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SA - Resolution 28080-SARESOLUTION NO. 28080 -SA RESOLUTION OF THE COUNCIL OF THE CITY OF SANTA ROSA, IN ITS CAPACITY AS SUCCESSOR AGENCY TO THE FORMER REDEVELOPMENT AGENCY OF THE CITY OF SANTA ROSA, APPROVING AND ADOPTING AN ADMINISTRATIVE BUDGET AND RECOGNIZED OBLIGATION PAYMENT SCHEDULE PURSUANT TO HEALTH AND SAFETY CODE SECTION 341770) -(1) WHEREAS, on December 29, 2011, the California Supreme Court issued its final decision in the litigation of California Redevelopment Association v. Matosantos, upholding Assembly Bill xl 26 (codified as Health and Safety Code § §34161- 34191) ( "ABxl 26 ") and invalidating Assembly Bill xl 27 (the legislation that would have permitted redevelopment agencies to continue operation if their sponsoring jurisdiction agreed to make certain payments for the benefit of schools and special districts); and as a result, all California redevelopment agencies were dissolved, effective February 1, 2012; and WHEREAS, pursuant to Health and Safety Code §34173(d), on January 10, 2012, by Resolution No. 28029, the Council of the City of Santa Rosa elected to become the successor agency to the Redevelopment Agency of the City of Santa Rosa ( "Agency "); and WHEREAS, on January 23, 2012, by Resolution No. 1669, the Agency approved and adopted a revised Enforceable Obligation Payment Schedule ( "EOPS ") for the period of January 1, 2012 through June 30, 2012, pursuant to Health & Safety Code § §34169 and 34177; and WHEREAS, on February 28, 2012, by Resolution No. SA- 28048, the City Council, in its capacity as Successor Agency -to the Former Agency, approved a Draft Recognized Obligation Payment Schedule for the period of January 1, 2012 through June 30, 2012; and WHEREAS, Health and Safety Code §341770) requires the successor agency to the former redevelopment agency to prepare an Administrative Budget that includes the estimated amounts for successor agency administrative costs for each six month period and submit it to the oversight board for its approval; and WHEREAS, Health and Safety Code §34177(1), requires the successor agency to the former redevelopment agency to prepare a Recognized Obligation Payment Schedule (ROPS) for each six month period, which sets forth the nature, amount, and source(s) of payment for all "enforceable obligations" of the Agency (as defined by law) to be paid by the successor agency after the Agency's dissolution; and WHEREAS, Health and Safety Code §34177(1)(2)(B) -(C) requires the successor agency to submit the ROPS to the successor agency's oversight board for its approval, and upon such approval, the successor agency is required to submit a copy of the approved ROPS ( "Approved ROPS ") to the Sonoma County Auditor - Controller, the California State Controller, and the State of California Department of Finance, and post the Approved ROPS on the successor agency's website; and Reso. No. 28080 -SA Page 1 of 3 WHEREAS, only payments required pursuant to the ROPS may be made by the successor agency after May 1, 2012, and the county auditor - controller will allocate property tax increment to successor agencies to pay debts listed on the Approved ROPS; and WHEREAS, there is substantial controversy around the application of the enforceable obligations provision, including controversy specifically relating to the retroactive effect of those provisions which invalidate City /Agency obligations entered into by the Agency prior to adoption of ABxl 26. These loans and funding agreements were enacted in accordance with redevelopment law and are legal and binding obligations of the Agency; and WHEREAS, pursuant to Health and Safety Code §34171(d)(2), the new law does not recognize any City loans to the Agency as "enforceable obligations" except for loans made to the Agency within the first two (2) years of the formation of the Agency, or loans that relate to issued securities. Instead, the new law would effectively treat these loans as contributions of funds by the City to the Agency. ABxl 26 directs the successor agency to not make payments on these agreements and loans and to remove them from the EOPS. However, given pending and possible future litigation and legislation to clean up several provisions in ABxl 26, including the provisions relating to agreements and loans between the City and Agency, legal experts recommend continuing to list such obligations on the ROPS. This will provide an opportunity for further clarification of the law and its application as well as for community input, including the oversight board, regarding specific obligations and the unique set of circumstances that each such loan and agreement carries. NOW, THEREFORE, BE IT RESOLVED that the City of Santa Rosa, in its capacity as the successor agency to the former Redevelopment Agency of the City of Santa Rosa, hereby finds and determines: Section 1. Recitals The Recitals set forth above are true and correct and are incorporated into this Resolution by this reference. Section 2. CEQA Compliance The approval of the ROPS through this Resolution does not commit the successor agency to any action that may have a significant effect on the environment. As a result, it does not constitute a project subject to the requirements of the California Environmental Quality Act in that pursuant to CEQA Guidelines Section 15061(b)(3), it is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment; and where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Section 3. Approval of Administrative Budget The successor agency hereby approves and adopts the Administrative Budget, in substantially the form attached to this Resolution as Exhibit B, as required by Health and Safety Code §34171(a) -(b) and §341770). Section 4. Approval of ROPS The successor agency hereby approves and adopts the ROPS, in substantially the form attached to this Resolution as Exhibit A, as required by Health and Safety Code §34177. Reso. No. 28080 -SA Page 2 of 3 Section 5. Transmittal of Administrative Budget and ROPS The City Manager or her designee, on behalf of the Successor Agency, is hereby authorized and directed to undertake any actions as are necessary to carry out the purposes of this Resolution and comply with applicable law regarding the Administrative Budget and ROPS including, without limitation, the execution of documents and all other actions, subject to any minor conforming, technical or clarifying changes approved by the City Attorney. Such actions may include, but are not limited to (1) submitting the Administrative Budget and ROPS to the successor agency's oversight board; and (2) submitting the approved ROPS to the Sonoma County Auditor - Controller, the California State Controller and the State of California Department of Finance, and posting the approved ROPS on the successor agency's website. Section 6. Effectiveness This Resolution shall take effect immediately upon its adoption. IN COUNCIL DULY PASSED this 10th day of April, 2012. AYES: (4) Mayor Olivares, Council Members Bartley, Ours, Vas Dupre NOES: (0) ABSENT: (3) Vice Mayor Sawyer, Council Members Gorin, Wysocky ABSTAIN: (0) ATTEST Y - t LA APPROVED: Deputy City Clerk Mayor APPROVED AS TO FORM: City Attorney Reso. 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