181835 ORDINANCE NO.------- An urgency ordinance authorizing participation in the voluntary alternative redevelopment program pursuant to Part 1.9 of Division 24 of the California Health & Safety Code thereby allowing the continued existence and operation of the community redevelopment agency of the City of Los Angeles, California. WHEREAS, the California State Legislature, in conjunction with its adoption of the 2011-12 State budget, passed Assembly Bill x1 26 (AB 26) and Assembly Bill x1 27 (AB 27), on June 15, 2011, both of which were signed by the Governor on June 28, 2011;and WHEREAS, AB 26 amended various provisions of the Community Redevelopment Law (Health & Safety Code Section 33000, et seq.) (CRL) and added Parts 1.8 and 1.85 (Parts 1.8/1.85) to the CRL which immediately suspended most of the authorities of redevelopment agencies and which provides for their dissolution as of October 1, 2011; and WHEREAS, AB 27 added Part 1.9 to the CRL (Part 1.9) which establishes a Voluntary Alternative Redevelopment Program (VARP) whereby a redevelopment agency may be exempted from dissolution under Parts 1.8/1.85 and may continue to exist and function under the CRL upon the enactment of an ordinance by the legislative body that created the redevelopment agency thereby committing itself to comply with the provisions of Part 1.9 and make annual remittance payments to the County Auditor Controller (County); and WHEREAS, the City of Los Angeles (City) desires to take the necessary actions under Part 1.9 to participate in the VARP to continue the existence of The Community Redevelopment Agency of the City of Los Angeles, California (CRNLA) in order for the CRNLA to continue to redevelop blighted communities, create jobs, improve public facilities and infrastructure and provide affordable housing to low and moderate income persons and families; and WHEREAS, Part 1.9 authorizes the City to enter into an agreement with the CRNLA, whereby the CRNLA would, on an annual basis, transfer tax increment to the City in an amount equal to but not to exceed the amount of the City's remittance payment to the County for the purpose of financing activities within the City's redevelopment area that are related to accomplishing the redevelopment agency project goals; and WHEREAS, Part 1.9 provides that if the City fails to make the required annual remittance payments, then, among other sanctions, the CRNLA may be dissolved under Parts 1.8/1.85; and 1
WHEREAS, Part 1.9 provides that the California Department of Finance is to calculate the amount of the City's remittance for 2011-12, pursuant to a formula set forth therein and that such remittance is to be paid in two equal installments on January 15, 2012, and May 15, 2012; and WHEREAS, the City is to make annual remittance payments to the County on January 15, and May 15, each year thereafter in amounts calculated pursuant to a formula set forth in Part 1.9; and WHEREAS, the California Redevelopment Association, the League of California Cities and others filed a Petition for Writ of Mandate in the California Supreme Court that challenges AB 26 and AB 27 on State Constitutional grounds and seeks to invalidate the legislation and to stay its implementation until the Supreme Court issues a decision on the lawsuit; and WHEREAS, the City Council does not intend, by enactment of this Ordinance or by making any remittance payments to the County, to waive any of its constitutional and/or legal rights and, therefore, reserves all of its rights to challenge the validity of any or all provisions of AB 26 and/or AB 27 in any administrative or judicial proceeding and/or to repeal this Ordinance, without prejudice to the City's right to recover any amounts remitted under Part 1.9; and WHEREAS, the City Council does not intend, by enactment of this Ordinance, to pledge any of its general fund revenues or other assets to make the annual remittance payments required under Part 1.9, but rather that the source of funds for the annual payments to the County be solely from the funds provided to the City from CRA!LA pursuant to the City-CRAILA agreement authorized hereby and in accordance with Part 1.9; and WHEREAS, the City Council does not intend by enactment of this Ordinance to waive any rights of appeal regarding the amount of any remittance payment calculated by the California Department of Finance, as provided in Part 1.9; and WHEREAS, the City Council intends that the City's making of remittance payments be made under protest and without prejudice to the City's right to recover such amounts and interest thereon, in the event that there is a final determination that AB 26 and AB 27 are unconstitutional or otherwise illegal; and WHEREAS, AB 26 by its express terms "suspend[s] various agency activities and prohibit[s] agencies from incurring indebtedness" and it is the clear intent of AB 26 to "[b]ar existing redevelopment agencies from incurring new obligations, prior to dissolution;" and WHEREAS, under AB 26 until the effective date of this Ordinance, CRA!LA cannot legally incur any new monetary or legal obligations or expand any existing 2
monetary or legal obligations or enter into new agreements with any person for any purpose or modify any existing agreements; and WHEREAS, CRNLA is responsible for the maintenance and operation of a significant number of properties in blighted neighborhoods; and WHEREAS, certain contracts necessary for the proper and safe maintenance and operation of CRNLA properties have expired, and, in light of AB 26, the CRNLA is unable to execute contracts to procure a number of critical services that are essential for the immediate preservation of the public peace, health and safety, including property management services for plumbing and other urgent repairs to its properties, fence rentals to secure vacant properties, pest control services, and security services for vacant buildings; and WHEREAS, prior to the effective date of this Ordinance, the CRNLA is unable to continue its efforts to eliminate and prevent blight, including the remediation of buildings and structures that are unhealthy or unsafe to occupy, or properties with hazardous materials; and WHEREAS, due to the prohibition on new demolition contracts under AB 26, several deteriorated properties threaten the health and well being of surrounding communities in that they are havens for crime and risk squatter occupancy that could result in fires or other incidents leading to injury or loss of life, including properties acquired for the Jefferson/Wellington Project in the Mid-City Redevelopment Project Area, the Slauson/Wall Project in the CD9 Redevelopment Project Area and 303 South Pacific Avenue Project in the Beacon Street Redevelopment Project Area; and WHEREAS, prior to the effective date of this Ordinance, CRNLA is not able to proceed with certain hazardous materials remediations, including the removal of an underground storage tank at 1500 West Temple Street, or with a property clean-up at 110 South Boyle Avenue, or to correct serious deficiencies in sidewalks and street lighting in the Crenshaw and Mid-City Redevelopment Project Areas, all of which threaten the public health and safety. NOW THEREFORE, Section 1. Recitals. THE PEOPLE OF THE CITY OF LOS ANGELES DO ORDAIN AS FOLLOWS: The Recitals set forth above are true and correct and are incorporated herein by reference. 3
Sec. 2. Authorization to Participate in Voluntary Alternative Redevelopment Program. Subject to Sections 7 and 8 herein, and to the terms and conditions of an agreement between the City and CRAILA as authorized in Section 3 herein, the City hereby commits to participate in the VARP and to comply with the requirements of Part 1.9 of Division 24 of the California Health & Safety Code, including the making of annual remittance payments to the County, for the purpose of continuing the existence of the CRA!LA to redevelop blighted communities, create jobs, improve public facilities and infrastructure and provide affordable housing to low and moderate income persons and families. Sec. 3. Authorization to Enter Into Funding Agreement with CRAJLA. The City is hereby authorized to enter into a funding agreement with CRAILA whereby CRA!LA agrees to transfer funds to the City in an amount sufficient for the City to make the annual remittance payments to the County pursuant to the VARP and Part 1.9 and to make such transfer of funds no later than 21 days prior to the due dates of the City's payments to the County. Sec. 4. Creation of the VARP Fund. There is hereby created and established within the Treasury of the City of Los Angeles a separate fund to be known as the VARP Trust Fund (Fund). The Fund shall be for the receipt and deposit of the funds from the CRAILA pursuant to the funding agreement, along with any interest earned thereon. Money in the Fund shall be used to make the annual remittance payments to the County pursuant to Part 1.9 and this Ordinance. Payments shall only be made to the extent there are sufficient funds in the Fund. The Fund shall be administered by the City Administrative Officer, who shall make all payments authorized by this Ordinance. Sec. 5. Authorization to Take Other Necessary Actions. The City Administrative Officer is hereby authorized to execute the funding agreement with CRAILA on behalf of the City and to execute any other documents and to take such other actions, including notifying the California Department of Finance, the State Controller and the County Auditor-Controller of the adoption of this Ordinance, as may be necessary for the City to participate in the VARP and to indicate the City's intended compliance with Part 1.9. Sec. 6. Severability. If any provisions of this Ordinance or the application thereof are held by a court of competent jurisdiction to be invalid for any reason, the remainder of this Ordinance and the application of the provisions thereof shall not be affected thereby. 4
Sec. 7. Reservation of Rights. It is the position of the City that certain or all provisions of AB 26 and/or AB 27 violate the California Constitution and are invalid and unenforceable and all payments made under Part 1.9 are made under protest with a full reservation of rights to recover such payments. Neither the adoption of this Ordinance, nor the acknowledgment of or references to any provisions of AB 26 and AB 27, nor the City's payment of any remittances contemplated by AB 27 shall be deemed to be, nor are they intended as, an acknowledgment of the legal validity or enforceability of AB 26 and/or AB 27, and the City reserves all rights in its sole discretion to challenge the validity of any or all provisions of AB 26 and/or AB 27 in any administrative or judicial proceeding. The City further reserves the right to appeal the County's determination of the amount of any remittance payments required to by paid by the City by Part 1.9 and further reserves the right to repeal this Ordinance, without prejudice to the City's right to recover any amounts remitted under Part 1.9. Sec. 8. Effect of Stay. In the event that a court of competent jurisdiction grants a stay regarding the implementation and/or enforcement of Parts 1.8/1.85 and/or 1.9, then the City's remittance payments shall be held in abeyance during the period while such stay is in effect. In the event that a court of competent jurisdiction determines that AB 26 and AB 27 are unconstitutional or otherwise illegal and, therefore, invalid and unenforceable, as of the date that judgment, order or decree becomes final and non-appealable, this Ordinance shall be deemed repealed and of no further force or effect. Sec. 9. Urgency. This Ordinance is hereby declared to be urgently required for the immediate preservation of the public peace, health and safety, and shall take effect immediately upon publication. The following is a statement of facts showing its urgency: The continued existence of public nuisances, including undernolished, vacant property, hazardous sidewalks and street lighting, and unremediated hazardous conditions and the continuing inability of the CRAILA to contract for property maintenance and repair and to address emergency situations, all as described in the Recitals above, constitutes an ever- present fire and health menace and threatens the safety of persons and properties. 5
Sec. 10. The City Clerk shall certify to the passage of this ordinance and have it published in accordance with Council policy, either in a daily newspaper circulated in the City of Los Angeles or by posting for ten days in three public places in the City of Los Angeles: one copy on the bulletin board located at the Main Street entrance to the Los Angeles City Hall; one copy on the bulletin board located at the Main Street entrance to the Los Angeles City Hall East; and one copy on the bulletin board located at the Temple Street entrance to the Los Angeles County Hall of Records. I hereby certify that this ordinance was passed by the Council of the City of Los Angeles, by a vote of not less than three-fourths of all of its members, at its meeting of AUG l 0 2011 1 AUG 1 o 2011 Approved---------- Approved as to Form and Legality Mayor CARMEN A. TRUTANICH, City Attorney By r1io~ CURTISs:KiDER Assistant City Attorney Date f" '1 II File No. \1-01 (,3 6