THE REDEVELOPMENT AGENCY OF THE CITY OF SAN JOSE

SUBJECT: first amendment to 2002-03 cooperation agreement between the redevelopment agency and the city FOR THE MERGED AREA REDEVELOPMENT PROJECT related to parkland dedication ordinance fees

RECOMMENDATION

It is recommended that the City Council and Redevelopment Agency Board adopt resolutions approving the First Amendment to the 2002-03 Cooperation Agreement for the Merged Area clarifying the Agency’s obligation to pay the actual amount of in-lieu fees for low-income units under the Parkland Dedication Ordinance and providing that the obligation will carry over to the next fiscal year.

BACKGROUND

In June 2001, the Agency Board and City Council adopted resolutions approving the Parkland In-lieu Fee Low-Income Unit Voucher Program providing for payment by the Agency to the City of subsidized Parkland fees for low-income residential units, and extending the program to fiscal year 2003-04. Payment of the vouchers by the Agency are processed through the annual Cooperation Agreement for the Merged Area Redevelopment Project. Pursuant to those resolutions, the Agency and the City extended Program until July 1, 2004, and the Agency has budgeted and appropriated $12,242,166 for the Program in its FY 2002-03 Merged Area Capital Budget.

ANALYSIS

As a result of the unexpected number of low-income residential units developed this fiscal year, as of mid-January, 2003, vouchers have been processed in the amount of $11,293,150; only $949,016 remains appropriated for the Program for this fiscal year. Additionally, due to the impact of the state budget situation on the Agency’s budget, these remaining funds have been designed as a Category 3 expenditure by the Agency Board and frozen until further Board action.

On March 6, 2003, the City, through its Department of Parks, Recreation & Neighborhood Services, submitted vouchers to the Agency in the amount of $5,269,300 for nine residential projects.

The purpose of this First Amendment is to clarify that the Agency is legally obligated to pay to the City the actual amount of fees incurred under the Program, regardless of the amount budgeted in the Agency’s Capital Budget for any fiscal year. If it is determined that funds are not available at the time the fees are due, the obligation shall accrue and carry over to the next fiscal year.

RICHARD DOYLE

City Attorney/General Counsel

By PATRICIA A. DEIGNAN

Chief Deputy General Counsel