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11 /23/09 les <br />RESOLUTION NO. CRA 2009-013 <br />A RESOLUTION OF THE COMMUNITY <br />REDEVELOPMENT AGENCY OF THE CITY OF <br />SANTA ANA RETURNING THE HOUSING SET <br />ASIDE FUNDS THAT WERE BORROWED IN <br />ORDER TO MAKE THE 2008-2009 PAYMENT TO <br />THE EDUCATIONAL REVENUE AUGMENTATION <br />FUND <br />BE IT RESOLVED BY THE MEMBERS OF THE COMMUNITY REDEVELOPMENT <br />AGENCY OF THE CITY OF SANTA ANA, AS FOLLOWS: <br />Section 1. The Community Redevelopment Agency of the City of Santa Ana hereby <br />finds, determines and declares as follows: <br />A. As a result of Senate Bill 1389 (SB 1389) implementing the California <br />State Budget for fiscal year 2008-2009, the Community Redevelopment Agency ("Agency") <br />was required to make a $3,679,545 payment to the County Educational Revenue <br />Augmentation Fund ("ERAF") by May 10, 2009 or risk having the County Auditor/Controller <br />withhold property tax revenue from the City's general fund to the extent that such payment was <br />not made by the Agency. <br />B. The legislation allowed the Agency to borrow up to fifty percent of the <br />amount required to be allocated to the Low and Moderate Income Housing Fund during fiscal <br />year 2008-2009 in order to make this payment. The funds could be borrowed for up to ten <br />years. <br />C. As a condition of borrowing from the Low and Moderate Income Housing <br />Fund pursuant to Health & Safety Code § 33681.12, the Agency was required to make a <br />finding that there were insufficient other moneys to remit the required ERAF payment. <br />D. In May of 2009, after the Agency authorized the borrowing of said funds <br />for the ERAF payment, the Superior Court ruled that AB 1389 was unconstitutional. The <br />California Attorney General's Office recently notified redevelopment agencies that the State <br />has abandoned its appeal of the Superior Court ruling, which is now final and binding. <br />E. At this time, as the ERAF payment for fiscal year 2008-2009 is no longer <br />required to be paid by the Agency, these borrowed funds should be returned to the Low and <br />Moderate Income Housing Fund. Pending litigation may require a more substantial SERAF <br />Supplemental Educational Revenue Augmentation Fund ("SERAF") payment for fiscal year <br />2009-2010, which may result in the Agency borrowing such funds in order to make such <br />payment. <br />Section 2. The Agency hereby finds that the legally borrowed funds in the amount of <br />$3,679,545 must be returned to the Low and Moderate Income Housing Fund due to the ruling <br />that AB 1389 was unconstitutional. <br />CRA Resolution No. 2009-013 <br />Page 1 of 2 <br />