HomeMy WebLinkAbout80B - EDUCATIONAL REVENUE AUGMENTATION FUND FY 2008-2009 REQUEST FOR COUNCIL/
AGENCY ACTION
MEETING DATE: CLERK OF COUNCIL USE ONLY:
DECEMBER 7, 2009
TITLE: APPROVED
? As Recommended
APPROPRIATION ADJUSTMENT - ? As Amended
EDUCATIONAL REVENUE AUGMENTATION ? Ordinance on 1st Reading
? Ordinance on 2nd Readin
FUND FY 2008-2009 g
? Implementing Resolution
? Set Public Hearing For
(~j~ CONTINUED TO
~"Z FILE NUMBER
CITY MANAGER EXECUTIVE (RECTOR
RECOMMENDED ACTION
CITY COUNCIL ACTION
Approve an appropriation adjustment transferring funds from the Merged
Redevelopment Project Area Fund to the Low and Moderate-Income Housing
Fund to return the funds borrowed to pay the County Educational Revenue
Augmentation Fund as required by legislation implementing the California
State Budget for FY 2008-2009.
COMMUNITY REDEVELOPMENT AGENCY ACTION
Adopt a resolution returning $3,679,545 to the Housing Set-Aside Funds,
which had been borrowed to make the FY 2008-2009 payment to the
Educational Revenue Augmentation Fund.
DISCUSSION
As a result of Assembly Bill 1389 (AB 1389) implementing the California
State Budget for FY 2008-2009, the Community Redevelopment Agency was
required to make a $3,679,545 payment to the County Educational Revenue
Augmentation Fund (ERAF) by May 10, 2009. The legislation allowed the
Agency to borrow up to fifty percent of the amount required from the Low
and Moderate-Income Housing Fund during FY 2008-2009 to make this
payment.
In May of 2009, the Sacramento Superior Court ruled that AB 1389 was
unconstitutional. Recently, the California Attorney General's Office
notified redevelopment agencies that the state has abandoned its appeal
of the Superior Court ruling, which is now final and binding. Therefore,
80B-1
AA - ERAF Fund FY 08-09
December 7, 2009
Page 2
because the ERAF payment for FY 2008-2009 is no longer required to be
paid, these borrowed funds should be returned to the Low and Moderate-
Income Housing Fund. There remains pending litigation that may require a
more substantial Supplemental Educational Revenue Augmentation Fund
(SERAF) payment for FY 2009-10. Should the state prevail, the Agency may
need to borrow funds once again from the Housing Set-Aside fund.
FISCAL IMPACT
City/Agency approval of the appropriation adjustment and resolution to
return the Housing Set-Aside funds in the amount of $3,679,545, which
had been borrowed for the FY 2008-2009 ERAF payment.
APPROVED AS TO FUNDS AND ACCOUNTS:
Nancy T. Edwards Francisco Gutierrez
Assistan Director Executive Director
Community Development Agency Finance and Management Services Agency
CJN/NTE/kg
80B-2