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CDA Resolution 89-8ARESOLUTION NO. 89 - 8 '~
A RESOLUTION OF THE COMMUNITY DEVELOPMENT AGENCY OF
THE CITY OF GILROY AUTHORIZING EXECUTION OF A
FISCAL AGREEMENT BETWEEN THE DEVELOPMENT AGENCY AND
THE COUNTY OF SANTA CLARA
WHEREAS, the Community Development Agency of the City of
Gilroy (the "Agency"), and the County of Santa Clara (the
"County") desire to enter into a Fiscal Agreement (the
"Agreement") the terms of which are set forth in the Agreement
attached hereto as Exhibit A and by this reference
incorporated'herein; and
WHEREAS, the Agency has prepared the City of Gilroy
Community Redevelopment Plan (the "Plan")and has submitted
the Plan to the City of Gilroy (the "City") for
consideration and potential adoption in accordance with the
procedures and requirements of the California Community
Redevelopment Law (the "CRL") (Health and Safety Code Section
33000 et.. seq.); and
WHEREAS, the Plan calls for redevelopment of a designated
project area (the "Project Area") within the City pursuant to
the CRL; and
WHEREAS, the parties have determined that the adoption by
the City and implementation by the Agency of the Plan would,
but for the agreements set forth in the Agreement, cause a
financial burden or detriment to the County in that
redevelopment of the Project Area will increase demand for
services provided by the County to Project Area residents.
NOW, THEREFORE, BE IT RESOLVED that the Agency hereby
finds and determines, based on evidence provided at this
meeting, that the adoption of the Plan by the City and
implementation by the Agency would, but for the agreements set
forth in the Agreement, cause a financial burden or detriment
to the County in that redevelopment of the Project Area will
RESOLUTION NO. 89 - 8A
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increase demand for services provided by the County to Project
Area residents.
BE IT FURTHER RESOLVED that the Agency hereby approves
the Agreement described above and authorizes and directs the
Vice Chairperson to execute, on behalf of the Agency, the
Agreement in substantially the form set forth in the attached
Exhibit A, with such changes therein as the Vice Chairperson
may approve, such approval to be conclusively evidenced by the
execution and delivery of the Agreement by the Vice
Chairperson.
Passed and adopted this 15th day of May , 1989, by the
following vote:
AYES: AGENCYMEMBERS: ~A~-g, KLOECKER, PALMERLEE,and MUSSALLEM.
NOES: AGENCYMEMBERS: None
ABSENT: AGENCYMEMBERS: GAGE, VALDEZ and HUGHAN.
APPROVED:
M~ssallem, Vice Chairperson
ATTEST:
./Susanne Steinmetz, Agency S~ary
05/11/89-
~030D/B49702
-2-
I hereby certify that the foregoing is a full, true and correct
copy of a resolution duly passed and adopted by the Community Development
Agency of the City of Gilroy, California, at a meeting thereof, held on the
15th day of May, 1989.
/Secretary
(Seal)
MAY-
8~ 09:1~ T-CO RELATIONS ~1107
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EXHIBIT "A"
AGREEMENT BETWEEN
THE COMMUNITY DEVELOPMENT AGENCY OF THE CITY OF GILROY
AND THE COUNTY OF SANTA CLARA
PuRsuANT TO COMMUNITY DEVELOPMENT LAW AND
HEALTH AND SAPETY CODE SECTION 33000 ET SEQ.
REGARDING ALLEVIATION OF FINANCIAL BURDEN OR DETRIMENT
CAUSED TO COUNTY BY A REDEVELOPMENT AGENCY
This Agreement is made and entered into this 15th day of
May ., 1989, by and between the COM~ITY DEVELOPMENT
AGENCY OF THE CITY OF GILROY, a public body existing pur-
suant to the Community Redevelopment Law, hereinafter
referred to as "Agency", and the COUNTY OF SANTA CLARA, a
political subdivision of the State of california, inclusive
of the County Free Library System, also known as the "Santa
Clara County Library District", hereinafter referred to as
"County":
WHEREAS, Agency has prepared and submitted for consideration
by the City Council of the City of Gilroy a redevelopment
plan entitled "Community Redevelopment Project Area Plan",
hereinafter referred to as the "Plan"; and,
WHEREAS, Agency has made the transmittals required by Sec-
tion 33327 of the Health and Safety Code of the State of
California; and
WHEREAS, County finds that proceeding with the redevelopment
goals and objectives defined in the Plan is in the interest
of the p~blic peace, health, safety and welfare; provided,
that assurances can be provided that the effect of proposed
tax increment financing will not cause a severe financial
burden or detriment on the County; and,
WHEREAS, County is a taxing agency within whose territory
the redevelopment Plan is proposed and has concern over the
potential negative impact of tax increment financing on its
financial situation; and
WHEREAS, Health and Safety Code Section 33401 provides that
a redevelopment agency may pay to any affected taxing agency
any amounts of money which in Agency's determination are
appropriate to alleviate any financial burden or detriment
caused by any taxing agency by a redevelopment agency; and
WHEREAS, County ha~ submitted evidence to Agency identifying
the net increase in the quality and quantity of services
provided by County caused by the proposed redevelopment pro-
ject; and
WHEREAS, Agency has determined that payments of tax
MAY-12-'89 09:14 T-CO RELATIONS ~1107 ~951-03
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increment revenue to County as set forth below are necessary
to alleviate the burden and detriment caused to County by
the redevelopment project; and
WHEREAS, in consideration of this Agreement determining the
obligations of Agency, County is foregoing the right to con-
test the establishment of the Plan, the project area to be
established thereunder (the "Project Area") and the project
to be implemented thereby (the ,,Project").
NOW, THEREFORE, IT IS HEREBY AGREED as follows:
1. Allocation of Tax Increment Revenue. In the event the
proposed Plan--with taX increment financing is adopted for
the Project Area, Agency specifically finds that substantial
evidence exists that County will be caused a financial bur-
den or detriment such that it is necessary that County
receive from Agency each year that the Plan is in effect, a
portion of tax increment revenue allocated to Agency. The
tax increment amount to be provided county each fiscal year
shall be calculated as follows:
A. Through fiscal year 1994-95, or until the amount of
tax increment revenues that would have accrued to
county's General Fund and the County Library Fund in the
absence of tax increment financing pursuant to Section
33670 by Agency cumulatively totals One Million Dollars
($1,000,000), whichever is sooner, County shall not be
provided a portion of the tax increment revenue allocated
to Agency.
B. For each year, or portion thereof, thereafter, Agency
will provide to County that amount of property taxes
actually allocated to Agency, which, in the absence of
the implementation of the Plan and tax increment financ-
ing pursuant to Section 33670 by Agency, otherwise would
have been received by County.
2. waiver b_/ Aqency. Agency hereby waives and relinquishes
to County any right that it might otherwise have in the
respective payments to be made to County under Section 1 of
this Agreement arising under Health and Safety Code Section
33670(b).
Agency and County hereby request and direct the County
Auditor-Controller to allocate and pay directly to County
the sums as determined in Section 1, above, rather than to
Agency prior to payment to County.
It is intended by the parties that by Agency's waiver of its
rights to be allocated and paid the aforesaid portions of
MAY-~
09:15 T-CO RELATIONS ~1107
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the levied taxes, and the parties' direction that such por-
tions of the levied taxes De paid directly to County as set
forth above, that such portions of the levied taxes not be
considered to have been received, constructively or other-
wise, by Agency, or to be revenues of Agency, or an indebt-
edness of Agency required to be set forth in any Agency
statement thereof filed pursuant to Health and Safety Code
Section 33675(b).
If, pursuant to court order, such waiver and relinquishment
by Agency is declared invalid, then Agency agrees that it
will claim the amounts it is obligated to pay pursuant to
this Agreement on its Statements of indebted~ess filed with
the County Auditor-Contoller pursuant to Health and Safety
Code Section 33675, and will pay the amounts owing to County
i~mediately following receipt of funds pursuant to the
statement of indebtedness and Health and Safety Code Section
33670.
If, in any fiscal year, the ~iaim on a statement of indebt-
edness of the amounts owing pursuant to this Agreement cause
Agency to incur monetary obligations as the result of statu-
tory requirements, and the a~ount of such obligations for
that fiscal year, when added to the amount owing u~der this
Agreeement for that fiscal year and the debt service for
that fiscal year on indebtedness to which Agency's payment
obligations under this Agreement are subordinate pursuant to
Section 3, below, is in excess of the amount of tax incre-
ment payable to Agency for that fiscal year pursuant to
Health and Safety. Code Section 33670, then the a~ount Agency
is required to provide to County pursuant to this Agreement
for that fiscal year may be reduced by the amount necessary
to pay in full such monetary obligations and such debt ser-
vice. Any such reduction shall be treated as an advance by
County which shall be repaid by Agency. The unpaid princi-
pal balance thereof shall bear interest at the rate paid by
the State of california Local Agency Investment Fund or its
successor entity. The advances and accrued interest shall
be repaid as promptly as possible, and in any event Agency
shall use all tax increment revenue available to it, after
payment of the principal and interest on the indebtedness
and payment of any other monetary obligations tO which the
subordination applies, to repay such advances and accrued
interest.
3. Subordination. Agency may request County to subordinate
its' rights to payments under this Agreement to allow Agency
to pledge all or any portion of the tax increment revenue
otherwise allocated to County under this Agreement in order
to secure repayment of Agency long-term indebtedness
incurred for the Project. For the purposes of this
MAY-i~ 89 09:16 T-CO RELATIONS ~1109 1-05
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Agreement "long-term" shall mean in excess of two years, and
"indebtedness" shall not include any indebtedness of Agency
to the City of Gilroy or other governmental agency con-
trolled by' Agency or by the City of Gilroy.
County agrees that its' approval of such request will not be
unreasonably withheld provided that Agency first demon-
strates to County's satisfaction Agency's anticipated abil-
ity to repay such indebtedness incurred for the Project
without demand being made on the payments due to County
under the terms of this Agreement. Such demonstration by
Agency shall show that the subordinated revenue will be used
in the cash-flow of the financing only for additional secu-
rity (debt service COVerage) and that tax increment revenue
will be adequate, over the term of the indebtedness, to pay
one hundred percent (100%) of actual debt service thereon,
to pay Agency'~ obligations under this Agreement, and to pay
any other obligations of Agency whether statutory or con-
tractual which are or would be superior to Agency's obliga-
tions under this Agreement. Any such demonstration shall
include, without limitation, revenue forecasts and debt ser-
vice schedules.
If, as a result of the subordination provided for in this
Section 3, payments to County are reduced below the amount
otherwise payable to County pursuant to this Agreement, then
such reductions shall be treated as an advance by County
which shall be repaid by Agency. The unpaid principal bal-
ance thereof shall bear interest at the rate paid by the
State of California Local Agency Investment Fund or its suc-
cessor entity. The advances and accrued interest shall be
repaid as promptly as possible, and in any event Agency
shall use all tax increment revenue available to it, after
payment of the principal and interest on the indebtedness to
which the subordination applies and payment of any other
obligations which are superior to Agency's obligations under
this Agreement (including statutory obligations, such as
Agency's housing set-aside obligation under Health and
Safety Code Section 33334.2), to repay such advances and
accrued interest.
4. Limitations 0.~ Allocations. Notwithstanding any other
provision of this Agreement, no moneys shall be provided to
County pursuant to this Agreement:
(a) Which would exceed t_~e annual amount that County
would have otherwise received from the Projec: Area had
t/%e Plan not been adopted; or
(b) Which would be contrary to the provisions of Health
and Safety Code Section 33401 or violate any other
MAY-
09:17 T-CO RELATIONS ~1107
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provisions of law.
Any excess-amounts under subdivisions (a) or (b) above shall
be retained by Agency for distribution for the purposes of
paying indebtedness incurred by Agency in carrying out the
Plan and the Project.
If allocations to be provided County under terms of this
Agreement would cause County to exceed its' expenditure lim-
itation under Article XIII B of the California Constitution,
County agrees to negotiate with Agency regarding a "pass-
through" of property tax revenues to Agency. It is recog-
nized that this negotiation may not be concluded satisfac-
torily. It is further recognized that County may negotiate
with other agencies and may exercse other options with
respect to the expenditure limitation and County's collec-
tion of property tax revenues.
5. Section 33676(~)(~) Election Superseded. AgenCy ack-
nowledges, with respect to the Plan, that County is allo-
cated revenue imposed by existing and prospective rates of
tax imposed for the benefit of County.
County acknowledges, with respect to the Plan, that thi~
Agreement supersedes election of Health and Safety Code Sec-
tion 33676(a)(2) and that County shall not be provided with
portions of tax increment revenue or other moneys from
Agency other than as expressly provided in this Agreement.
6. P~rchase of Municipal Court. Agency will purchase from
Couhty the ~mprovements known as Municipal Court, Gilroy
Facility, 7350 Rosanna Street, Gilroy, at its unencumbered
fair market value as of the transfer date. Such purchase
shall be made within one year after County determines the
property is surplus. The property shall be conveyed to
Agency free of all encumbrances except as otherwise approved
by Agency.
7. Elimination of Financial Burden; No Contest of P~.
County acknowte~%es and agrees that the Obligations to be
undertaken by Agency pursuant to this Agreement will effec-
tively eliminate any financial burden or detriment to County
that would otherwise be caused by the adoption and implemen-
tation of the Plan. In consideration of this Agreement set-
ting forth the obligations of Agency, County, and all other
district, boards and funds for which the Santa Clara County
Board of Supervisors constitutes or appoints the governing
body, are withdrawing any o?position to and foregoing any
right or remedy they may have in law or equity to contest
the preparation, adoption or validity of the Plan, and the
implementation of the Project contemplated to be undertaken
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pursuant to the Plan.
8. Entire ~Aqreement. This document represents the entire
and integrated agreement between Agency and County and
supersedes all prior negotiations, representations, or
agreements, either written or oral. This document may be
amended only by written instrument signed by both Agency and
County. All provisions of this Agreement are expressly made
conditions.
IN WITNESS WHEREOF, the.parties 'have executed this Agreement
on the day and year first above written.
COUNTY OF SANTA CLARA
Approved a~/.~o form and
.~' · ' By
" ' Chairperson, Board of supervis°r~
. ¢3 y ounty counse
ATTEST:
Clerk, Board of Supervisors
By
COMMUNITY DEVELOPMENT AGENCY OF
THE CITY OF GILROY
By /s/ LARRY MUSSALLEM
Vice ~-hai'rperson, Community Development
Agency
ATTEST:
Age~ecretarYBy/~~~ ~' j~