2004 AGN FEB 17 I02 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF FEBRUARY 17, 2004 Item #2 TO: Honorable Mayor and City Councilmembers FROM: Candace Cassel, Redevelopment Manage(C6 SUBJECT: Consideration and Approval of an Ordinance Adopting an Amendment to the Existing Redevelopment Plans to Downtown No. 1, Downtown No. 2, Cooley Ranch, Santa Ana River, West Valley and Mt. Vernon Project Areas Concerning Time Limitations for Issuing Debt Pursuant to SB 211. DATE: February 9, 2004 BACKGROUND: In 1964, the City Council of the City of Colton (the "City Council") adopted Ordinance No. 1179, adopting the Redevelopment Plan for the Downtown No. 1 Redevelopment Project Area. This was the first of seven redevelopment project areas in the City, which also included: Downtown No. 2 Project Area (adopted 1965); Cooley Ranch Project Area, as amended (adopted 1975); Santa Ana River Project Area (adopted 1982); West Valley Project Area, as amended, (adopted 1986); Mt. Vernon Corridor Project Area (adopted 1987); and Rancho Mill (adopted 1994). A full list of project areas and their plan adoption dates are presented in Table 1, attached hereto. Table 1 also reflects time limits to incur debt AB 1290, which became effective in 1994, limited redevelopment agencies' ability to incur debt to the later of 20 years following adoption of the redevelopment plan or 2004. As the 2004 financing deadline approached, the California Redevelopment Association sponsored legislation to eliminate the time limit on incurring debt through the adoption of a simple ordinance without undertaking an extensive plan amendment. The ordinance does not require any noticing, hearings or documentation. This legislation, typically referred to as SB 211, permits the City Council to adopt an ordinance that would eliminate the date to incur debt. Amendments to redevelopment project areas made under SB 211, require redevelopment agencies to make statutory pass-through payments to all taxing agencies that the respective project area does not have an existing pass-through agreement with (i.e. the County of San Bernardino, local school districts, San Bernardino Flood Control District, and Municipal Water District). Although passage of SB 211 triggers pass-through payments to varying taxing agencies, pass-through payments are only activated if new projects, which require incurring additional debt, are implemented in the project areas. The amount of the statutory payments required under SB 211 is based on a three -tiered system. The first tier of payments would begin on the first year after which the time limitation was eliminated, and the second tier would begin in the eleventh year after which the time limitation was eliminated. The first tier payments will consist of 25% of "new" tax increment net of the housing set-aside requirement. "New" tax increment refers only to increases of tax increment above the new base year, which is established at the adoption of this ordinance only for the purpose of calculating pass-throughs triggered by adoption of this ordinance. DISCUSSION/ANALYSIS: By California Law, redevelopment agencies must incur debt to receive tax increment. Examples of debt permissible by law include tax-exempt bonds and owner participation agreements. As shown in Table 1, the last date for the Redevelopment Agency for the City of Colton (the "Agency") to