50A - ORDINANCE - VOLUNTARY REDEVELOPMENT PROG

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Adopt Ordinance Per Part 1.9 of Division 24 of the California Health and Safety Code September 6, 2011 Page 2 a combination of sources. It is anticipated that as allowed by the legislation, a portion of the Low and Moderate Income Housing funds will be allocated to cover approximately half of the initial remittance payment. The remainder is anticipated to be funded from a combination of delaying or eliminating current projects and programs, debt service savings realized from refunding the 1998 bonds, and reducing the Agency's administrative budget. It is important to note that it is estimated the Agency will receive approximately $728.22 million ($376 million net present value) in net tax increment revenues over the remaining life of the merged project area by participating in the voluntary continuation program. Should the Agency dissolve, the community would only receive the City's share of property taxes and limited successor agency administrative funds estimated at $294.41 million ($159 million net present value). In addition, the Agency would lose all unencumbered assets including, but not limited to, cash, real property and loans, and bond proceeds (i.e., those dedicated to repair of Downtown garages). Given that Santa Ana's redevelopment efforts significantly contribute to much-needed economic and physical community revitalization, affordable housing development, and the general safety and enhancement of our city, staff recommends that the Agency adopt the Continuation Ordinance and continue to take the necessary steps to implement ABX1 27. Legal counsel is also recommending that the City preserve its options by proceeding with the adoption of the Continuation Ordinance. The ordinance does not waive the City's or Agency's right to challenge the legality of this legislation. This ordinance authorizes the City Manager or his designee to notify the appropriate State agencies before November 1, 2011 that the City agrees to comply with the provisions of the Continuation Bill. This is the first reading of this ordinance and the second will be on September 19. If not for the judicial stay described below, the ordinance would take effect 30 days after adoption. On August 11, 2011, the California Supreme Court agreed to review the petition filed by the California Redevelopment Association and League of California Cities and stayed specified portions of the legislation, indefinitely postponing certain provisions' effectiveness, including the Continuation Ordinance. While this matter is being considered in court, the Agency can continue to perform its "enforceable obligations;" however, no new agreements, amendments to existing agreements, disposition of assets (except per existing enforceable obligations), etc. are permitted. The stay will remain in effect until the court issues a decision, which is expected by January 15, 2012. Should ABX1 27 be validated and/or the stay or a portion thereof is lifted earlier as it pertains to the Continuance Ordinance, the ordinance will become effective thereafter. Having the Continuation Ordinance in place in anticipation of this event reduces the risk to the City and Agency of missing revised deadlines which the Court may impose. Further, on August 15, 2011, in an effort to mitigate the impacts of the continuation payment on the Agency, an appeal of the remittance amount with the State Department of Finance pursuant to ABX1 27 was filed. It has been determined that there were 96 successful property tax assessment appeals that were filed and resolved for FY 2008-09, resulting in an estimated appeals refund 5OA-2