City of Culver City, California
City Council Agenda Item Report
RECOMMENDATION:
Staff recommends that the Culver City City Council (the “Council”) introduce for first
reading an Ordinance to amend certain time limits in the Redevelopment Plan for the Culver
City Redevelopment Project.
PROCEDURE
1. Mayor seeks motion to receive and file the affidavits of publication of notices of this
public hearing and correspondence received in response to the public hearing notices.
2. Mayor calls for a staff report and/or poses questions to staff as desired.
3. Mayor opens the public hearing.
4. Mayor seeks motion to close the public hearing after all audience testimony has been
presented.
5. Council discusses the proposed Ordinance to amend certain time limits in the
Redevelopment Plan for the Culver City Redevelopment Project.
BACKGROUND/ DISCUSSION:
In November 1998, the Council and Culver City Redevelopment Agency (the “Agency”)
made extensive amendments to the former three Redevelopment Projects. All three former
project areas were merged into a single project and new territory was added. The former
project areas and the newly added area have since been identified as Component Areas 1
through 3, respectively and the newly added area has been identified as Component Area 4.
The merged and expanded project was re-named the Culver City Redevelopment Project (the
Meeting Date: 09/06/2005 Item Number: PH-1__
AGENDA ITEM: Introduction of an Ordinance Amending Certain Time Limits in
the Redevelopment Plan for the Culver City Redevelopment Project
Contact Person/Dept.: Todd Tipton Phone Number: (310) 253-5783
Fiscal Impact: Yes [ ] No [X] General Fund: Yes [ ] No [ ]
Public Hearing: [X] Action Item: [ ] Attachments: [X]
Public Notification: Taxing Agencies in Component Areas 1, 2 and 3 by mail on August
4, 2005. Publication in the Culver City News on August 25, 2005. Master Notification
List on August 31, 2005.
Department Approval:
Susan Evans 8/30/05
CAO Approval:
John Montanio for Jerry Fulwood 8/31/05
City Controller Approval:
Marlee Chang 8/31/05City of Culver City, California
City Council Agenda Item Report
“Project”). At that time, the Redevelopment Plan for the Project amended the time limits
applicable to Component Areas 1 through 3.
In 2003 as part of the State’s budget package, the California legislature passed SB1045, and
former Governor Davis signed it into law. The legislation requires redevelopment agencies
to pay some of the tax increment funds that ordinarily would be retained by the agencies, into
the Education Revenue Augmentation Fund (“ERAF”) to assist the State in meeting its
budgetary obligations towards public education. For the Agency, this shift represented a loss
of approximately $1.4 million in 2003-2004, $2.1 million in 2004-2005 and $2.1 million in
2005-2006.
To reduce the impact of this loss of income on redevelopment agencies, SB 1045 allowed
redevelopment agencies to amend their Redevelopment Plans to extend certain time limits by
one additional year by ordinance. Pursuant to SB 1045, the City Council extended the time
limits for the four component areas in 2004. The table below compares the original time
limits to the new limits approved by Ordinance No. 2004-001.
Component Area No. 1 Original Limit New Limit
Plan Expiration 2011 2012
Paying Indebtedness & Collecting Tax Increment 2021 2022
Component Area No. 2
Plan Expiration 2011 2012
Paying Indebtedness & Collecting Tax Increment 2021 2022
Component Area No. 3
Plan Expiration 2015 2016
Paying Indebtedness & Collecting Tax Increment 2025 2026
Component Area No. 4
Plan Expiration 2028 2029
Paying Indebtedness & Collecting Tax Increment 2043 2044
As part of the most recent State budget process, the State legislature approved SB 1096 that
continues the ERAF contribution for this budget year and again permitted redevelopment
agencies to extend the time limits for paying indebtedness and receiving tax increment by
ordinance rather than through the normal redevelopment plan amendment process that can
take months to complete. City of Culver City, California
City Council Agenda Item Report
The following table summarizes the extensions that are authorized by SB 1096:
Component Area No. 1 Current Limit Proposed Limit
Plan Expiration July 26, 2012 July 26, 2014
Paying Indebtedness & Collecting Tax Increment July 26, 2022 July 26, 2024
Component Area No. 2
Plan Expiration December 28, 2012 December 28, 2014
Paying Indebtedness & Collecting Tax Increment December 28, 2022 December 28, 2024
Component Area No. 3
Plan Expiration November 28, 2016 November 28, 2018
Paying Indebtedness & Collecting Tax Increment November 28, 2026 November 28, 2028
Component Area No. 4 is not eligible for the extensions pursuant to SB 1096 because its time
limit (2029) was more than 20 years from the date of the ERAF payments, May 10, 2005 and
May 10 2006.
The proposed time extensions are important to the Agency as it considers refinancing tax
increment secured bonds. The additional two year time extensions to receive tax increment
will enable the refinancing to be structured in a manner that will reduce annual debt service
requirements by a significant amount resulting in improved cash flow for the Agency.
ATTACHMENTS:
1. Draft Ordinance No. 2005-0 __ an Ordinance of the City of Culver City, California,
Amending the Redevelopment Plan for the Culver City Redevelopment Project Area to
Extend Certain Time Limits Applicable To The Redevelopment Plan (SB 1096).
MOTION:
That the City Council:
Introduce for first reading, Ordinance No. 2005-0__, an Ordinance of the City of
Culver City, California, Amending the Redevelopment Plan for the Culver City
Redevelopment Project Area to Extend Certain Time Limits Applicable To The
Redevelopment Plan.
MEETING DATE: September 6, 2005
AGENDA ITEM: Introduction of an Ordinance Amending Certain Time Limits in
the Redevelopment Plan for the Culver City Redevelopment
Project
ATTACHMENTS
Pages
1. Draft Ordinance No. 2005-0 an Ordinance of the City of Culver City,
California, Amending the Redevelopment Plan for the Culver City
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Redevelopment Project Area to Extend Certain Time Limits Applicable To
The Redevelopment Plan (SB 1096).ORDINANCE NO. 2005-
AN ORDINANCE OF THE CITY OF CULVER CITY,
CALIFORNIA, AMENDING THE REDEVELOPMENT PLAN FOR
THE CULVER CITY REDEVELOPMENT PROJECT AREA TO
EXTEND CERTAIN TIME LIMITS APPLICABLE TO THE
REDEVELOPMENT PLAN (SB 1096).
WHEREAS, the Slauson-Sepulveda Redevelopment Plan for Project Area
No. 1 was adopted and amended by ordinances of the Culver City Council ("City
Council") on July 26, 1971 (Ord.No.CS-712), June 6, 1977 (Ord.No.CS-892) and
December 11, 1989 (Ord.No.89-034), respectively, (the "Amended Project Area No.1
Redevelopment Plan");
WHEREAS, the Overland-Jefferson Redevelopment Plan, for Project Area
No.2 was adopted and amended by ordinances of the City Council on December 28,
1971 (Ord.No.CS-729), and December 27, 1994 (Ord.No.94-035) (the "Amended
Project Area No.2 Redevelopment Plan");
WHEREAS, the Washington-Culver Redevelopment Plan for Project Area
No.3 was adopted and amended by ordinances of the City Council on November 24,
1975 (Ord.No.CS-862), and December 27, 1994 (Ord.No.94-036) (the "Amended
Project Area No.3 Redevelopment Plan");
WHEREAS, the Amended Project Area No.1 Redevelopment Plan, the
Amended Project Area No.2 Redevelopment Plan and Amended Project Area No.3
Redevelopment Plan (collectively, the "Redevelopment Plans") were merged into the
Redevelopment Plan for the renamed Culver City Redevelopment Project by ordinance
of the City Council on November 23, 1998 (Ord.No.98-014)(the "Redevelopment Plan");
WHEREAS, as part of that merger, former Project Area No.1 was designated
as Component Area No.1, former Project Area No.2 was designated as Component|101010101010101010 10
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28Area No.2 and former Project Area No.3 was designated as Component Area No.3 in
the Redevelopment Plan;
WHEREAS, a new Component Area No.4 was created and added to the Culver
City Redevelopment Project by ordinance of the City Council on November 23, 1998
(Ord.No.98-015);
WHEREAS, pursuant to Health and Safety Code Sections 33333.2(a)(2) and
33333.6(a), the Redevelopment Plan contains a time limit for the effectiveness of the
Redevelopment Plan;
WHEREAS, pursuant to Health and Safety Code Section 33333.2 (a)(3) and
33333.6(b), the Redevelopment Plan contains a time limit for the payment of
indebtedness and receipt of property taxes;
WHEREAS, the California State Legislature has enacted SB 1096, making
various amendments to the Community Redevelopment Law (Health and Safety Code
Section 33000 et seg.);
WHEREAS, Health and Safety Code Section 33333.2(d) and 33333.2(d)(4), as
added by SB 1096, provides that when an agency is required pursuant to Health and
Safety Code Section 33681.12 to make a payment to the county auditor for deposit in
the county's Educational Revenue Augmentation Fund, the legislative body of the
agency may amend, by ordinance, the redevelopment plan to extend the time limits
required pursuant to paragraphs 2 and 3 of subdivision (a) of Health and Safety Code
Section 33333.2 by one year for each year in which a payment is made. In adopting
the ordinance, neither the legislative body nor the agency is required to comply with
Health and Safety Code Section 33354.6, Article 12 (commencing with Health and
Safety Code Section 33450), or any other provision of the Community Redevelopment
Law relating to the amendment of redevelopment plans;
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28I WHEREAS, Health and Safety Code Section 33333.2 applies only to
2 redevelopment plans adopted on or after January 1, 1994;|109| WHEREAS, Component Area No.4 was adopted on or after January 1, 1994;|109| WHEREAS, Health and Safety Code Sections 33333.6(e)(2)(D) and
5 33333.6(e)(3), as added by SB 1096, provide that when an agency is required pursuant
6 to Health and Safety Code Section 33681.12 to make a payment to the county auditor
7 for deposit in the county's Educational Revenue Augmentation Fund, the legislative
8 body of the agency may amend, by ordinance, the redevelopment plan to extend the
9 time limits required pursuant to subdivisions (a) and (b) of Health and Safety Code
10 Section 33333.6 by one year for each year in which a payment is made. In adopting
11 the ordinance, neither the legislative body nor the agency is required to comply with
12 Health and Safety Code Section 33354.6, Article 12 (commencing with Health and
13 Safety Code Section 33450), or any other provision of the Community Redevelopment
14 Law relating to the amendment of redevelopment plans;
15 WHEREAS, Health and Safety Code Section 33333.6 applies only to
16 redevelopment plans adopted on or before December 31, 1993;
17 WHEREAS, Component Area No. 1, Component Area No.2 and Component
18 Area No.3 were adopted on or before December 31, 1993;
19 WHEREAS, the Redevelopment Plan contains a time limit for effectiveness for
20 Component Area No.1 and Component Area No.2. The time limits for effectiveness for
21 Component Area No.1 and Component Area No.2 are less than ten (10) years from
22 June 30, 2005. Under Health and Safety Code Section 33333.6 (e)(2)(D)(ii), the
23 Redevelopment Plan may be amended with respect to the time limits for effectiveness
24 and the time limits for payment of indebtedness and receipt of property taxes.
25 WHEREAS, the Redevelopment Plan contains a time limit for effectiveness for
26 Component Area No.3. The time limit for effectiveness for Component Area No.3 is
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28 -3-1 more than ten (10) years but less than twenty (20) years from June 30, 2005. Under
2 Health and Safety Code Section 33333.6(e)(2)(D)00, the Redevelopment Plan may be
3 amended with respect to the time limit for effectiveness and the time limit for payment
4 of indebtedness and receipt of property taxes.
5 WHEREAS, Health and Safety Code Sections 33333.2(d) and
6 33333.6(e)(2)(D) do not apply to any redevelopment plan if the time limits for the
7 effectiveness of the redevelopment plan established pursuant to Health and Safety
8 Code Sections 33333.2(a)(2) or 33333.6(a) is more than twenty (20) years after the
9 last day of the fiscal year in which a payment is made;
10 WHEREAS, the Redevelopment Plan contains a time limit for effectiveness of
11 the Redevelopment Plan for Component Area No.4. The time limit for effectiveness for
12 the Redevelopment Plan for Component Area No.4 is more than twenty (20) years from
13 June 30, 2005 and therefore, Component Area No.4 is not eligible for the time limits
14 extensions under Health and Safety Code Section 33333.2 (d);
15 WHEREAS, the Culver City Redevelopment Agency (the "Agency") is required to
16 make payments pursuant to Health and Safety Code Section 33681.12;
17 WHEREAS, funds used to make payments to Los Angeles County's ("County")
18 Educational Revenue Augmentation Fund pursuant to Health and Safety Code Section
19 33681.12 would otherwise have been used to pay the costs of projects and activities
20 necessary to carry out the goals and objectives of the Redevelopment Plan;
21 WHEREAS, the Agency and the City Council of the City of Culver City desire to
22 take advantage of the above mentioned provisions of the Health and Safety Code and
23 adopt an ordinance to extend the time limits on the effectiveness of the Redevelopment
24 Plan for Component Area No.1, Component Area No.2 and Component Area No.3 and
25 the time limits for paying indebtedness and receiving property taxes for Component
26 Area No.1, Component Area No.2 and Component Area No. 3; and
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28 -4-WHEREAS, all legal prerequisites to the adoption of this Ordinance have
occurred.
THE CITY COUNCIL OF THE CITY OF CULVER CITY, CALIFORNIA, DOES
HEREBY ORDAIN AS FOLLOWS:
SECTION 1. The City Council hereby finds and determines that all of the
foregoing recitals are true and correct.
SECTION 2. The City Council hereby finds and determines, with respect
to Component Area No.1, Component Area No.2 and Component Area No.3, for fiscal
year 2004-2005, all of the following:
a. During 2004-2005 fiscal year, the Agency, prior to May 10, 2005,
remitted an amount for deposit in the County's Educational Revenue Augmentation
Fund pursuant to Health and Safety Code Section 33681.12.
b. Funds used to make the payment to the County's Educational
Revenue Augmentation Fund pursuant to Health and Safety Code Section 33681.12
would otherwise have been used to pay the costs of projects and activities necessary to
carry out the goals and objectives of the Redevelopment Plan.
c. The Agency is in compliance with the requirements of Health and
Safety Code Section 33334.2 or 33334.6, as applicable.
d. The Agency has adopted an implementation plan in accordance
with the requirements of Health and Safety Code Section 33490.
e. The Agency is in compliance with subdivisions (a) and (b) of
Health and Safety Code Section 33413, to the extent applicable.
f. The Agency is not subject to sanctions pursuant to subdivision (e)
of Health and Safety Code Section 33334.12 for failure to expend, encumber, or
disburse an excess surplus.
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28SECTION 3. The City Council hereby finds and determines, with respect to
Component Area No.1, Component Area No.2 and Component Area No.3, for fiscal
year 2005-2006, all of the following:
a. Agency, prior to May 10, 2006, shall remit an amount for deposit in
the County's Educational Revenue Augmentation Fund pursuant to Health and Safety
Code Section 33481.12. In addition, Agency has sent notice to County of its intent to
remit such amount for deposit in County's Educational Revenue Augmentation Fund. In
furtherance of this obligation, Agency shall immediately set aside an estimated amount
sufficient to cover the payment to the County Auditor-Controller for deposit in the
County's Educational Revenue Augmentation Fund and shall remit such amount prior
to May 10, 2006.
b. The funds proposed to be set aside and used to make the payment
to the County's Educational Revenue Augmentation Fund pursuant to Health and
Safety Code Section 33681.12 would otherwise have been used to pay the costs of
projects and activities necessary to carry out the goals and objectives of the
Redevelopment Plan.
c. The Agency is in compliance with the requirements of Health and
Safety Code Section 33334.2 or 33334.6, as applicable.
d. The Agency has adopted an implementation plan in accordance
with the requirements of Health and Safety Code Section 33490.
e. The Agency is in compliance with subdivisions (a) and (b) of Health
and Safety Code Section 33413, to the extent applicable.
f. The Agency is not subject to sanctions pursuant to subdivision (e)
of Health and Safety Code Section 33334.12 for failure to expend, encumber, or
disburse an excess surplus.
SECTION 4. Amendment of Time Limits. Based upon the above findings and
in accordance with Health and Safety Code Sections 33333.6(e)(2)(D) and
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2833333.6(e)(3), and notwithstanding any other provisions in the Redevelopment Plan,
the City Council hereby amends the Redevelopment Plan by extending the time limits
for plan effectiveness and payment of indebtedness and receipt of property taxes by
two (2) additional years each for Component Area No.1, Component Area No. 2 and
Component Area No.3 only, as stated herein by adoption of this Ordinance, and
thereby establishes the following limitations:
A. Component Area No.1 •
(1) Plan Effectiveness. The term of plan effectiveness for Component
Area No.1 shall expire on July 26, 2014.
(2) Repayment of Indebtedness; Receipt of Property Taxes. Subject
to the provisions of paragraphs (g) and (h) of Health and Safety
Code Section 33333.6, no indebtedness shall be repaid from the
division and allocation of taxes to the Agency from Component
Area No.1 beyond July 26, 2024.
B. Component Area No.2
(1) Plan Effectiveness. The term of plan effectiveness for Component
Area No. 2 shall expire on December 28, 2014.
(2) Repayment of Indebtedness;_ Receipt of Property Taxes. Subject
to the provisions of paragraphs (g) and (h) of Health and Safety
Code Section 33333.6, no indebtedness shall be repaid from the
division and allocation of taxes to the Agency from Component
Area No.2 beyond December 28, 2024.
C. Component Area No.3
(1) Plan Effectiveness. The term of plan effectiveness for Component
Area No.3 shall expire on November 24, 2018.
(2) Repayment of Indebtedness; Receipt of Property Taxes. Subject
to the provisions of paragraphs (g) and (h) of Health and Safety
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28 1 Code Section 33333.6, no indebtedness shall be repaid from the
2 division and allocation of taxes to the Agency from Corn ponent
3 Area No.3 beyond November 24, 2028.
4 SECTION 5. Except as amended herein, the Redevelopment Plan shall
5 remain in full force and effect according to its terms,
6 SECTION 6, All required proceedings and considerations precedent to
7 the adoption of this ordinance have been regularly taken in accordance with applicable
8 law.
9 SECTION 7. The Executive Director of the Agency shall notify the
10 appropriate public entities of the adoption of this ordinance, including all taxing entities
11 as defined in Health and Safety Code Section 33353.2.
12 SECTION 8. The limitations established by this ordinance shall apply to
13 the Redevelopment Plan and may only be amended in the manner required and to the
14 extent permitted by law.
15 SECTION 9. If any section, subsection, subdivision, paragraph, sentence,
16 clause or phrase in this ordinance or any part thereof is for any reason held to be
17 unconstitutional or invalid or ineffective by any court of competent jurisdiction, such
18 decision shall not affect the validity or effectiveness of the remaining portions of this
19 ordinance or any part thereof. The City Council hereby declares that it would have
20 passed each section, subsection, subdivision, paragraph, sentence, clause or phrase
21 thereof irrespective of the fact that any one (1) or more subsections, subdivisions,
22 paragraphs, sentences, clauses or phrases be declared unconstitutional, or invalid, or
ineffective.
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24 SECTION 10. The Mayor of the City shall sign and City Clerk shall attest to
the passage of this ordinance. The effective date of this ordinance shall be thirty (30)
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days from the date of its adoption and prior to the expiration of fifteen (15) days from
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the adoption hereof, the City Clerk, pursuant to Section 512 of the City Charter, shall
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28 ii -8-cause a summary of this ordinance to be published in the Culver City News.
Additionally, the City Clerk shall post a summary of this Ordinance in at least three (3)
public places within the City pursuant to Section 517 of the City Charter.
APPROVED and ADOPTED this
ALBERT M. VERA, Mayor
City of Culver City, California
ATTEST: APPROVED AS TO FORM:
CHRISTOPHER ARMENTA, CAROL A. SCHWAB,
City Clerk City Attorney
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day of , 2005.