10 Property Tax Increment
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City Hall
10300 Torre Avenue
Cupertino, CA 95014-3255
Telephone: (408) 777-3220
FAX: (408) 777-3366
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CUPEIUINO
DEPARTMENT OF ADMINISTRATIVE SERVICES
SUMMARY
Agenda Item No.
10
Meeting Date: June 20, 2006
SUBJECT AND ISSUE
Adopt a resolution electing to receive the City's share of property tax increment pass-
through from the City's Redevelopment Agency, Resolution No. 06--.lL::L.
BACKGROUND
Redevelopment agencies accumulate their funds by receiving tax revenues from the
increase in assessed values that occur after creating a redevelopment project area. These
revenues come from counties, cities, special districts and schools that would have
otherwise received a portion of the increased property tax revenues. This growth is called
the property tax increment.
The Community Redevelopment Law Reform Act in 1993, also known as AB 1290,
required redevelopment project areas adopted in 1994 and afterwards to "pass-through"
or give back 25% of this tax increment to the local agencies affected by a formation of the
project area. This percentage is applied against the amount that remains after setting aside
the portion that goes toward low and moderate income housing. Being an affected local
agency, the City of Cupertino can also receive its share of the pass-through, however AB
1290, as written into California Health & Safety Code Section 33607.5, requires that the
City Council must make an election to do so.
Since the adoption of the Cupertino Vallco Redevelopment Project Area in 2000, the
Agency has been giving the City its share of the property tax increment pass-through,
ranging from $60 to $300 per year. However, up to now, the City Council had never
formally elected to receive this increment, as required by State law. The attached
resolution will make this election.
FISCAL IMPACT
Adopting the resolution will not change the amounts of property tax pass-through given
currently to the City, schools, special districts and the County. If the City does not adopt
the resolution, then the County will reallocate the City's share of the pass-through to
these other local agencies on a prospective basis.
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Printed on Recycled Paper
RECOMMENDATION
Adopt Resolution No. 06- II { . electing that the City shall receive its share of property
tax. increment pass-through for each year that the Redevelopment Agency is required to
make such a payment.
Submitted by:
Approved for submission:
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David R. Woo
Finance Director
David W. Knapp
City Manager
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RESOLUTION NO. 06--117
DRAFT
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CUPERTINO MAKING AN ELECTION TO RECEIVE PAYMENTS
PURSUANT TO HEALTH AND SAFETY CODE SECTION 33607.5 (b)
FOR THE CUPERTINO V ALLCO REDEVELOPMENT PROJECT
WHEREAS, the Redevelopment Agency of the City of Cupertino ("Agency")
adopted the Redevelopment Plan (the "Redevelopment Plan") for the Cupertino Vallco
Redevelopment Project on August 21, 2000; and
WHEREAS, Section 33607.5(a)(l) of the Health and Safety Code provides that if
an Agency adopts a Redevelopment Plan on or after January 1, 1994, then the Agency
shall make payment to affected taxing entities required by Section 33607.5; and
WHEREAS, the amounts required pursuant to subdivisions (b), (c), (d) and (e) of
Section 33607.5 must be paid to each affected taxing entity, including the City, ifthe City
elects to receive such tax increments; and
WHEREAS, the City of Cupertino is an affected taxing entity under Section
33607.5;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF CUPERTINO that pursuant to Health and Safety Code Section 33607.5, the
City Council hereby elects to receive its share of the twenty-five percent (25%) tax
increment pass-through payment authorized by Health and Safety Code Section
33607 .5(b), commencing with the first fiscal year the Agency is required to make such
payments to the affected taxing entities and continuing each year thereafter.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Cupertino this 20th day of June 2006, by the following vote:
Vote
Members of the Citv Council
YES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
APPROVED:
City Clerk
Mayor, City of Cupertino
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