Approve the Amended and Restated Agreement by and among
the City, Agency and County of Santa Clara, and take necessary action in
connection therewith.
In 1993, an Agreement was entered into among the City,
Agency and County in a settlement of a number of claims that was the subject of
litigation.
Since September 1999, representatives from the City,
Redevelopment Agency and County of Santa Clara have been meeting to discuss
disputes arising out of the 1993 Settlement Agreement.
The parties have reached a tentative agreement, subject
to approval of the respective legislative bodies. The proposed agreement is described below.
1. The
proposed Agreement is premised on the following:
The City and County both recognize that over half of the
population of the County resides in San Jose.
Actions taken by one governmental organization can have financial or
programmatic impacts on another, and activities conducted by one entity often
serve or affect the constituents of another.
Accordingly, the City, County, and Redevelopment Agency agree to work
together for the betterment of the community, in a manner which strengthens and
does not adversely impact their neighborhoods, residents, and service
recipients.
As part of this Agreement, the parties will hold
quarterly meetings to discuss issues of mutual concern. These joint meetings will be attended by the
Mayor of the City and designated Council liaisons, and the Chair of the Board
of Supervisors and designated County liaisons.
The legislative bodies of each shall meet annually to jointly review the
capital budgets of the City, County and Agency.
2. The substantive terms of the Agreement are as follows:
a.
Delegation of Redevelopment Authority
The Agency Board will delegate
to the County Board of Supervisors, the authority to undertake redevelopment
consistent with redevelopment law. All
moneys paid to the County (excluding the pass through under the 1993 Agreement
which is unrestricted) shall be paid in conjunction with that delegation to
expend those funds for redevelopment purposes under the California
redevelopment law.
In addition to the pass through tax increment amounts made to the County pursuant to the 1993 Agreement, the Agency will make an equal (additional) payment to the County in each of the following fiscal years: 2000-2001 (est. $8.5 M, but adjusted as provided below), 2001-2002(est. $9.5 M), 2002-2003 (est. $10.5 M), and 2003-2004 (est. $11.5 M). The source of the payments will be the City’s one-half share of the JPA funds (which monies are unconstrained) and Agency tax-exempt bond proceeds, which are subject to and must be expended in accordance with any state and federal legal restrictions attached to such funds. The Agency will assist the County in identifying or developing projects that will make the most flexible use of the restricted funds.
b.
The City/County Joint Powers Authority
As part of the 1993 Agreement,
a Joint Powers Authority was established to expend certain unrestricted
funds. In Fiscal Year 2000-2001, the
JPA received an estimated $2.27 million.
The current JPA will be will be disbanded at the end of Fiscal Year
2001-02, and the County’s one-half share of amounts presently paid under the
1993 Agreement to the JPA will be paid to the County.
c.
Redevelopment Limit Extension.
The Agreement requires the
County and the City to work together on legislation to extend the time
limitations on plan activity, time for collection of tax increment and
incurrence of debt by the Redevelopment Agency.
The ability to make any
payments to the County after 2004 depends entirely on the Agency’s debt
capacity at that time. The Agency’s
debt capacity is a function of the length of time it can continue to collect
tax increment to repay debt and the growth of assessed value in the Merged
Project Area and interest rates.
Assuming the necessary legislation is adopted, the Agency will delegate
unconditionally to the Board of Supervisors the authority to expend an amount
equal to 20% of the new money proceeds of the Agency’s Non-Housing Set Aside
Tax Allocation Bonds issued during the period between January 1, 2004 through
December 31, 2014, for eligible projects, based upon the following assumptions:
1. the limitation on the last date to collect tax increment
is extended by 25 years;
2. the limitation on the last date to issue debt is
extended 10 years to 2014;
3.
the limitation on the effectiveness of redevelopment
plans is extended so as to allow adequate time for the expenditure of proceeds
from bonds issued within the parameters of 1 and 2 above.
The County will expend these
funds for eligible projects under federal tax law and Redevelopment law
pursuant to its delegated authority.
In the event such extensions
are not implemented by January 1, 2004, only the 1993 payments will
continue. Also, the entire JPA share
will go to County. The additional
payments shall cease, however. It is
important to note that all Agency payments under this proposal are subordinate
to all Agency debt, existing and future.
If, by
January 1, 2004, there is legislation to extend all of the redevelopment time
limits, but not to the extent to meet the above assumptions, the delegation of
authority to the County to expend Agency bond proceeds shall be reduced
accordingly, but shall still be in an amount equal to 20% of the new money
proceeds of the Agency’s Non-Housing Set Aside Tax Allocation Bonds issued
during the extended period. Similarly,
if the Agency’s bonding capacity is increased further, due to any of the above
assumptions being exceeded, the delegation of authority to the County to expend
Agency bond proceeds shall be extended accordingly.
If the
last date to incur debt in the Agency’s Merged Project Area expires in 2014,
the Agency shall make on an annual basis after 2014, an additional payment to
the County in an amount equal to 20% of the growth in tax increment from the
prior year, subordinate to all other Agency obligations.
d.
County to Pay for Full Settlement of All Prior
Claims
The County will pay the City $5.5 million and transfer title to the Asbury Street parcel to the City as full and complete payment of the County’s obligations contained in the 1993 agreement. These include, but are not limited to: Route 87 parking mitigation, Sewer Service and Use Charge, Library Assessment Collection Fee, and Property Tax Administration Fee.
e.
Property Tax Administration Fee
Currently, the County collects property tax administration fees and an amount equal to 1% of sewer service and use charges collected. Beginning with property tax collection for 2001-2002, and each year thereafter, the County will charge City property tax administration fees, and will reduce the charge for collection for Sewer Service and Use or Storm Sewer Fee in an amount equal to .3% of the amount collected.
f. Land Use Restrictions
The current provisions in the 1993 Agreement shall continue as part of this agreement, except that the County may approve permits for the rehabilitation of buildings or the redevelopment of properties which already have urban uses in County pockets without requiring annexation, as long as the new use is not materially more intensive than the current use. In the case of residential uses, County may approve small residential projects (i.e. 20 units or less) without requiring annexation. As to mixed use projects, annexation will not be required where the residential portion is 20 units or less and the commercial portion does not exceed 10% of existing commercial use. Where annexation is required for commercial or mixed use projects, City and County will share equally the sales revenue. It will continue to be the County’s policy of directing urban uses to incorporated areas of the County. As such, City and County shall work towards the annexation of county pockets pursuant to the procedure previously agreed to by the parties.
g. Legal Challenges
The County shall not file any legal challenge with regard to certain specified redevelopment activities including (without limitation) redevelopment plan formation and amendments, the financing of any such redevelopment projects, or the implementation of any redevelopment projects related to the Neighborhood Business Clusters and Strong Neighborhoods Initiative.
The Amended and Restated
Agreement is the culmination of eighteen months of negotiations involving
representatives of the City, Agency and County. It anticipates a new spirit of cooperation among the Agency and
County.
RICHARD DOYLE
City Attorney