HomeMy WebLinkAbout80A - SUPPLEMENTAL EDUCATIONAL REVENUE REQUEST FOR COUNCIL/
AGENCY ACTION
MEETING DATE: CLERK OF COUNCIL USE ONLY:
MAY 3, 2010
TITLE: APPROVED
? As Recommended
APPROPRIATION ADJUSTMENT AND RESOLUTION - ? As Amended
PAYMENT TO SUPPLEMENTAL EDUCATIONAL ? Ordinance on 1st Reading
REVENUE AUGMENTATION FUND ? Ordinance on 2nd Reading
? Implementing Resolution
? Set Public Hearing For
CONTINUED TO
~ / ~
` V ~V `"7 FILE NUMBER
CITY MANAGER ~ EXECUTIVE DIRECTOR
RECOMMENDED ACTION
CITY COUNCIL ACTION
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
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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:
~,D
Nancy T. E ards Francisco Gutierrez
Assistant D ector Executive Director
Community Development Agency Finance and Management Services Agency
CJN/NTE/EB/kg
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