CITY COUNCIL AGENDA ITEM
Meeting Date: February 26, 2002
Subject/Title: Adopt an Ordinance to Eliminate the Imposed Time Limits to Incur Debt for the Merged Redevelopment Plan
Submitted by: Gina Rozenski, Redevelopment Analyst
Approved by: John Stevenson, City Manager
Adopt an ordinance eliminating the existing time limits to incur debt for the Merged Redevelopment Plan for the Brentwood and North Brentwood Redevelopment Projects pursuant to Health and Safety Code Section 33333.6(e)(2), and amending related ordinances in connection therewith.
The Brentwood Redevelopment Plan (“Downtown Project”) was adopted in 1982 by Ordinance 333. The Downtown Project has been amended four times: By Ordinance 358 in 1983, by Ordinance 549 in 1994, by Ordinance 621 in 1999, and by Ordinance 632 in 2000.
The North Brentwood Redevelopment Plan (“North Brentwood Project”) was adopted in 1991 by Ordinance 496. The North Brentwood Project has been amended twice: By Ordinance 548 in 1994 and by Ordinance 632 in 2000.
Ordinance No. 632 of May 9, 2000, merged the two project areas into one, and the project is now jointly referred to as the “Merged Project.”
In June 2001, the City Council, acting as the legislative body of the Brentwood Redevelopment Agency, approved Resolution. No. 2322, requiring a study to add territory in the North Brentwood Area, known as the Sunset Industrial Park, to extend the time limit to incur debt for an additional 10 years, and to extend and re-establish the authority of eminent domain.
Assembly Bill 1290, which became effective in 1994, imposed time limits on redevelopment plans including time limits on incurring debt, receipt of tax increment and effectiveness of the plan. The outside time limit for incurring debt under AB 1290 for plans adopted prior to 1994 was the later of 20 years after plan adoption or January 1, 2004. As such, the Downtown Project Area’s debt incurrence time limit is 2004, and North Brentwood’s is 2011. Under the time limit restrictions imposed by AB 1290, this time limit on debt incurrence could only be extended by 10 years and then only if the redevelopment agency could demonstrate significant remaining blight.
In order to obtain the additional 10-year extension on the debt incurrence limit, the community was required to undertake a plan amendment and to make certain findings including that significant light remains in the project area that cannot be eliminated without incurring additional debt after the previously established deadline.
The action taken by the City Council in June 2001 was, among other issues, to extend the time limit on debt incurrence by 10 years in both the Downtown and North Brentwood Project Areas.
The State Senate passed Senate Bill 211 (Torlakson D-Antioch) in October 2001, to be effective January 1, 2002. SB211 modified the uniform statewide time limits for certain redevelopment agencies in order to provide them with additional time and money to meet their development objectives and financial obligations. Essentially, after January 1, 2002, SB211 allows a community to amend a pre-1994 plan to delete the debt incurrence deadline altogether, with the result that an agency can incur debt under such a plan up to the deadline for the effectiveness of the plan. Such an amendment simply requires the adoption of an ordinance by the legislative body (city council) without any noticing, hearing, or documentation requirements normally applicable to a redevelopment plan amendment, although standard ordinance adoption procedures must be followed.
Many redevelopment agencies throughout the State of California were facing pending debt incurrence deadlines under their pre-1994 redevelopment plans and the unintended consequences of dramatically increasing debt issuances in order to ensure that they would still be able to collect tax increment and undertake redevelopment activities beyond the 2004 deadline. SB 211 essentially eliminated this unintended consequence.
Many plan amendments trigger statutory pass-through payments to all taxing entities with whom the agency does not already have a pass-through agreement. This same principle is carried through in SB 211. If a community adopts an ordinance under SB 211 eliminating the debt incurrence time limit, its redevelopment agency will be required to pay the statutory pass-through payments required by Health & Safety Code Section 33607.7. In our case, the North Brentwood Plan already passes through annual tax increment payments to all taxing agencies, so SB 211 does not affect this Plan. The merger amendment of 2000 triggered statutory pass -through payments for the Downtown Plan when the original tax increment limit is met, which expected to occur this fiscal year. So, as with the North Brentwood Plan, SB 211 will not affect the Downtown Plan as it relates to statutory pass-through payments.
By adopting the proposed ordinance to eliminate the time limits for debt incurrence for the Merged Projects, the proposed amendment currently being considered by the Brentwood Redevelopment Agency will now only include adding territory in the North Brentwood Area, known as the Sunset Industrial Park, and extending and re-establishing the authority of eminent domain.
The scope of the proposed plan amendment currently being processed by the Brentwood Redevelopment Agency is reduced by the elimination of extending the time limit to incur debt. Consequently, there will be a reduction in consultant costs necessary to process the proposed plan amendment.
At its meeting of January 22, 2002, the City Council invoked the “Rule of Necessity” wherein Mayor McPoland was randomly selected to participate in decisions concerning the proposed redevelopment plan amendment. As such, only Members McPoland, Beckstrand and Gomes are eligible to vote on this item.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD ELIMINATING THE EXISTING TIME LIMIT ON INCURRING DEBT FOR THE MERGED REDEVELOPMENT PLAN FOR THE BRENTWOOD AND NORTH BRENTWOOD REDEVELOPMENT PROJECTS
WHEREAS, the City Council of the City of Brentwood (the “City Council”), adopted Ordinance No. 333 on July 13, 1982, approving and adopting the Redevelopment Plan (the “Brentwood Redevelopment Plan”) for the Brentwood Redevelopment Project (the “Project”); and
WHEREAS, on November 29, 1983, the City Council adopted Ordinance
No. 358, which added territory and established certain limitations with respect to the Brentwood Redevelopment Plan; and
WHEREAS, on December 27, 1994, the City Council adopted Ordinance
No. 549, approving and adopting an amendment to the Brentwood Redevelopment Plan changing certain limitations with respect to the Brentwood Redevelopment Plan; and
WHEREAS, on September 13, 1999, the City Council adopted Ordinance No. 621, approving and adopting an amendment extending certain limitations with respect to the Brentwood Redevelopment Plan; and
WHEREAS, the City Council adopted Ordinance No. 496 on July 9, 1991, approving and adopting the Redevelopment Plan (the “North Brentwood Redevelopment Plan”) for the North Brentwood Redevelopment Project; and
WHEREAS, on December 27, 1994, the City Council adopted Ordinance
No. 548, approving and adopting an amendment to the North Brentwood Redevelopment Plan changing certain limitations with respect to the North Brentwood Redevelopment Plan; and
WHEREAS, on May 9, 2000, the City Council adopted Ordinance No. 632, which merged the Brentwood and the North Brentwood Redevelopment Plans; and
WHEREAS, the Redevelopment Agency of the City of Brentwood (the “Agency”), has been designated as the official redevelopment agency in the City of Brentwood to carry out the functions and requirements of the Community Redevelopment Law of the State of California (Health and Safety Code Section 33000 et seq.) and to implement the Merged Redevelopment Plan; and
WHEREAS, Section 33333.6 of the Health and Safety Code was amended by SB 211 which took effect on January 1, 2002, which authorizes redevelopment agencies to eliminate the time limit on the establishment of loans, advances, and indebtedness contained in redevelopment plans.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BRENTWOOD DOES HEREBY ORDAIN AS FOLLOWS:
Section 1. The Brentwood Redevelopment Plan is hereby amended to eliminate the time limit on the establishment of loans, advances, and indebtedness contained in section 502 of the Brentwood Redevelopment Plan.
Section 2. Ordinance Nos. 333, 358, 549, 621 and 632 for the Brentwood Redevelopment Plan are continued in full force and effect as amended by this Ordinance.
Section 3. The North Brentwood Redevelopment Plan is hereby amended to eliminate the time limit on the establishment of loans, advances, and indebtedness contained in section C of part VII of the North Brentwood Redevelopment Plan.
Section 4. Ordinance Nos. 496, 548 and 632 for the North Brentwood Redevelopment Plan are continued in full force and effect as amended by this Ordinance.
Section 5. The City Clerk is hereby directed to send a certified copy of this Ordinance to the Agency.
Section 6. Severability. If any part of this Ordinance is held to be invalid for any reason, such decision shall not affect the validity of the remaining portion of this Ordinance, and this City Council hereby declares that it would have passed the remainder of this Ordinance if such invalid portion thereof had been deleted.
Section 7. Certification of Passage; Posting. The City Clerk will certify to the passage of this Ordinance by the City Council of the City of Brentwood and cause the same to be posted in three conspicuous places in the City of Brentwood, and it will take effect on the 31st day after its final passage.
PASSED AND ADOPTED this 26th day of February, 2002, by the following vote: