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101-Staff Report.pdf
ADMINISTRATIVE SERVICES DEPARTMENT CITY HALL 1010300TORRE AVENUE • CUPERTINO, CA 95014-3255 TELEPHONE: (408)777-3227www.cupertino.org CITYCOUNCIL/REDEVELOPMENTAGENCYSTAFFREPORT Meeting: February 15, 2011 Subject LoanandRepaymentAgreement betweentheCityofCupertinoandtheCity ofCupertino RedevelopmentAgency RecommendedAction A.RedevelopmentAgencyaction-AdoptResolutionNo. 11-01 B.CityCouncilaction-AdoptResolutionNo. 11- Description AdoptcorrespondingresolutionsauthorizingtheCityandAgencytoenterintotheAgreement. Discussion Inordertoreceive propertytaxes,StatelawrequiresthattheCupertinoRedevelopmentAgency (RDA)fileanannualreport showingthe obligations oftheRDA.RDA obligationsconsists of Cityadvancefunding ofRDAexpenditures,lowandmoderateincome housingfund contributions,State payments, propertytaxes passed-throughtolocaljurisdictions,andtax reassessments duebacktotaxpayers. TheRDAcan pay backtheCityafterthe propertytaxes arereceived. TheRDAfinancestheVallco projectarea’s publicimprovementsandadministrative programs describedintheredevelopmentimplementation plan. Theimplementationplanincludes public infrastructureimprovements suchasconstructionandinstallation of streetmodifications,access ramps, drainagefacilities,and streettreesintheVallco projectarea. VallcoShopping Mall has not beenabletomoveforwardwiththeconstruction ofthese improvements duemainlytotheeconomicrecession. Theseinfrastructureimprovementsare withintheCupertinoRedevelopmentAgency boundariesandmeetredevelopmentlawcriteria regardingfundingof publicinfrastructure.In orderto providea potentialcatalystto development intheRedevelopmentarea,theCityandRDAcouldfinancethe publicimprovementsatthe Mall withtheRDAreimbursingtheCityforanyadvancement offunds.Staffwill providea supplemental staffreporttotheCouncilregardingtheinfrastructureimprovementsbyFebruary 11, 2011. TheCityGeneralFundwilladvance $650,000 toward publicinfrastructureimprovementsin 2010-11withtheRDAreimbursingtheGeneralFund oncethetaxesarereceivedthisfiscalyear. TheRDA hasa $350,000taxrollreassessment obligationwhichtheGeneralFundcancarry until theRDAreceivesandpays backthetaxby nextyear.Lastly,RDAhas $252,000in 2010-11 administrativecosts(includingcontractandlegalcosts)thattheGeneralFundisfrontingand whichtheRDAwillreimbursewithtaxeslaterthisyear. Thetotal oftheseis $1,252,000. Toformally documentthearrangement, staffrecommendsthattheRedevelopmentAgencyand theCityexecuteaLoanandRepaymentAgreement.Redevelopmentcounselrecommendedthis routine procedureto supportannualreportingrequirements. FiscalImpact ExecutingtheAgreementallowstheRDAtoreceive $1,252,000 in propertytaxesinfiscalyear 2010-11. TheCityGeneralFundcurrently budgeted $500,000 forRDAadvances, butcan increasetheadvanceto$1,252,000 using undesignatedreserves.ItisanticipatedthattheAgency will pay backtheadvancesafterthetaxesarereceived. _____________________________________ Preparedby:DavidWoo,FinanceDirector Reviewedby:AartiShrivastava,Director ofCommunityDevelopment ApprovedforSubmissionby:DavidW.Knapp,CityManagerandRDAExecutiveDirector Attachments:RedevelopmentAgencyResolution CityCouncilResolution LoanandRepaymentAgreement