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Exhibit CC 08-02-2011 #35 "Opt In" Alternative Voluntary Redevelopment Program Karen B. Guerin I +e # 33 From: Paul Brophy [pauldbrophy @yahoo.com] Sent: Sunday, July 31, 2011 2:43 PM To: Gilbert Wong; Mark Santoro; Orrin Mahoney; Kris Wang; Barry Chang Cc: David Knapp; Kelly Kline Subject: Proposed Opt -In for Redevelopment Agency Dear Mayor Wong and Councilmembers, I am writing to urge you to vote against the ordinance that would allow the continued existence of the Cupertino Redevelopment Agency. Based on what I believe are optimistic projections (Attachment C of your staff report), $3,821,000 of property tax dollars in the 2011 -15 time period will be diverted away from the general funds of Cupertino, the county, our school districts, and special districts as the result of continuing the redevelopment agency. And where will this money go? $1,333,800 for Administration Expenses $1,069,000 to the state under the terms of the opt -in ordinance. $1,382,000 for Housing Set Aside This leaves a grand total of $32,000 for discretionary proj ect expenses. Attachment C shows a total of $713,000 available for discretionary projects. That pro forma gets from $32K to $713K by a )claiming $13K in interest income, b) having the city's general fund lend $165K to the agency, and c) running down cash balances from $623K to $120K during the five year period. In exchange for this, the city's general fund gives up over $277,000 and the other local governments for whom we depend upon for basic public services forfeit an additional $3.5 million in property tax revenues. Even if the pro forma is accurate and you accept the idea that having a community's citizens subsidizing the owners of a shopping center is a high priority use of limited tax dollars, I would ask you to consider whether providing $713,000 to the owner of Vallco Shopping Center will turn things around there. Even in its embarrassing condition, the mall has recently been sold for an amount in excess of $60 million. Whatever problems exist at the center, handing over money equal to 1% of the center's sale price will not change things. The city can and should cooperate with its owners to bring in more and better tenants but to take away almost $4 million from city and other local government coffers so that the owners can receive inconsequential financial assistance that can not possibly change that center's competitive position makes no sense whatsoever. A dozen years ago, the new mayor of Oakland, Jerry Brown, was elected on a campaign to improve downtown. He described funds available from that city's redevelopment agency to help real estate developers as "free money." A dozen years later, Governor Brown learned that oldest of lessons that there is no such thing and that tax money siphoned off for real estate projects and the endless consultants who make their living off these agencies means that much less money for the basic public functions that our society relies upon. It's not surprising that someone as smart and experienced as he could be fooled, because an entire generation of elected officials and city administrators in California had come to believe that same illusion. I ask you as our elected officials to say that at least in Cupertino, enough is enough, and to let our redevelopment agency die a well deserved death so that property tax monies from future development can go to Cupertino, the county, and our school districts as they were meant to. If any of you have questions regarding the numbers or the analysis here, please feel free to call me at 483 -5539. Sincerely, 1 Cc F -z -1? Y r ' 8/2/2011 J ~ CUPERTINO ff t I x ,1H .................. .. ....._ . .. ......... . CUPERTINO RED VELOPMENT AREA IMMIN ulMr: MtM OIRS na srrwMwa� SWIM g e MAMA saes X res er W�ca MMImcM.Ma 'WATERS fU11M -lM UN OB RKel IlCillll a � MYWLMMN1iN vs avo 1 8/2/2011 , ; f • ' • • !' • : „ 2 - k ; riz •;;; ; , ftt ; ; ; • = ; ; 4 ' - "P' • HI kl,'•••t 2 8/2/2011 4 6 Attsehment C Funds Avdlabla for Non - Housing RsdsvlOpm.M Activities For FNe -Year. 2011 0s 2015 0ellco Redevolopment Project Cupertino, California (Dollars are In 1.0000) Five -Yae 2010 -11 2011.12 2012-13 2013.14 201415 (Al Total Beginning balance 622 998 544 357 0 623 R0v0nuee Gross Tax Increment 1.270 857 893 930 '. 579 7.528 (6408) 6OUSeg Set-APde(2L% Gross T11 531E1 52541 (2235 (232, (3051 1t 3821 Net tax lnaemem 951 642 870 997 1,184 4. IMeresl Intone 7 5 3 2 0 13 Crty Loan 131E 0 0 165 C 1480 Total Funds Available 2.89E 1. 645 1 210 1 .221 1.186 6.262 Rawl Obligations and Administration Expenses Payments to Schools. County ano Special Distrmts (239) (298, 53081 1321, 5545, 11.707, PeymOm on City loan 51.311, 0 0 0 0 513151 Admalrstratwn Expenses (2515 ,280, 12671 :275) 5284, (1 3361 008010 15 to Stale mew, 113) 15461 51341 :139) ■2375 11 069, Total Fixed end Adminisbatlon — 7971 1 51.1011 ,709) :735) i 1 366, (74 Discretionary Project Expenses Ve4co Public Impmvemems 57E) 0 51505 .'485, 0 1713, Total Drscre00nary Project - 7, 0 5150, 9485; 0 17130 Ending Cash Balance 99F 544 357 0 120 120 IAI Assumes lax growth Irwn Rose Both devebpmenl. ,.. .. � i .... .. tip... 3 8/2/2011 :trLl LL 4 \.Hr' v.. . •-• 4 c -/8 -z /J t 35 r::ars�w; ( : • ve. h y_ OFFICE OF ADMINISTRATIVE SERVICES CITY HALL ¢,r 10300 TORRE AVENUE • CUPERTINO, CA 95014 -3202 CUPERTINO (408) 777 -3220 • FAX (408) 777 -3109 MEMORANDUM To: Carol Atwood From: David Woo, Finance Director oa ■- Subject: Agenda Item 35 - RDA Fiscal Impact Supplement Date: August 2, 2011 With Opt -Out and RDA Dissolution • Absorb $200,000 in administrative personnel costs formerly in RDA. • City General Fund will potentially get $21,000 • County, schools, community college, ar.Ld various special districts get $910,000 in FY 2011 -12 With Opt -In and Voluntary Payments • Fund ongoing RDA personnel, legal, audit & study costs — estimated $260,000 in FY 2011 -12. This could be lower depending on clean -up legislation and pending reports. • Receive ongoing housing funds on top of existing Housing Trust agreement - $129,000 for 2011 -12 • Accumulate funds for future public improvement & development projects starting in FY 2014 -15 • K -12 schools and fire district receive $542,000 The above is detailed in the attached table. The table also shows what the other jurisdictions will receive regardless of the opt -in or opt -out decision. Cl 1 / t. - 0 0 0 / k � - - 0 C e a 0 S N S g 0 $ ©c 5 N — N CO / m . o ■ o E a) 4 0 0 OS � o c F CO CO CO n CO 0 c 0 w 0 0 2 7 7 0 n 1 0 w o Nr r 0 r'- CO n CO CO 0 o = N 0) c = 0 0 0 o CO w= N o ci � k� to \I-C (0 1.0LO mow ¥�% 0 / INI o ..i 0 0 E ,- g a- 3\ 0 G 0 0 2\ E 0£ q $ Q 75 r. 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