SR-414-003 (10)
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CA:RMM:lmd208/hpw
City council Meeting 8-19-86
Santa Monica, California
STAFF REPORT
TO:
Redevelopment Agency
FROM:
City staff
SUBJECT:
Resolutions by the Santa Monica Redevelopment Agency
to Adopt statments of Existing Obligations and
Programs Pertaining to the Ocean Park Redevelopment
Projects No. lea) and No. l(b) and the Downtown
Redevelopment Project
Introduction
This staff Report transmits resolutions of the Santa Monica
Redevelopment Agency ("Agency") which would authorize adoption of
the attached statements pertaining to the Agency's existing
obligations and programs for the Ocean Park Projects No. lea) and
No. l(b) and Downtown Redevelopment Project.
It is Staff's recommendation that the Agency adopt the
attached resolutions.
13ackqround
At the July 29, 1986 joint meeting of the City Council and
The Redevelopment Agency, the Agency adopted Resolution Number
407 (RAS), authorizing the submission of proposed statements of
Existing Obligations and Programs pertaining to Redevelopment
projects, to the city council and the state Department of Housing
and Community Development ("HCD") for review. Such procedural
resolution also authorized a public hearing, the date, time and
place to be set by the Agency's Executive Director. On August 1,
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1986 the statements were transmitted to the City council and HCD
as required pursuant to the redevelopment law (Health and Safety
Code section 33334.6), along with notice that the pUblic hearing
was scheduled for August 19, 1986 at 7:30 p.m. in the City
Council Chambers.
Required Notices of such PUblic hearing were published in
the Evening Outlook on August 4, and August 12, 1986.
As indicated at the July 29 meeting, the state Legislature
recently enacted Assembly Bill 265 (effective January 1, 1986)
which requires redevelopment agencies to set aside twenty percent
(20%) of tax increment proceeds from any redevelopment proj ect
adopted prior to 1977 for placement into a Low and Moderate
Income Housing Fund (tlFundll). However, this new legislation,
codified in Section 33334.6 of the California COmlnunity
Redevelopment law (Health and Safety Code section 33000 et seq.)
also allows a redevelopment agency the flexibility to deposit
less than the required 20% into the Fund in a particular year if
certain action is taken on or before September 1, 1986. After
submission of the statements to the city council and HCD, and
required publication of notice of the pUblic hearing, the second
required action is the approval of resolutions adopting the
statements of Existing obligations and Programs.
This one time option to adopt of the statements for the
Ocean Park and Downtown Redevelopment Proj ects , would give the
Agency the right, but not the obligation, to set aside less than
the required 20% of tax increment. However, if the statements
are not adopted prior to the September 1, 1986 deadline, the
Agency would not retain such flexibility, and it will be required
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to set aside 20% of the tax increment it receives from each of
the respective Redevelopment Project areas, irrespective of its
existing debt or planned projects.
Discussion
If the Statements of Existing Obligations are adopted
pursuant to a duly authorized public hearing, the Agency would be
permitted in any fiscal year to deposit less than the 20% of tax
increment from each Redevelopment Project into the Low and
Moderate Income Housing Fund, provided the Agency finds that the
difference between the amount actually deposited and the normal
20% requirement is necessary in order to make payments under
existing obligations of amounts due or if such funds are required
to be committed, set aside, or reserved by the Agency during that
fiscal year and are used by the Agency for those purposes.
"Existing obligations" include principal of, and interest
on, loans, monies advanced to, or indebtedness (whether funded,
refunded, assumed, or otherwise) incurred by the Agency to
finance or refinance in whole or part any redevelopment project
existing on and created prior to January 1, 1986, and contained
on the relevant statement of Existing Obligations.
The adoption of the statement of Existing Programs for the
Downtown Redevelopment proj ect would allow the Agency, in each
fiscal year until July 1, 1996, to deposit less the 20% tax
increment from the Downtown Redevelopment project if the amount
required for projects listed on such statement are necessary in
order to provide for the orderly and timely completion of the
Downtown Redevelopment Plan. The projects must be activities
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approved by the Agency prior to January 1, 1986, which are
contained on such statement of Existing programs adopted by
resolution after a duly noticed public hearing.
The Agency's decision to adopt these statements is a one
time selection which gives the Agency the right and flexibiilty
to set aside less than the required 20% tax increment into the
Low and Moderate Income Housing Fund. It is emphasized that
adoption of such statements does not obligate the Agency to
deposit less than the 20% tax increment into the Low and Moderate
Income Housing Fund. In fact, the Agency may deposit, to the
extent funds are available, amounts in excess of the 20% tax
increment if it so desires. However, it is also stressed that
existing obligations and programs of the Agency should be given
prompt attention and funding to adequately satisfy such
obligations and programs for the benefit of the entire community,
particularly the Ocean Park and Downtown Redevelopment Proj ect
Areas.
Budqet/Financial Imoact
There is no budget or financial impact resulting from
Agency approval of this recommended procedural action.
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EE COMMENDAT ION
It is respectfully recommended that the Redevelopment
Agency take the following actions:
1. Adopt the attached resolutions approving adoption of
the statements of Existing Obligations and Programs pertaining to
the Ocean Park and Downtown Redevelopment Projects.
PREPARED BY: Robert M. Myers, City Attorney
Linda A. Moxon, Deputy City Attorney
Mike Dennis, Director of Finance
Ernesto Flores, Economic Development Manager
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