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HomeMy WebLinkAboutItem a: Consideration of Affordable Housing Obligations and Functions after Dissolution of Redevelopment Agency under AB 26STAFF REPORT DATE: January 17, 2012 TO: Mayor and City Council Development Services Department FROM: Jason Kruckeberg, Assistant City Manager /Development Services Director° By: Jerry Schwartz, Economic Development Manager j7 SUBJECT: CONSIDERATION OF CONTINUING AFFORDABLE HOUSING OBLIGATIONS AND FUNCTIONS AFTER THE DISSOLUTION OF THE ARCADIA REDEVELOPMENT AGENCY UNDER AB 26 Recommendation: Adopt Resolution No. 6815, electing not to retain the housing assets and functions previously performed by the Arcadia Redevelopment Agency BACKGROUND On June 28, 2011, as part of the 2011 -2012 State of California budget bill, companion bills Assembly Bill 1X 26 ( "AB 26 ") and Assembly Bill 1X 27 ( "AB 27 ") were enacted, which would use a "successor agency" to dissolve all redevelopment agencies unless the communities that created the redevelopment agencies adopted ordinances to make certain annual payments to the State. On July 18, 2011, the validity of AB 26 and AB 27 were challenged in the California Supreme Court. On December 29, 2011, the Supreme Court issued a final decision in the matter, finding AB 26 valid but AB 27 invalid. As a result, redevelopment agencies will cease to exist on February 1, 2012. AB 26 provides that upon the dissolution of the Arcadia Redevelopment Agency ( "Agency "), the City of Arcadia ( "City "), as the entity that created the Agency, may elect to retain the housing assets and functions previously performed by the Agency. If the City so elects, all rights, powers, duties, and obligations, excluding any amounts on deposit in the Agency's Low and Moderate Income Housing Fund, would be transferred to the City. If the City elects not to retain the housing functions, all rights, powers, duties, and obligations, excluding any amounts on deposit in the Agency's Low and Moderate Income Housing Fund, shall be transferred as follows: (1) where there is no local housing authority in the territorial jurisdiction of the Agency, to the Department of Housing and Community Development; (2) where there is one local housing authority in the territorial jurisdiction of the Agency, to that local housing authority; (3) where there is more than one local housing authority in the territorial jurisdiction of the Agency, to the local housing authority selected by the City. If the City Council desires to elect to retain the Arcadia Redevelopment Agency's housing assets and functions, the City Council must pass Resolution No. 6814 to do so. If the City Council does not wish to retain the Agency's housing assets and functions and have it transfer to the local housing authority, it must pass Resolution No. 6815 instead. DISCUSSION Health and Safety Code section 34176, enacted by AB 26, provides that the City may elect to retain the housing assets and functions previously performed by the Arcadia Redevelopment Agency upon the Agency's dissolution. If the City retains such functions and assets, all rights, powers, duties, and obligations, excluding any amounts on deposit in the Agency's Low and Moderate Income Housing Fund, would be transferred to the City. Although AB 26 is ambiguous about the what all "rights, powers, duties and obligations" pertaining to housing functions includes, which the public body retaining the housing assets and functions of the Agency will take on, it likely includes the following: providing production, inclusionary or replacement affordable housing units, developing affordable housing units in accordance with community income demographic restrictions, and monitoring and reporting on affordable housing as required. The Council should be aware it will not be able to retain the Agency's low /mod housing funds, and there is no identified continuing funding source for affordable housing functions in future years if it assumes the Agency's housing functions and assets. Pursuant to Health and Safety Code section 34176(b), if the City elects not to retain the Agency's housing functions and assets, all rights, powers, duties, and obligations, excluding any amounts on deposit in the Agency's Low and Moderate Income Housing Fund, shall be transferred as follows: (1) where there is no local housing authority in the territorial jurisdiction of the Agency, to the Department of Housing and Community Development; (2) where there is one local housing authority in the territorial jurisdiction of the Agency, to that local housing authority; (3) where there is more than one local housing authority in the territorial jurisdiction of the Agency, to the local housing authority selected by the City. If the City wishes to elect to retain the housing assets and functions, it should approve and adopt Resolution No. 6814 which is Attachment A to this staff report. If the City wishes to elect not to retain the housing assets and functions it should approve and adopt Resolution No. 6815, which is Attachment B to this staff report. If the Council adopts Resolution No. 6815, the Agency's housing functions and assets will pass to a local housing authority within the territorial jurisdiction of the Agency, which would be the Los Angeles County Housing Authority. Staff Report January 17, 2012 Page 2 of 3 Regardless of the City Council's decision, it is important to note that the Agency's low /mod housing fund balance will be transferred to the LA County Auditor - Controller to be distributed to the various taxing entities as is required under AB 26. FISCAL IMPACT If the City elects to retain the housing functions and assets of the Agency, there will not be any low /mod funds to pay the associated costs. Those costs will be borne through some other source depending on the direction of the Oversight Board, including potentially general redevelopment or the City's General Fund. RECOMMENDATION Adopt Resolution No. 6815 electing not to retain the housing assets and functions previously performed by the Arcadia Redevelopment Agency. Approved by: ,P.a --,.,) Donald Penman, City Manager Attachment A: City Council Resolution No. 6814 electing to retain the Arcadia Redevelopment Agency's housing functions and assets Attachment B: City Council Resolution No. 6815 electing not to retain the Arcadia Redevelopment Agency's housing functions and assets Staff Report January 17, 2012 Page 3 of 3 ATTACHMENT A RESOLUTION NO. 6814 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, ELECTING TO RETAIN THE HOUSING ASSETS AND FUNCTIONS PREVIOUSLY PERFORMED BY THE ARCADIA REDEVELOPMENT AGENCY PURSUANT TO PART 1.85 OF DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE WHEREAS, pursuant to the Community Redevelopment Law (Health & Saf. Code, § 33000 et seq.), the City Council of the City of Arcadia ( "City ") created the Arcadia Redevelopment Agency ( "Agency "); and WHEREAS, the Agency has been responsible for implementing the Redevelopment Plan for the Central Redevelopment Project covering certain properties within the City; and WHEREAS, as part of the 2011 -12 State budget bill, the California Legislature enacted, and the Governor signed, companion bills AB 1X 26 and AB 1X 27, requiring that each redevelopment agency be dissolved unless the community that created it enacts an ordinance committing it to making certain payments; and WHEREAS, a Petition for Writ of Mandate was filed in the Supreme Court of the State of California on July 18, 2011 (California Redevelopment Association, et al. v. Ana Matosantos, et al., Case No. S194861), challenging the constitutionality of AB .1 X 26 and AB 1X 27 on behalf of cities, counties and redevelopment agencies; and WHEREAS, on August 11, 2011, and modified on August 17, 2011, the Supreme Court stayed portions of AB 1X 26, and AB 1X 27 in its entirety, during the pendency of the matter; and WHEREAS, on December 29, 2011, the Supreme Court issued its final decision in the aforesaid litigation, upholding AB 1X 26, invalidating AB 1X 27, and extending all 1 statutory deadlines under AB 1X 26, essentially dissolving all redevelopment agencies throughout the State effective February 1, 2012; and WHEREAS, Health and Safety Code section 34176 provides that the City may elect to retain the housing assets and functions previously performed by the Agency, but if the City does not so elect, all rights, powers, assets, liabilities, duties, and obligations associated with the housing activities of the Agency, excluding any amounts in the Low and Moderate Income Housing Fund, shall be transferred as follows: (1) where there is no housing authority in the territorial jurisdiction of the Agency, to the State of California Department of Housing and Community Development; (2) where there is one local housing authority in the territorial jurisdiction of the Agency, to that housing authority; (3) where there is more than one local housing authority in the territorial jurisdiction of the Agency, to the local housing authority selected by the City; and WHEREAS, the City desires to elect to retain the housing assets and functions of the former Agency; and WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS: SECTION 1. The Recitals set forth above are true and correct and incorporated herein by reference. SECTION 2. The determination given in this Resolution does not commit the City to any action that may have a significant effect on the environment. As a result, such 2 determination does not constitute a project subject to the requirements of the California Environmental Quality Act. The City Council directs City staff to file a Notice of Exemption within five (5) days following adoption of this Resolution with the Clerk of the Board of Supervisors of the County of Los Angeles. SECTION 3. In accordance with Health and Safety Code section 34176, and based on the Recitals set forth above, the City Council hereby elects to retain the housing assets and functions previously performed by the Arcadia Redevelopment Agency. Upon dissolution of the Agency pursuant to Part 1.85 of Division 24 of the California Health and Safety Code, and except as provided under AB 1X 26, all rights, powers, assets, liabilities, duties and obligations associated with the housing activities of the Arcadia Redevelopment Agency, excluding any amounts in the Arcadia Redevelopment Agency's Low and Moderate Income Housing Fund, shall be transferred in accordance with Health and Safety Code section 34176 to the City of Arcadia. SECTION 4. The City Council hereby authorizes and directs the City Manager, or his designee, to take any action and execute any documents necessary to carry out the purposes of this Resolution, including but not limited to notifying the Los Angeles County Auditor - Controller, the Controller of the State of California, and the California Department of Finance of the adoption of this Resolution and the transfer of all housing assets and functions of the former Arcadia Redevelopment Agency to the City of Arcadia, all in accordance with AB 1X 26. SECTION 5. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or 3 applications of this Resolution which can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The City Council hereby declares that it would have adopted this Resolution irrespective of the invalidity of any particular portion thereof. SECTION 6. This Resolution shall take effect immediately. SECTION 7. The City Clerk shall to the adoption of this Resolution. Passed, approved and adopted this 17th day of January, 2012. ATTEST: City Clerk APPROVED AS TO FORM: Le„ Stephen P. Deitsch City Attorney 4 Mayor of the City of Arcadia ATTACHMENT B RESOLUTION NO. 6815 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, ELECTING NOT TO RETAIN THE HOUSING ASSETS AND FUNCTIONS PREVIOUSLY PERFORMED BY THE ARCADIA REDEVELOPMENT AGENCY PURSUANT TO PART 1.85 OF DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE WHEREAS, pursuant to the Community Redevelopment Law (Health & Saf. Code, § 33000 et seq.), the City Council of the City of Arcadia ( "City ") created the Arcadia Redevelopment Agency ( "Agency "); and WHEREAS, the Agency has been responsible for implementing the Redevelopment Plan for the Central Redevelopment Project covering certain properties within the City; and WHEREAS, as part of the 2011 -12 State budget bill, the California Legislature enacted, and the Governor signed, companion bills AB 1X 26 and AB 1X 27, requiring that each redevelopment agency be dissolved unless the community that created it enacts an ordinance committing it to making certain payments; and WHEREAS, a Petition for Writ of Mandate was filed in the Supreme Court of the State of California on July 18, 2011 (California Redevelopment Association, et al. v. Ana Matosantos, et al., Case No. S194861), challenging the constitutionality of AB 1X 26 and AB 1X 27 on behalf of cities, counties and redevelopment agencies and requesting a stay of enforcement; and WHEREAS, on August 11, 2011, and modified on August 17, 2011, the Supreme Court stayed portions of AB 1X 26, and AB 1X 27 in its entirety, during the pendency of the matter; and 1 WHEREAS, on December 29, 2011, the Supreme Court issued its final decision in the aforesaid litigation, upholding AB 1X 26, invalidating AB 1X 27, and extending all statutory deadlines under AB 1X 26, essentially dissolving all redevelopment agencies throughout the State effective February 1, 2012; and WHEREAS, Health and Safety Code section 34176 provides that the City may elect to retain the housing assets and functions previously performed by the Agency, but if the City does not so elect, all rights, powers, assets, liabilities, duties, and obligations associated with the housing activities of the Agency, excluding any amounts in the Low and Moderate Income Housing Fund, shall be transferred as follows: (1) where there is no housing authority in the territorial jurisdiction of the Agency, to the State of California Department of Housing and Community Development; (2) where there is one local housing authority in the territorial jurisdiction of the Agency, to that housing authority; (3) where there is more than one local housing authority in the territorial jurisdiction of the Agency, to the local housing authority selected by the City; and WHEREAS, the City desires to elect not to retain the housing assets and functions of the former Agency; and WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS: SECTION 1. The Recitals set forth above are true and correct and incorporated herein by reference. 2 SECTION 2. The determination given in this Resolution does not commit the City to any action that may have a significant effect on the environment. As a result, such determination does not constitute a project subject to the requirements of the California Environmental Quality Act. The City Council directs City staff to file a Notice of Exemption within five (5) days following adoption of this Resolution with the Clerk of the Board of Supervisors of the County of Los Angeles. SECTION 3. In accordance with Health and Safety Code section 34176, and based on the Recitals set forth above, the City Council hereby elects not to retain the housing assets and functions previously performed by the Arcadia Redevelopment Agency. Upon dissolution of the Arcadia Redevelopment Agency pursuant to Part 1.85 of Division 24 of the California Health and Safety Code, and except as otherwise provided under AB 1X 26, all rights, powers, assets, liabilities, duties, and obligations associated with the housing activities of the Arcadia Redevelopment Agency, excluding any amounts in the Low and Moderate Income Housing Fund, shall be transferred in accordance with Health and Safety Code section 34176. SECTION 4. The City Council hereby authorizes and directs the City Manager, or his designee, to take any action and execute any documents necessary to carry out the purposes of this Resolution, including but not limited to notifying the Los Angeles County Auditor - Controller, the Controller of the State of California, and the California Department of Finance of the adoption of this Resolution. SECTION 5. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or 3 applications of this Resolution which can be given effect without the invalid provision or application, and to this end the provisions of this Resolution are severable. The City Council hereby declares that it would have adopted this Resolution irrespective of the invalidity of any particular portion thereof. SECTION 6. This Resolution shall take effect immediately. SECTION 7. The City Clerk shall certify to the adoption of this Resolution. Passed, approved and adopted this 17th day of January, 2012. ATTEST: City Clerk APPROVED AS TO FORM: Stephen P. Deitsch City Attorney 4 Mayor of the City of Arcadia