing blight within the SCCRA,
these costs are necessary to implement the related redevelopment plan and are consistent
with the five year implementation plan adopted for the SCCRA in 2005. Since the SCCRA
does not yet have adequate tax increment to pay for said costs, the Commission is
requesting that the initial $1.5 million funded by the General Fund (which includes costs
incurred to date) be considered a loan from the City to cover said costs until such time as the
Agency may receive adequate tax increment funds to repay said loan. This loan shall
constitute ah indebtedness of the Housing and Redevelopment Commission and shall be
repaid according to the Cooperation, Reimbursement and Repayment Agreement between
the Council and Commission last amended in July 2009.
Staff is recommending that the City Council approve the loan to the Housing and
Redevelopment Commission (SCCRA project area) in the total amount of $1.5 million and
that the Commission accept said loan, for the funds advanced to pay the costs related to the
legal and other related actions to respond to, and/or establish a defense against, the
proposed new power plant within the SCCRA. This loan shall become a debt of the SCCRA.
FISCAL IMPACT:
The SERAF payment from the Carlsbad Redevelopment Agency is $ 1,350,538 for Fiscal
Year 2009-10. The payment will be paid from the Redevelopment Agency's Debt Service
Fund to the County of San Diego as mandated by the State of California, and subject to final
disposition of the lawsuit challenging said payment. The Agency has adequate non-housing
funds available to make said SERAF payment. There will be no impact on the City's General
Fund.
To date, a total of $1.5 million in funds have been incurred by the City Council on behalf of
the Housing and Redevelopment Commission to pay for costs related to implementation of
the SCCRA Plan for all legal and other related actions to respond to, and/or establish
opposition to, the application submitted by NRG to the California Energy Commission for a
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new power plant within the SCCRA. Since there are inadequate tax increment funds
generated within the SCCRA to cover said costs at this time, the Commission has requested
that the funds be provided in the form of a loan from the City Council to be repaid at a later
date by the Commission according to the Cooperation, Reimbursement and Repayment
Agreement approved for redevelopment implementation efforts in both the Village and
SCCRA. The loan shall become an indebtedness of the SCCRA.
ENVIRONMENTAL IMPACT:
The actions set forth above do not qualify as a "project" under the California Environmental
Quality Act (CEQA) per State CEQA Guidelines Section 15378 in that they do not have the
potential to result in a direct or reasonable foreseeable indirect adverse physical impact on
the environment.
EXHIBITS:
1. Housing and Redevelopment Commission adopt Resolution No. 485 authorizing the
Finance Director to appropriate $ 1,350,538 and make a payment from the Village Project
Area of Redevelopment Agency's Debt Service Fund to the County of San Diego for the
2009-10 Supplemental Education Revenue Augmentation Fund (SERAF) as mandated by
the State of California, and subject to final disposition of the lawsuit challenging said
mandated SERAF payment.
2. Housing and Redevelopment Commission Resolution No. 486 accepting a loan in
the amount of $1.5 million for funds advanced by the City of Carlsbad to the Carlsbad
Redevelopment Agency (South Coastal Carlsbad Project Area) to initially and
subsequently pay for costs related to all legal and other related actions to respond to, and
establish opposition to, the application submitted to the California Energy Commission by
Cabrillo Power for a new power plant on property located within the SCCRA.
3. City Council Resolution No. 2010-097 authorizing the Finance Director to
make an advance from the General Fund to the South Coastal Carlsbad Project Area of
the Carlsbad Redevelopment Agency (SCCRA) in the amount of one million five hundred
thousand dollars ($1.5 million) to initially and subsequently pay for costs related to all
legal and other related actions to respond to, and establish opposition to, the application
submitted to the California Energy Commission by Cabrillo Power for a new power plant
on property located within the SCCRA.
4. Correspondence from State Department of Finance regarding required SERAF payment
for Fiscal Year 2009-10.
x l/u!.
1 RESOLUTION NO. 485
2 A RESOLUTION OF THE HOUSING AND
REDEVELOPMENT COMMISSION OF THE CITY OF
3 CARLSBAD, CALIFORNIA, AUTHORIZING 2009-10
4 PAYMENT TO THE SERAF FUNDS AS DIRECTED BY
THE STATE OF CALIFORNIA AND APPROPRIATING SAID
5 FUNDS
6 WHEREAS, the State of California adopted legislation as part of its 2009 budget
7 requiring the Carlsbad Redevelopment Agency to deposit payments into the
8 Supplemental Educational Revenue Augmentation Fund (SERAF); and
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WHEREAS, the adopted legislation requires redevelopment agencies to shift
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property tax revenues to the State for funding of K-12 schools and community colleges
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during the 2009-10 and 2010-11 fiscal years; and
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WHEREAS, in accordance with this legislation, the Carlsbad Redevelopment
Agency must make a payment of $1,350,538 in 2009-10 to the SERAF, unless a court
finds that the payment required by the State of California is unconstitutional and/or not
16 otherwise required to be made; and
17 WHEREAS, said payment as determined by the State Director of Finance must
18 be made to the County of San Diego Auditor for deposit into the SERAF on or before
19 May 10, 2010, unless the legal challenge noted above is successful.
20 NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
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Commission of the City of Carlsbad, California, as follows:
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1. That the above recitations are true and correct.23
24 2. That the Finance Director is authorized to appropriate $1,350,538 from the
25 Village Project Area of the Redevelopment Agency's Debt Service Fund to
26 the County of San Diego for the 2009-10 Supplemental Education Revenue
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1 Augmentation Fund (SERAF) as mandated by the State of California, and
2 subject to final disposition of the lawsuit challenging said mandated payment.
3. That the Finance Director is instructed to make no payment prior to May 10,
4 2010 in the event that a decision on the lawsuit challenging said payment is
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made prior to that time.
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4. If the court finds that the payment is unconstitutional and should not be made
g to the State, then the Finance Director is authorized to withhold payment until
9 further notice.
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1 PASSED, APPROVED AND ADOPTED at a Special Meeting of the Housing and
2 Redevelopment Commission of the City of Carlsbad on the 27th day of April, 2010, by
3 the following vote, to wit:
4
AYES: Commissioners Kulchin, Hall, Packard, Blackburn
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NOES: None
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ABSENT: Commissioner Lewis8
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11 __:LAUDE A. Lft&j6, CHAIRMAN
12 Ann J. KulchinVvice-Chair
13 ATTEST:
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16 brSA HILDABRAND, SECRETARY
(SEAL)
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18 -»•••>-r |/ESTABLISHED^::
19 1|\ 1970 )]'
"''. *.'*•-. .••* .
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1 RESOLUTION NO. 486
2 A RESOLUTION OF THE HOUSING AND
REDEVELOPMENT COMMISSION OF THE CITY OF
3 CARLSBAD, CALIFORNIA, ACCEPTING A LOAN FROM
THE CITY COUNCIL IN THE AMOUNT OF $1.5 MILLION
FOR FUNDS ADVANCED FOR IMPLEMENTATION OF
5 THE SCCRA PLAN RELATED TO ALL LEGAL COSTS AND
OTHER RELATED ACTIONS TO RESPOND TO, AND
6 ESTABLISH OPPOSITION TO, THE APPLICATION
SUBMITTED TO THE CALIFORNIA ENERGY
7 COMMISSION FOR A NEW POWER PLANT ON
PROPERTY WITHIN THE SCCRA.
8
WHEREAS, in 2007, NRG submitted an application to the California Energy
10 Commission to build a new power plant on the existing power plant property with no
11 guarantees that the existing power plant would be decommissioned and demolished;
12 and
13 WHEREAS, the site of the new proposed as well as the existing power plant is
14 located on property within the boundaries of the South Carlsbad Coastal
Redevelopment Area (SCCRA); and
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WHEREAS, the proposed new power plant is not supported by the Housing and
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Redevelopment Commission because it will not eliminate the existing blighting
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conditions (for the existing plant) and new blighting conditions will be created if the
20 proposed plant is constructed on said site; and
21 WHEREAS, the initial and subsequent legal and other related costs to respond
22 to, and/or establish a defense against, the application submitted by NRG to the
23 California Energy Commission for said new power plant shall be paid for by the
24 Carlsbad Redevelopment Agency with funds loaned to said Agency from the City of
25 Carlsbad pursuant to a Cooperative Agreement approved by the Council and
26 Commission on August 7, 2001; and
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1 WHEREAS, implementation activities by the Carlsbad Redevelopment Agency to
2 eliminate blight and blighting conditions as related to the power plant property and to
3 participate in future redevelopment of said site are consistent with the SCCRA Five-
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Year Implementation Plan approved by the Housing and Redevelopment Commission in
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2005;
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WHEREAS, the City Council has approved advances to the Carlsbad
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Redevelopment Agency to cover said costs for said opposition to the application for the
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9 subject power plant project, and desires to provide these advanced funds in the form of
10 a loan to the Housing and Redevelopment Commission which shall become a debt of
11 the Carlsbad Redevelopment Agency for implementation of the SCCRA Plan.
12 NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
13 Commission of the City of Carlsbad, California, as follows:
14 1. That the above recitations are true and correct.
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2. That the Finance Director is authorized to accept a loan from the City Council
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in the amount of $1.5 million on behalf of the Carlsbad Redevelopment
Agency for fund advances and other approved appropriations for initial and
lo
19 subsequent costs related to implementation activities within the South
20 Carlsbad Coastal Redevelopment Area related to the opposition to the
21 application submitted to the California Energy Commission for a new power
22 plant on property within the South Carlsbad Coastal Redevelopment Area.
23 3. That the Finance Director is authorized to advance said funds for the noted
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costs related to the defense against the proposed power plant project.
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4. That said loan from the City Council to the Housing and Redevelopment
Commission for said implementation costs for the South Carlsbad Coastal
Redevelopment Area shall constitute an indebtedness of the Housing and
4 Redevelopment Commission and shall be repaid according to the terms of the
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Cooperative Agreement approved by the Council and Commission on August
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7,2001.
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1 PASSED, APPROVED AND ADOPTED at a Special Meeting of the Housing and
2 Redevelopment Commission of the City of Carlsbad on the 27th day of April, 2010, by
3 the following vote, to wit:
4
AYES: Commissioners Kulchin, Hall, Packard, Blackburn
6
NOES: None
7
ABSENT: Commissioner Lewis8
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CLAUDE A. igfafiS, CHAIRMAN
12 Ann J. Kulchm, Vice-Chair
13 ATTEST:
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16 LISA HILDABRAND, SECRETARY
(SEAL)
17"
18 /£/ESTM5USHEDY%r-
= si ''•%'-19 -"• 1970 :o'••' •* Q. ••. / * *
***•" <*^
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1 RESOLUTION NO. 2010-097
2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CARLSBAD, CALIFORNIA, AUTHORIZING A LOAN FROM
3 THE CITY COUNCIL TO THE HOUSING AND
. REDEVELOPMENT COMMISSION IN THE AMOUNT OF
$1.5 MILLION TO COVER FUNDS FOR
5 IMPLEMENTATION OF THE SCCRA PLAN RELATED TO
ALL LEGAL COSTS AND OTHER RELATED ACTIONS TO
6 RESPOND TO, AND ESTABLISH OPPOSITION TO, THE
APPLICATION SUBMITTED TO THE CALIFORNIA
7 ENERGY COMMISSION FOR A NEW POWER PLANT ON
PROPERTY WITHIN THE SCCRA.
8
9 WHEREAS, in 2007 NRG submitted an application to the California Energy
10 Commission to build a new power plant on the existing power plant property with no
11 guarantees that the existing power plant would be decommissioned and demolished;
12 and
13 WHEREAS, the site of the new proposed as well as the existing power plant is
located on property within the boundaries of the South Carlsbad Coastal
Redevelopment Area (SCCRA); and
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WHEREAS, the proposed new power plant is not supported by the City Council
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or the Housing and Redevelopment Commission because it will not eliminate the
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existing blighting conditions (for the existing plant) and new blighting conditions will be
2Q created if the proposed plant is constructed on said site, and said site is no longer
21 appropriate for this heavy industrial use; and
22 WHEREAS, the initial and subsequent legal and other related costs to respond
23 to, and/or establish opposition to, the application submitted by NRG to the California
^ A
Energy Commission for said new power plant shall be paid for by the Carlsbad
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Redevelopment Agency with funds loaned to said Agency from the City of Carlsbad
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pursuant to a Cooperative Agreement approved by the Council and Commission on
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August?, 2001; and
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PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the
Carlsbad City Council and Carlsbad Housing and Redevelopment Commission, held on
the 27th day of April, 2010, by the following vote to wit:
AYES:
NOES:
ABSENT:
Council Members Kulchin, Hall, Packard, Blackburn
None
Mayor Lewis
CLAUDE A LV&WIS, Mayor
Ann J. Kulchin, Mayor Pro-Tern
ATTEST:
LORR^NE
(SEAL)
Karen R. Kundtz, Assistant City Clerk
EXHIBIT 4
ARNOLD SCHWARZENEGGER, GOVERNOR
_ »TATC CAPITOL • ROOM l i 49 • BABBAMEMTO DA • QBB 1 «--«OBB • www.DOF.CA.aavOFFICE OF THE DIRECTOR
November 13, 2009
TO ALL COUNTY AUDITORS, REDEVELOPMENT AGENCIES, AND THEIR LEGISLATIVE
BODIES:
Chapter 21, Statutes of 2009, requires redevelopment agencies to shift $1.7 billion in property
tax revenues to K-12 schools during the 2009-10 fiscal year via the Supplemental Educational
Revenue Augmentation Funds (SERAF) that the phapter created in each county. The Director
of Finance is required to determine the amount ea^ch redevelopment agency shall transfer to the
SERAF, and is further required to notify each redevelopment agency and legislative body of
those amounts.
In accordance with the above requirements, the attached document provides the amount
determined for your redevelopment agency.
Each redevelopment agency must allocate the specified amount to the county auditor-controller
for deposit into the SERAF on or before May 10, 2010. By March 1, 2010 the legislative body
shall either report to the county auditor-controller how the redevelopment agency intends to fund
its SERAF obligation, or report that the legislative body intends to fund the SERAF obligation on
behalf of the redevelopment agency pursuant to Section 33692 of the Health and Safety Code
(HS.C).
If a redevelopment agency determines that it will not be able to allocate to the SERAF the full
amount required, it may enter into an agreement with its legislative body by February 15, 2010,
for the legislative body to fund either the full SERAF obligation, or a portion thereof.
Alternatively, pursuant to HSC Section 33690 (c), a redevelopment agency that makes a finding
that insufficient monies are available to fund its SERAF obligation may borrow from monies
contained in its Low and Moderate Income Housing Fund. Redevelopment agencies also may
borrow from the amount otherwise required to be remitted in 2009-1 0 to its Low and Moderate
Income Housing Fund. All borrowed funds must be fully repaid by June 30, 201 5.
If you have any questions regarding this matter, please contact Chris Hill, Principal Program
Budget Analyst, at (916) 322-2263.
MICHAEL C. GENEST
Director
By:
ANA MATOSANTOS
Chief Deputy Director
Attachment
Redevelopment Agency Name
2009-10 Redevelopment Agency SERAF Shift
Health and Safety Code Section 33690
2006-07 Tax
Increment Net
of Pass-
_.J3?15*!!flft!l
2006-07 Gross
Tax Increment
850,000,000 on
Net Tax
Increment
Based on Net
Factor
J0.2261168310)
850,000,000 on
Net Tax
Increment
Based on
Gross Factor
(0.1793855082)Iota[SERAF
L?*". ^l&oCountol
L§?tLP*l99 C2HD&I
! Community Development Commission of the City of National City
't?D!5[l5r!?!!SJ5S^Sy^RlPl!lPi/iPoway Redeveiopment Agency
.L
.
12,09^8941
2,365,597!
13,543.245!
J2.735,140i 534,901 1
_357,516
2,429,46r2
490.644
793.345
_ _ 1.02S,S46j
'32,022,715!'~ 36;6ll7865r 7,240,8751 6,460,007 "13,700,882;
I3/884!?48! _ _?.5_Q7.7?8I __ 2,490,758 4,998,557]
5,923,169! "7,403,962!"" " 1,339,3281 "T328.163 "~ ........ 2,667 ,492 1
5J6.623J ___ ^I§§i48l_ ?.i^?!1j??!
" ...... 20,220,665j'7.586,810! 8,632^1351
i imperial Beach Redevelopment Agency
I La Mesa Commynjty ftedevejogment Agency
(San Marcos Redeyelopmenf Agency
ISolana Beach Redevelopment Agency 442,5021 100.057!
2^26^525!
109,883
I Redeveloprnent Agency of the Ci^ of San jDiego*
209,941 j
__
8,968,323] ........ ~ 2,027r889i" ' ' 1 "608,787 3,636,6761
\ City of Chula Vista Redevelopment Agency
jCarlsbad RedeyelpDment Agency ^
iCommunitjr Development Commission of the CJty oJT Escondjdo
fCprnmunity Deveiogment Agency of the City of Cpronado __
8.931,739; 11,935,6211 2,019,617! 2,141,077 4,160,694i
3,330.530! _3_,3j30,53pj 753,0891 _ _ 597.449 1.350,5381
"22^929,7971"" 54^953r_"_""4J13,273 |^226J
" "1^837^31" 111,251,333-^ 5,08)9,157!