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CDA Resolution 89-10RESOLUTION NO. 89 - 10 A RESOLUTION OF THE COMMUNITY DEVELOPMENT AGENCY OF THE CITY OF GILROY AUTHORIZING EXECUTION OF A FISCAL AGREEMENT BETWEEN THE DEVELOPMENT AGENCY AND THE GAVILAN COMMUNITY COLLEGE DISTRICT WHEREAS, the Community Development Agency of the City of Gilroy (the "Agency"), and the Gavilan Community College District (the "District") 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 e__t. 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 District in that redevelopment of the Project Area will increase demand for services provided by the District 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 th~ Agency would, but for the agreements set forth in the Agreement, cause a financial burden or detriment to the District in t~at redevelopment of the Project Area will -1- RESOLUTION NO. 89 - 10 increase demand for services provided by the District to ~'ojec~ 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 13th day of June, 1989, by the following vote: AYES: AGENCYMEMBERS: HALE, KLOECKER, MUSSALLEM, PAL~ERLEE and VALDEZ. NOES: AGENCYMEMBERS: None ABSENT: AGENCYMEMBERS: GAGE and HUGHAN APPROVED: L~rry ~u~s~llem, Vice Chairperson ~sanne Stei~m~t~, Agenc~cretary 06/09/89 #030F/B49702 RESOLUTION NO. 89 - -2- EXHIBIT "A" FISCAL AGREEMENT REGARDING GILROY COMMUNITY REDEVELOPMENT PROJECT THIS AGREEMENT (the "Agreement") is made and entered into this 13th~ay of June , 1989, by and between the COMMUNITY DEVELOPMENT AGENCY OF THE CITY OF GILROY (the "Agency"), and the GAVILAN CO~UNITY COLLEGE DISTRICT (the "District"), on the basis of the following facts, understandings and intentions of the parties: RECITALS A. The Agency is in the process of preparing a proposed redevelopment plan (the "Redevelopment Plan") for adoption bv the City Council of the City of Gilroy for the Gilroy Community Redevelopment Project (the "Project") pursuant to the California Community Redevelopment Law (Health and Safety Code, Section 33000, et seq.). B. The proposed Redevelopment Plan contains provisions for the distribution and allocation of property tax revenues derived from property located within the area covered by the Redevelopment Plan (the "Project Area") and allocated to the Agency pursuant to California Health and Safety Code Section 33670(b) (the "Tax Increment Revenue"). C. Section 33401 of the Community Redevelopment Law provides that a redevelopment agency may pay to any taxing -1- agency any amounts of money which, in the Agency's determination, are necessary and appropriate to alleviate any financial burden or detriment caused to such taxing agency by a redevelopment project. D. The Agency has determined that because of the increase in services to be provided by the District due to the increased development caused by the Project, certain actions as set forth below are necessary to alleviate the burden and detriment or potential burden and detriment to the District. E. Pursuant to Health and Safety Code Section 33676(a) (1), the District, by appropriate resolution, has heretofore made the election to receive future property tax revenues generated in the Project Area attributable to increases in the rate of tax imposed for the benefit of the District after the tax year in which the ordinance adopting the Redevelopment Plan becomes effective. This Agreement is not intended in any way to affect the election made by the District pursuant to Health and Safety Code Section 33676(a) (1). F. As permitted by Health and Safety Code Section 33676, this Agreement is entered into by the District in lieu of the election described in Health and Safety Code Section 33676(a) (2), as more fully set forth in Section 7 below. THEREFORE, the Agency and the District agree as follows: AGREEMENTS Section 1. Payments To Alleviate Financial Burden -2- Subject to the limitations of Section 5 below, the Agency shall make payments to the District in accordance with following schedule: Date May 1, 1996 May 1, 1997 May 1, 1998 May I, 1999 May 1, 2000 May 1, 2001 Amount $500,000 120,000 120,000 120,000 120,000 1,950,000 The payments by the Agency shall be made from the sources described in Section 2 below, and shall be deposited in the District Fund described in Section 4 below for use as set forth in Section 4. Section 2. Method of Payment Agency payments to the District pursuant to Section 1 above may be made from any lawful source of revenue available to the Agency. It is anticipated, understood, and agreed by the parties that: (a) all or a substantial portion of the Agency's payments may be made from the proceeds of tax allocation bonds issued by the Agency pursuant to Health and Safety Code Section 33640 et seq. and secured by Tax Increment Revenue; and (b) the interest on any such tax allocation bonds will be exempt from federal income taxation pursuant to Section 103 of -3- the Internal Revenue Code of 1986, as amended, or a successor statute (the "Code"). It is further expressly acknowledged that the provisions of Sections 3 and 4 below have been agreed upon to permit the timely, cost effective issuance of tax-exempt tax allocation bonds so as to generate proceeds sufficient to meet the Agency's payment obligations under this Agreement. Section 3. Priority of Agency's Obligations The obligation of the Agency to make any payment pursuant to this Agreement shall be subordinate to the Agency's obligation to make payments of principal, interest or other amounts on or in connection with bonds, notes or other indebtedness heretofore or hereafter issued by the Agency to finance the implementation of the Redevelopment Plan. An Agency obligation to make payments, pursuant to a reimbursement agreement or similar agreement, to reimburse or otherwise compensate a person or entity who is obligated to make payments of principal, interest or other amount on bonds, notes or other indebtedness issued by the Agency to finance the implementation of the Redevelopment Plan, shall be deemed to be an obligation in connection with such bonds, notes or other indebtedness for purposes of this Agreement. The District agrees to execute and acknowledge any other documentation that may be necessary to give effect to this Agreement, including, but not limited to, the subordination provisions of this Section 3. Section 4. Use of Funds -4- The District shall establish a capital fund (the "District Fund") into which shall be deposited the payments made by the Agency pursuant to Section 1 above. The District shall use the payments made by the Agency and deposited in the District Fund under this Agreement to make capital improvements to, to lease, to construct, or to equip, appropriate District facilities and improvements which benefit residents and employees within or in proximity to the Project Area. The District shall expend funds in the District Fund in a manner that will preserve the tax-exempt status under the Code of any tax allocation bonds issued by the Agency to provide proceeds for making payments to the District under this Agreement, as more fully set forth in Section 2 above. To that end, the District shall comply with applicable requirements of the bond resolution or trust indenture executed in connection with the issuance of any tax-exempt tax allocation bonds and applicable requirements imposed by Agency bond counsel. Section 5. Limitations on Payment Notwithstanding any other provision of this Agreement, no payments shall be made to the District by the Agency: (a) which would exceed the amount, annually, that the District would have otherwise received from property taxes from the Project Area had the Redevelopment Plan not been adopted; or (b) the receipt of which would cause the District to violate its expenditure limitations under Article XIII-B of -5- the California Constitution as certified by the District to the State of California pursuant to State law, regulations and State Department of Education Administrative procedure; or (c) which would be contrary to the provisions of Section 33401 of the Community Redevelopment Law or violate any other provision of the Community Redevelopment Law or the laws of the State of California. · If the operation of subsections (a) or (c) above would prevent the payment in full of any amount scheduled for payment pursuant to Section 1 above, the parties shall meet in good faith, on or about the date such payment is scheduled to be made, to consider and approve an alternative payment schedule that will have substantially the same economic effect as the payment schedule set forth in Section 1, consistent with the limitations of subsections (a) and (c). The approved alternative payment schedule shall be evidenced by an amendment to this Agreement. Any excess amounts under subsection (b) above shall be retained by the Agency for distribution, in the Agency's sole discretion, to other taxing entities or for the purposes of paying indebtedness incurred by the Agency in carrying out the Project. Section 6. Indebtedness of Agency The payments to be made pursuant to this Agreement shall constitute an indebtedness of the Agency incurred in carrying out the Project and a pledging of tax increments from the Project to repay such indebtedness under the provisions of -6- Article XVI, Section 16 of the California Constitution and under the California Community Redevelopment Law. Section 7. Waiver of Section 33676(a) (2) Election The parties agree that this Agreement supersedes any election heretofore or hereafter made or purported to be made by the District pursuant to Health and Safety Code Section 33676(a) (2); that any such-election or purported election shall be null and void and of no further force or effect; and that the District shall receive no payment of Tax Increment Revenue other than as expressly provided in this Agreement or as authorized by the District's separate election to receive the amount specified in Health and Safety Code Section 33676(a) (1), which separate election shall not be modified by the terms of this Agreement. The District shall take such actions as are reasonably necessary to accomplish the waiver of its election under Health and Safety Code Section 33676(a) (2) and to notify the Auditor of the County of Santa Clara or such other responsible County officials as may be appropriate that the District has entered into this Agrement in lieu of its election to receive the amounts permitted by Health and Safety Code Section 33676(a) (2). In the event the County of Santa Clara by error or otherwise makes a payment to the District of funds the District has waived under Section 33676(a) (2), the District shall receive and hold the funds in trust for the Agency. The District shall pay the funds to the Agency and notify the -7- County of Santa Clara in writing that the funds have been paid to the Agency pursuant to this Section 7. Upon receipt of the funds, the Agency shall immediately notify the County of Santa Clara in writing of its receipt of the funds from the District pursuant to this Section 7. Section 8. No Contest of Redevelopment Plan (a) The District acknowledges and agrees that the payments to be provided and the other fiscal mitigation measures to be undertaken by the Agency pursuant to this Agreement will effectively eliminate any financial burden or detriment to the District that might otherwise be caused by the adoption and implementation of the Redevelopment Plan. In consideration of the undertakings of the Agency described in this Agreement, the District shall forego any right or remedy it may have in law or equity to contest the preparation, adoption or validity of the Redevelopment Plan (including without limitation any right or remedy pursuant to the California Environmental Quality Act), and the redevelopment program to be undertaken pursuant to the Redevelopment Plan. The District further declares its support for the efforts of the Agency in connection with preparation, adoption and implementation of the Redevelopment Plan, and agrees to support Plan adoption in the fiscal review committee proceedings. (b) The Agency recognizes the District's agreement not to contest the Redevelopment Plan, as described in subsection (a) above, as good and legal consideration. -8- Section 9. Term of Agreement This Agreement shall be effective as of the date that the ordinance enacted by the City Council of the City of Gilroy adopting the Redevelopment Plan for the Project becomes effective and shall terminate upon the earliest of (a) the expiration of the Redevelopment Plan, (b) the satisfaction of the Agency's payment obliggtions under this Agreement, or (c) the filing of an action in a court of competent jurisdiction or an administrative action by any person or entity challenging the adoption of the Redevelopment Plan or any of the proceedings in connection therewith. In the event such a lawsuit is filed or such an administrative action commences or is taken, the Agency shall not be required to pay the District any amounts due under this Agreement until resolution of such lawsuit or administrative action; provided, however, that in the event such lawsuit or administrative action is finally determined to uphold the validity of the Redevelopment Plan, the Agency shall pay to the District any amounts due to the District pursuant to this Agreement which become due during the pendency of such lawsuit or administrative action. Such payment shall be due to the District as soon as possible after such determination. Following termination, neither of the parties shall have any rights or obligations under this Agreement. Section 10. Obligation to Defend Agreement In the event litigation is initiated attacking the validity of this Agreement, each party shall in good faith -9- defend and seek to uphold the Agreement. The District further agrees to indemnify and hold the Agency harmless in the event that any person or entity not a party to this Agreement (a "third party") seeks to recover from the Agency funds that such third party claims were unlawfully paid to the Districts pursuant to this Agreement. Section 11. State Law This Agreement, and the rights and obligations of the parties hereto, shall be constructed and enforced in accordance with the laws of the State of California. Section 12. Attorneys' Fees In any action which the Agency or the District brings to enforce its rights hereunder, the unsuccessful party shall pay all costs incurred by the prevailing party, including reasonable attorneys' fees. Section 13. Successors and Assigns This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors and assigns. Section 14. Entire Agreement This Agreement constitutes the entire agreement of the parties with respect to the subjects covered herein. -10- IN WITNESS WHEREOF, the Agency and the District have executed this Agreement as of the date first above written. Attest: COMMUNITY DEVELOPMENT AGENCY OF THE CITY OF GILROY Susanne Steinmetz, Agency Secretary By: Larry Mussa!em, Agency Vice Chair Attest: GAVILAN COMMUNITY COLLEGE DISTRICT By: 06/09/89 #B027A/B49702 -11- FISCAL AGREEMENT REGARDING GILROY COMMUNITY REDEVELOPMENT PROJECT THIS AGREEMENT (the "Agreement") is made and entered into this 13thday of June , 1989, by and between the CO~UNITY DEVELOPMENT AGENCY OF THE CITY oF GILROY (the "Agency"), and the GAVILAN CO~UNITY COLLEGE DISTRICT (the "District"), on the basis of the following facts, understandings and intentions of the parties: RECITALS A. The Agency is in the process of preparing a proposed redevelopment plan (the "Redevelopment Plan") for adoption bv the City Council of the City of Gilroy for the Gilroy Community Redevelopment Project (the "Project") pursuant to the California Community Redevelopment Law (Health and Safety Code, Section 33000, et seq.). B. The proposed Redevelopment Plan contains provisions for the distribution and allocation of property tax revenues derived from property located within the area covered by the Redevelopment Plan (the "Project Area") and allocated to the Agency pursuant to California Health and Safety Code Section 33670(b) (the "Tax Increment Revenue"). C. Section 33401 of the Community Redevelopment Law provides that a redevelopment agency may pay to any taxing -1- agency any amounts of money which, in the Agency's determination, are necessary and appropriate to alleviate any financial burden or detriment caused to such taxing agency by a redevelopment project. D. The Agency has determined that because of the increase in services to be provided by the District due to the increased development caused by the Project, certain actions as set forth below are necessary to alleviate the burden and detriment or potential burden and detriment to the District. E. Pursuant to Health and Safety Code Section 33676(a) (1), the District, by appropriate resolution, has heretofore made the election to receive future property tax revenues generated in the Project Area attributable to increases in the rate of tax imposed for the benefit of the District after the tax year in which the ordinance adopting the Redevelopment Plan becomes effective. This Agreement is not intended in any way to affect the election made by the District pursuant to Health and Safety Code Section 33676(a) (1). F. As permitted by Health and Safety Code Section 33676, this Agreement is entered into by the District in lieu of the election described in Health and Safety Code Section 33676(a) (2), as more fully set forth in Section 7 below. THEREFORE, the Agency and the District agree as follows: AGREEMENTS Section 1. Payments To Alleviate Financial Burden -2- Subject to the limitations of Section 5 below, the Agency shall make payments to the District in accordance with following schedule: Date May 1, 1996 May 1, 1997 May 1, 1998 May I, 1999 May 1, 2000 May 1, 2001 Amount $5O0,000 120,000 120,000 120,000 120,000 1,950,000 The payments by the Agency shall be made from the sources described in Section 2 below, and shall be deposited in the District Fund described in Section 4 below for use as set forth in Section 4. Section 2. Method of Payment Agency payments to the District pursuant to Section 1 above may be made from any lawful source of revenue available to the Agency. It is anticipated, understood, and agreed by the parties that: (a) all or a substantial portion of the Agency's payments may be made from the proceeds of tax allocation bonds issued by the Agency pursuant to Health and Safety Code Section 33640 et seq. and secured by Tax Increment Revenue; and (b) the interest on any such tax allocation bonds will be exempt from federal income taxation pursuant to Section 103 of -3- the Internal Revenue Code of 1986, as amended, or a successor statute (the "Code"). It is further expressly acknowledged that the provisions of Sections 3 and 4 below have been agreed upon to permit the timely, cost effective issuance of tax-exempt tax allocation bonds so as to generate proceeds sufficient to meet the Agency's payment obligations under this Agreement. Section 3. Priority of Agency's Obligations The obligation of the Agency to make any payment pursuant to this Agreement shall be subordinate to the Agency's obligation to make payments of principal, interest or other amounts on or in connection with bonds, notes or other indebtedness heretofore or hereafter issued by the Agency to finance the implementation of the Redevelopment Plan. An Agency obligation to make payments, pursuant to a reimbursement agreement or similar agreement, to reimburse or otherwise compensate a person or entity who is obligated to make payments of principal, interest or other amount on bonds, notes or other indebtedness issued by the Agency to finance the implementation of the Redevelopment Plan, shall be deemed to be an obligation in connection with such bonds, notes or other indebtedness for purposes of this Agreement. The District agrees to execute and acknowledge any other documentation that may be necessary to give effect to this Agreement, including, but not limited to, the subordination provisions of this Section 3. Section 4. Use of Funds -4- The District shall establish a capital fund (the "District Fund") into which shall be deposited the payments made by the Agency pursuant to Section 1 above. The District shall use the payments made by the Agency and deposited in the District Fund under this Agreement to make capital improvements to, to lease, to construct, or to equip, appropriate District facilities and improvements which benefit residents and employees within or in proximity to the Project Area. The District shall expend funds in the District Fund in a manner that will preserve the tax-exempt status under the Code of any tax allocation bonds issued by the Agency to provide proceeds for making payments to the District under this Agreement, as more fully set forth in Section 2 above. To that end, the District shall comply with applicable requirements of the bond resolution or trust indenture executed in connection with the issuance of any tax-exempt tax allocation bonds and applicable requirements imposed by Agency bond counsel. Section 5. Limitations on Payment Notwithstanding any other provision of this Agreement, no payments shall be made to the District by the Agency: (a) which would exceed the amount, annually, that the District would have otherwise received from property taxes from the Project Area had the Redevelopment Plan not been adopted; or (b) the receipt of which would cause the District to violate its expenditure limitations under Article XIII-B of -5- the California Constitution as certified by the District to the State of California pursuant to State law, regulations and State Department of Education Administrative procedure; or (c) which would be contrary to the provisions of Section 33401 of the Community Redevelopment Law or violate any other provision of the Community Redevelopment Law or the laws of the State of California. · If the operation of subsections (a) or (c) above would prevent the payment in full of any amount scheduled for payment pursuant to Section 1 above, the parties shall meet in good faith, on or about the date such payment is scheduled to be made, to consider and approve an alternative payment schedule that will have substantially the same economic effect as the payment schedule set forth in Section 1, consistent with the limitations of subsections (a) and (c). The approved alternative payment schedule shall be evidenced by an amendment to this Agreement. Any excess amounts under subsection (b) above shall be retained by the Agency for distribution, in the Agency's sole discretion, to other taxing entities or for the purposes of paying indebtedness incurred by the Agency in carrying out the Project. Section 6. Indebtedness of Agency The payments to be made pursuant to this Agreement shall constitute an indebtedness of the Agency incurred in carrying out the Project and a pledging of tax increments from the Project to repay such indebtedness under the provisions of -6- Article XVI, Section 16 of the California Constitution and under the California Community Redevelopment Law. Section 7. Waiver of Section 33676(a) (2) Election The parties agree that this Agreement supersedes any election heretofore or hereafter made or purported to be made by the District pursuant to Health and Safety Code Section 33676(a) (2); that any such~election or purported election shall be null and void and of no further force or effect; and that the District shall receive no payment of Tax Increment Revenue other than as expressly provided in this Agreement or as authorized by the District's separate election to receive the amount specified in Health and Safety Code Section 33676(a) (1), which separate election shall not be modified by the terms of this Agreement. The District shall take such actions as are reasonably necessary to accomplish the waiver of its election under Health and Safety Code Section 33676(a) (2) and to notify the Auditor of the County of Santa Clara or such other responsible County officials as may be appropriate that the District has entered into this Agrement in lieu of its election to receive the amounts permitted by Health and Safety Code Section 33676(a) (2). In the event the County of Santa Clara by error or otherwise makes a payment to the District of funds the District has waived under Section 33676(a) (2), the District shall receive and hold the funds in trust for the Agency. The District shall pay the funds to the Agency and notify the -7- County of Santa Clara in writing that the funds have been paid to the Agency pursuant to this Section 7. Upon receipt of the funds, the Agency shall immediately notify the County of Santa Clara in writing of its receipt of the funds from the District pursuant to this Section 7. Section 8. No Contest of Redevelopment Plan (a) The District acknowledges and agrees that the payments to be provided and the other fiscal mitigation measures to be undertaken by the Agency pursuant to this Agreement will effectively eliminate any financial burden or detriment to the District that might otherwise be caused by the adoption and implementation of the Redevelopment Plan. In consideration of the undertakings of the Agency described in this Agreement, the District shall forego any right or remedy it may have in law or equity to contest the preparation, adoption or validity of the Redevelopment Plan (including without limitation any right or remedy pursuant to the California Environmental Quality Act), and the redevelopment program to be undertaken pursuant to the Redevelopment Plan. The District further declares its support for the efforts of the Agency in connection with preparation, adoption and implementation of the Redevelopment Plan, and agrees to support Plan adoption in the fiscal review committee proceedings. (b) The Agency recognizes the District's agreement not to contest the Redevelopment Plan, as described in subsection (a) above, as good and legal consideration. -8- Section 9. Term of Agreement This Agreement shall be effective as of the date that the ordinance enacted by the City Council of the City of Gilroy adopting the Redevelopment Plan for the Project becomes effective and shall terminate upon the earliest of (a) the expiration of the Redevelopment Plan, (b) the satisfaction of the Agency's payment obliggtions under this Agreement, or (c) the filing of an action in a court of competent jurisdiction or an administrative action by any person or entity challenging the adoption of the Redevelopment Plan or any of the proceedings in connection therewith. In the event such a lawsuit is filed or such an administrative action commences or is taken, the Agency shall not be required to pay the District any amounts due under this Agreement until resolution of such lawsuit or administrative action; provided, however, that in the event such lawsuit or administrative action is finally determined to uphold the validity of the Redevelopment Plan, the Agency shall pay to the District any amounts due to the District pursuant to this Agreement which become due during the pendency of such lawsuit or administrative action. Such payment shall be due to the District as soon as possible after such determination. Following termination, neither of the parties shall have any rights or obligations under this Agreement. Section 10. Obligation to Defend Agreement In the event litigation is initiated attacking the validity of this Agreement, each party shall in good faith -9- defend and seek to uphold the Agreement. The District further agrees to indemnify and hold the Agency harmless in the event that any person or entity not a party to this Agreement (a "third party") seeks to recover from the Agency funds that such third party claims were unlawfully paid to the Districts pursuant to this Agreement. Section 11. State Law This Agreement, and the rights and obligations of the parties hereto, shall be constructed and enforced in accordance with the laws of the State of California. Section 12. Attorneys' Fees In any action which the Agency or the District brings to enforce its rights hereunder, the unsuccessful party shall pay all costs incurred by the prevailing party, including reasonable attorneys' fees. Section 13. Successors and Assigns This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors and assigns. Section 14. Entire Agreement This Agreement constitutes the entire agreement of the parties with respect to the subjects covered herein. -10- IN WITNESS WHEREOF, the Agency and the District have executed this Agreement as of the date first above written. Attest: COMMUNITY DEVELOPMENT AGENCY OF THE CITY OF GILROY Susanne Steinmetz, 'arry ~us~alem, Agency Secretary Agency Vice Chair Attest: GAVILAN COMMUNITY COLLEGE DISTRICT By: 06/09/89 #B027A/B49702 -11- 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 13th day of June, 1989. (Seal)