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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 -1- 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 -02 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 - 2 - 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 - 3 - 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 - 4 - 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 - 5 - 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 - 6 - 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~