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RES-10582 Remittance Agreement ApprovalRESOLUTION NO. 10582 A RESOLUTION OF CITY COUNCIL OF THE CITY OF ORANGE AUTHORIZING AND APPROVING THE EXECUTION AND DELIVERY OF A REMITTANCE AGREEMENT WITH THE ORANGE REDEVELOPMENT AGENCY IN ACCORDANCE WITH ASSEMBLY BILL X1 27 SUBJECT TO CERTAIN CONDITIONS AND RESERVATIONS. WHEREAS, the Orange Redevelopment Agency (the "Agency ") is a community redevelopment agency organized and existing under the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.; herein referred to as the CRL ") and has been authorized to transact business and exercise the powers of a redevelopment agency pursuant to action of the City Council of the City of Orange (the "City Council "); and WHEREAS, the Agency is engaged in activities necessary and appropriate to carry out the Redevelopment Plan for the Orange Merged and Amended Redevelopment Project Area ( "Redevelopment Project ") which was adopted by and through a series of ordinances of the City Council; and WHEREAS, the Redevelopment Plan sets forth a plan for redevelopment of the Redevelopment Project consistent with CRL and the policies and standards of the General Plan of the City; and WHEREAS, Parts 1.8, 1.85 and 1.9 of Division 24 of the CRL were added by Assembly Bill X1 26 and Assembly Bill X1 27 (together, the "2011 Redevelopment Legislation "), which laws were drafted to become effective when signed by the Governor on June 28, 2011; and WHEREAS, Part 1.85 provides for the statewide dissolution of all redevelopment agencies as of October 1, 2011, and further provides that upon such dissolution that a successor agency will administer the enforceable obligations of all redevelopment agencies and otherwise wind up the agencys' affairs, all subject to the review and approval of oversight committees; and WHEREAS, notwithstanding the provisions of Part 1.85, Part 1.9 provides that a redevelopment agency may continue in operation if a city that includes a redevelopment agency adopts an ordinance agreeing to comply with and participate in the Alternative Voluntary Redevelopment Program established in Part 1.9 (the "Program "); and WHEREAS, upon the finding and determination that the dissolution of the Agency would be detrimental to the health, safety, and economic well -being of the residents of the City and cause irreparable harm to the community, the City Council elected to comply with and participate in the Program by the adoption of Ordinance No. 15 -11 on August 23, 2011 the "Ordinance "), in order to allow the Agency to continue in operation and perform its functions; and WHEREAS, Part 1.9 requires the City to make specified annual remittances to the County auditor - controller in order to continue the existence of the Agency; and WHEREAS, ABx1 27 authorizes the City to enter into an agreement with the Agency, whereby the Agency transfers a portion of its tax increment to the City in an amount equal to the City's annual remittances to the County Controller to comply with the provisions of Part 1.9; and WHEREAS, the purpose of the Remittance Agreement is to provide for the transfer of funds by the Agency to the City in an amount sufficient for the City to make the remittance payments required by Part 1.9, utilizing net tax increment in this current fiscal year and forthcoming years; and WHEREAS, pursuant to the provisions of Part 1.9, the City shall pay one -half of the total remittance amounts for a fiscal year on or before January 15 of that year and shall pay the remaining one -half of the remittance amount on or before May 15 of that year; and WHEREAS, for fiscal year 2012 -13 and each fiscal year thereafter, a Participating City's remittance shall be in an amount calculated by the Participating City in accordance with the requirements of Part 1.9, subject to adjustment based on audit and verification by the Director of Finance, the State Controller and the applicable county auditor - controller. Part 1.9 provides that on or before November I" of each year, commencing November 1, 2012, the City shall notify the Department of Finance, the State Controller, and the applicable county auditor - controller of the remittance amount calculated by the City; and WHEREAS, the validity, passage, and applicability of the 2011 Redevelopment Legislation is the subject of judicial challenge(s), including the action brought by the California Redevelopment Association ( "CRA ") and the League of California Cities in their own capacity and on behalf of their members: California Redevelopment Association, et al v. Ana Matosantos, et al (the "CRA Action "); and WHEREAS, the California Supreme Court (the "Court") issued an order on August 11, 2011 in the CRA Action directing the parties to show cause why the relief sought in the CRA Action should not be granted and established a schedule designed to facilitate a decision before January 15, 2012 (the "Original Order "). Pending a decision in the CRA Action, the Original Order stayed the effectiveness of certain portions of the 2011 Redevelopment Legislation and appears to preclude the Agency from taking specified actions as defined by those sections not stayed in Part 1.8, even though the City Council has adopted the Ordinance No. 15 -11; and WHEREAS, on August 17, 2011, the Court modified the Original Order relating to whether redevelopment agencies are required to adopt a schedule of those "enforceable obligations" that require payments to be made through the end of calendar year 2011 Enforceable Obligation Payment Schedule "). Notwithstanding its modification of the Original Order, it remains unclear whether an agency in a city that has opted in to the Program must still approve the Remittance Agreement; and 2- WHEREAS, in an abundance of caution, the lack of clarity in the Original Order, and the uncertainty what the Court's ultimate ruling on the CRA Action will have on the City's and Agency's ability to enter into the Remittance Agreement, the Remittance Agreement is being entered into on the condition that the Agency is not pledging or obligating in any way, any of its revenue, and will not have any effect unless and until the Supreme Court lifts or modifies the Stay Order in a manner such that the prohibitions in Part 1.8 do not apply to the Agency and the Agency is permitted to perform under the Remittance Agreement pursuant to Health and Safety Code Section 34194.2 or other provisions of law. NOW, THEREFORE, the City Council of the City of Council resolves, finds, and determines, on the basis of the facts set forth in the agenda report presented to it and any testimony received at the meeting at which this matter was considered as follows: 1. The foregoing recitals are true and correct. 2. The Remittance Agreement, in the form attached hereto as Exhibit "A" is hereby approved. 3. The Mayor is hereby authorized and directed to execute and the City Clerk to attest to the Remittance Agreement which, when fully executed, shall be placed on file in the office of the City Clerk. 4. The adoption of this Resolution is not intended and shall not constitute a waiver by the City of any right the City may have to challenge the legality of all or any portion of AB X1 26 or AB X1 27 through administrative or judicial proceedings. ADOPTED this 27 day of September, 2011. i,V. a ecche, Mayo , City of Orange ATTEST: Mary u , City Clerk, Cit f nge 3- STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF ORANGE ) I, MARY E. MURPHY, City Clerk of the City of Orange, California, do hereby certify that the foregoing Resolution was duly and regularly adopted by the City Council of the City of Orange at a regular meeting thereof held on the 27 day of September, 2011, following vote: AYES: COUNCILMEMBERS: Whitaker, Smith, Cavecche NOES: COUNCILMEMBERS: Dumitru, Bilodeau ABSENT: COUNCILMEMBERS: None ABSTAIN: COUNCILMEMBERS: None Mary E. City Clerk ange 0