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Home My WebLink About03 - JT AA-Reso-SERAFl! 1° F ~ CIL/ ,, ~t~ ~C~l C1°I ~"'~f1 ~~ I ...,v,, MEETING DATE: MAY 3, 2010 TITLE: APPROPRIATION ADJUSTMENT AND RESOLUTION - PAYMENT TO SUPPLEMENTAL EDUCATIONAL REVENUE AUGMENTATION FUND ~~~~~~w--~ ~~~ CITY MANAGER EXECUTIVE DIRECTOR REC®MMENDE® AST'®N CITY COUNCIL ACTION CLERK OF COUNCIL USE ONLY: APPROVED ^ As Recommended ^ As Amended ^ Ordinance on 1st Reading ^ Ordinance on 2nd Reading ^ Implementing Resolution ^ Set Public Hearing For CONTINUED TO FILE NUMBER Approve an appropriation adjustment transferring funds from the Low and Moderate-Income Housing Fund, the South Main Commercial Corridor Fund and the Tax Increment Revenue Debt Service-Merged Fund to the Merged Redevelopment Project Area Fund to make the necessary payment to the County Supplemental Educational Revenue Augmentation Fund as required by legislation implementing the California State Budget for FY 2009-2010. COMMUNITY REDEVELOPMENT AGENCY ACTION Adopt a resolution finding that borrowing $3,679,545 in Housing Set-Aside Funds and $6,302,827 in South Main Commercial Corridor funds to make the FY 2009-2010 payment to the Supplemental Educational Revenue Augmentation Fund is necessary due to the insufficiency of other revenue sources. DISCUSSION As a result of Assembly Bill X4 26 implementing the California State Budget for FY 2009-2010, the Community Redevelopment Agency is required to make a $17,889,256 payment to the County Supplemental Educational Revenue Augmentation Fund (SERAF) by May 10, 2010. In order to make this payment, the Agency will need to borrow funds from two of its accounts (Low and Moderate Income Housing Fund and South Main Commercial Corridor Fund), as well as use prior year funds and eliminate certain planned projects. The legislation allows the Agency to borrow the amount required to be allocated from the Low and Moderate-Income Housing Fund during FY 2009-2010 to make this payment. The funds may be 3-3 AA & RESOLUTION -SERAF May 3, 2010 Page 2 borrowed for up to five years. The Agency may also borrow other available tax increment funds to meet the obligation. In both cases, the Agency must adopt a resolution making a finding that there are insufficient other monies to make the required payment. In the fall of 2009, the California Redevelopment Association filed a lawsuit challenging the constitutionality of AB X4 26 and the requirement for Redevelopment Agencies to make the SERAF payments to the County Auditor/Controller. A ruling on the merits of the case is anticipated to be released by May 4, 2010. The proposed fund transfers are in anticipation of the payment being due. Until this matter is judicially resolved, the legislation implementing the State's FY 2009-2010 budget still authorizes the County Auditor/Controller to withhold property tax revenue from the City's General Fund to the extent that the $17,889,256 payment is found to be constitutional and payment is not made by the Community Redevelopment Agency on or before May 10, 2010. FISCAL IMPACT City/Agency approval of the appropriation adjustment and resolution will make funds available in the Merged Project Area Fund account (no. 57018843-69166) and will enable staff to make the $17,889,256 payment to the County Auditor for deposit into the SERAF on or before May 10, 2010. APPROVED AS TO FUNDS AND ACCOUNTS: Nancy T. wards LY-C~O Assistant rector Community Development Agency CJN/NTE/EB/kg Francisco Gutierrez Executive Director Finance and Management Services Agency 3-4 4/26/70 les RESOLUTION NO. 2010- A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA MAKING THE FINDING THAT THE AGENCY MUST TRANSFER FUNDS IN ORDER TO MAKE THE 2009-2010 PAYMENT TO THE SUPPLEMENTAL EDUCATIONAL REVENUE AUGMENTATION FUND BE IT RESOLVED BY THE MEMBERS OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, AS FOLLOWS: Section 1. The Community Redevelopment Agency of the City of Santa Ana hereby finds, determines and declares as follows: A. As a result of Assembly Bill 26 (4"' Executive Session)("ABx4-2ti") implementing the California State Budget for fiscal year 2009-2010, the Community Redevelopment Agency ("Agency') is required to make a $17,889,256 payment to the County Supplemental Educational Revenue Augmentation Fund ("SERAF") by May 10, 2010. B. The legislation allows the Agency to borrow the amount required to be allocated to the Low and Moderate Income Housing Fund during fiscal year 2009-2010 in order to make this payment. The funds maybe borrowed for up to five years. C. As a condition of borrowing from the Low and Moderate Income Housing Fund pursuant to Health & Safety Code § 33690, the Agency must make a finding that there are insufficient other moneys to remit the required SERAF payment. D. The legislation allows the Agency to use any funds that are legally available and not legally obligated for other uses in order to make the allocation of SERAF funds. The Agency will advance funds in the amount of $6,302,827 from the South Main Commercial Corridor Fund in order to make the required SERAF payment. D. As a condition of transferring from the South Main Commercial Corridor Fund pursuant to Health & Safety Code § 33690, the Agency must make a finding that there are insufficient other moneys to remit the required SERAF payment. E. The legislation implementing the State's fiscal year 2009-2010 budget also authorized the County Auditor/Controller to withhold property tax revenue from the City's general fund to the extent that the $17,889,256 payment is not made by the Agency by May 10, 2010. F. The allocation obligations shall be an indebtedness of the individual project areas within the Merged Project Area which have time limits which still allow them to incur debt. 3-5 4/26/10 les Section 2. The Agency hereby finds that transferring $3,679,546 from the Low and Moderate Income Housing funds and $6,302,827 from the South Main Commercial Corridor funds is necessary due to the insufficiency of other revenue sources. Section 3. The Executive Director of the Agency is hereby authorized to take all necessary actions and to sign ail documents and instruments necessary to make the $17,889,256 payment to the County Auditor for deposit into the Supplemental Educational Revenue Augmentation Fund on or before May 10, 2010. Section 4. This Resolution shall take effect immediately upon its adoption by the City Council, and the Clerk of the Council shall attest to and certify the vote adopting this Resolution. 3-6 4/26/101es ADOPTED this day of Miguel A. Pulido Chair APPROVED AS TO FORM: Joseph W. Fletcher, General Counsel 2010. By: Lisa E. Storck Assistant General Counsel AYES: Boardmembers: NOES: Boardmembers: ABSTAIN: Boardmembers: NOT PRESENT: Boardmembers: CERTIFICATION OF ATTESTATION AND ORIGINALITY I, Maria D. Huizar, Secretary of the Agency, do hereby attest to and certify the attached Resolution No. 2010- to be the original resolution adopted by the Community Redevelopment Agency of the City of Santa Ana on May _, 2010. Date: Secretary, Community Redevelopment Agency City of Santa Ana 3-7