July 15, 2011 - City of Pinole
July 15, 2011 - City of Pinole
July 15, 2011 - City of Pinole
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Administrative Report<br />
<strong>July</strong> <strong>15</strong>, <strong>2011</strong><br />
Page 3 <strong>of</strong> 8<br />
26(the "Dissolution Act") and ABx1 27 (the "Voluntary Program Act". The <strong>Pinole</strong> <strong>City</strong> Council<br />
held a special meeting on <strong>July</strong> 12 to discuss both bills and the overall financial impact that the<br />
bills will have on our Redevelopment Agency.<br />
Basically, the <strong>City</strong> Council acting as the Executive Board, is now faced with the decision <strong>of</strong><br />
either “opting out” <strong>of</strong> redevelopment or “Pay to Play” to continue to operate the Agency over<br />
the next 7 years when the project areas conclude.<br />
The California Redevelopment Association is planning on filing a law suit against the State <strong>of</strong><br />
California challenging these bills.<br />
“Opting Out”<br />
ABx1 26 or the Dissolution Act immediately suspends all new Redevelopment activities and<br />
incurrence <strong>of</strong> indebtedness and dissolves Redevelopment agencies ("RDAs") effective<br />
October 1, <strong>2011</strong>.<br />
ABx1 26 also creates successor agencies and oversight boards to continue to address<br />
enforceable obligations <strong>of</strong> an Agency , administer the dissolution and wind down <strong>of</strong> each<br />
dissolved RDA, as well as establishes roles for the County-Auditor Controller, the Department<br />
<strong>of</strong> Finance and the State Controller’s Office in the dissolution process and satisfaction <strong>of</strong><br />
enforceable obligations <strong>of</strong> former RDAs.<br />
If the Agency decides to “opt out”, then the Agency among other things could no longer:<br />
• Incur new indebtedness or other obligations;<br />
• Restructure existing indebtedness and other obligations;<br />
• Make loans or grants;<br />
• Enter into contracts;<br />
• Amend existing agreements, obligations or commitments; or<br />
• Renew or extend leases or other agreements;<br />
• Approve any program, project or expenditure;<br />
“Pay to Play”<br />
AB x 1 27 or the Voluntary Program Act then allows RDAs to avoid dissolution under the<br />
Dissolution Act by opting into an "alternative voluntary redevelopment program" requiring<br />
specific annual contributions to local school and special districts. Our share <strong>of</strong> the payment is<br />
estimated to be $2,668,000 to be paid from redevelopment.<br />
This payment must be made to the County Auditor-Controller beginning in FY <strong>2011</strong>-2012 and<br />
in all succeeding years the RDA's redevelopment program continues to operate. To avoid<br />
dissolution, by November 1, <strong>2011</strong>, the <strong>Pinole</strong> Redevelopment Agency must enact an<br />
ordinance prior to October 1, <strong>2011</strong> that states we agree to comply with the Voluntary<br />
Program, make the payment, and notify the Department <strong>of</strong> Finance, the State Controller and<br />
the County Auditor-Controller that we will comply with the rules set out in the Voluntary<br />
Program.<br />
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