Resolution No. 6269478
RESOLUTION NO. 6269
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CYPRESS,
CALIFORNIA, ESTABLISHING AND DECLARING A DEBT OBLIGATION
REPAYMENT POLICY FOR THE CITY OF CYPRESS
WHEREAS, by previous action duly and regularly taken, the City Council of the City of
Cypress ( "City Council" or "City" as appropriate) approved and adopted the Redevelopment
Plan for the Merged, Amended, And Restated Redevelopment Plan ( "Merged Redevelopment
Plan"); and
WHEREAS, the Merged Redevelopment Plan covers certain properties within the City
known as the Cypress Merged and Amended Redevelopment Project Area ( "Merged Project
Area "); and
WHEREAS, the Merged Redevelopment Plan merged the following component areas
into the Merged Project Area:
(1) the Redevelopment Plan for the Civic Center Redevelopment Project
Area, by Ordinance No. 692 adopted on July 19, 1982, as amended by Ordinance No. 813
adopted on April 10, 1989, by Ordinance No. 932 adopted on January 9, 1995, by Ordinance No.
1007 adopted on April 9, 2001, by Ordinance No. 1044 adopted on November 10, 2003, by
Ordinance No. 1056 adopted on April 26, 2004, and by the aforedescribed Ordinance No. 1067
adopted on June 27, 2005 which merged, amended, and restated all of the foregoing as part of the
Merged Redevelopment Plan (hereinafter the "Civic Center Component Area "); and
(2) the Redevelopment Plan for the Lincoln Avenue Redevelopment Project
Area, by Ordinance No. 852 adopted on June 25, 1990, as amended by Ordinance No. 932
adopted on January 9, 1995, by Ordinance No. 1013 adopted on August 27, 2001, by Ordinance
No. 1045 adopted on November 10, 2003, by Ordinance No. 1056 adopted on April 26, 2004,
and by the aforedescribed Ordinance No. 1067 adopted on June 27, 2005 which merged,
amended, and restated all of the foregoing as part of the Merged Redevelopment Plan
(hereinafter the "Lincoln Avenue Component Area "); and
(3) the Redevelopment Plan for the Los Alamitos Race Track and Golf
Course Redevelopment Project Area, adopted by Ordinance No. 851 on June 18, 1990, as
amended by Ordinance No. 932 adopted on January 9, 1995, by Ordinance No. 1014 adopted on
September 10, 2001, by Ordinance No. 1046 adopted on November 10, 2003, by Ordinance No.
1056, adopted on April 26, 2004, and by the aforedescribed Ordinance No. 1067 adopted on June
27, 2005 which merged, amended, and restated all of the foregoing as part of the Merged
Redevelopment Plan (hereinafter the "LART Component Area "); and
WHEREAS, the Cypress Redevelopment Agency ( "Agency ") has been engaged in
activities to execute and implement the Merged Redevelopment Plan pursuant to the provisions
of the California Community Redevelopment Law (Health and Safety Code § 33000, et seq.)
( "CRL "); and
WHEREAS, as part of the 2011 -12 State budget bill, the California Legislature enacted
and the Governor signed, from the 2011 -12 First Extraordinary Session, Assembly Bills 1X 26
and 1X 27 ( "AB 1X 26" and "AB 1X 27 "), requiring that each redevelopment agency be
dissolved unless the community that created it enacts an ordinance committing it to making
certain payments; and
WHEREAS, Health and Safety Code Section 34169, one of the sections added to the
CRL by AB 1X 26, requires the Agency to adopt an Enforceable Obligation Payment Schedule
listing all obligations that are enforceable within the meaning of Health and Safety Code Section
34167(d) [also added to the CRL by AB 1X 26] and to designate an official of the Agency whose
responsibility shall be to provide information and documentation for items listed in the
Enforceable Obligation Payment Schedule; and
WHEREAS, as part of litigation filed directly with the California Supreme Court by the
League of California Cities and the California Redevelopment Agency challenging the
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constitutionality of AB 1X 26 and AB 1X 27, the California Supreme Court has issued a stay of
the enforceability by the State of all of AB 1X 27 and most portions of AB 1X 26; and
WHEREAS, after careful consideration of all the relevant facts and circumstances, the
City Council has determined to exercise its right to "opt -out" of AB 1X 27 and, as a
consequence, the Cypress Redevelopment Agency shall be dissolved; and
WHEREAS, it is the view of City Staff, and agreed to by the City Council, that this
option presents the most value to the City long -term in terms of predictability of funding and the
direct and accelerated dismissal of remaining debt service. Opting to dissolve the Cypress
Redevelopment Agency will allow the City of Cypress to:
• Repay its existing debt obligations sooner; and
• Provide more infrastructure funding; and
• Decrease the amount of financial reporting and auditing; and
• Not be subject to additional potential future State takeaways.
NOW, THEREFORE, the CITY COUNCIL of the CITY OF CYPRESS, California, does
hereby DECLARE, RESOLVE, and DETERMINE as follows:
1. The City Council of the City of Cypress hereby finds and determines that, in the
event the pending litigation(s) challenging AB 1X 26 and AB 1X 27 is resolved
adverse to the interests of the City of Cypress, and the dissolution of the Cypress
Redevelopment Agency and the elimination of tax increment revenue occur, the
City Council hereby determines, as a matter of City policy and practice, to
reclassify the debt due from the Cypress Redevelopment Agency to a "Due From"
receivable from the City General Fund and the Cypress Recreation and Park
District General Fund.
2. In such eventuality, the City Council further finds and determines that such
receivable shall remain in the City's Infrastructure Fund, and a "Due To" liability
shall be established in the City General Fund and the Cypress Recreation and Park
District General Fund.
3. As of the date of this resolution, the Cypress Redevelopment Agency is indebted
to the City of Cypress, pursuant to that certain "Repayment Agreement by and
between the Redevelopment Agency and the City," dated on or about March 23,
2009, in the amount of $25.116 million (including interest thereon).
4. The City Council of the City of Cypress further finds and determines that the
payment of the receivable shall come from the increased property tax revenues to
the General Fund as a result of what was previously "tax increment," and the
same shall be allocated to the City and Park District as property tax.
5. The City Council of the City of Cypress further finds and determines that the first
payment shall be $510,000 per year from the City General Fund, and $475,000
per year from the Cypress Recreation and Park District General Fund. This
amount is expected to grow annually as a consequence of the overall growth in
property tax.
6. The foregoing statement of City Council policy shall become operative, if at all,
only in the event the pending litigation(s) challenging AB 1X 26 and AB 1X 27 is
resolved adverse to the interests of the City of Cypress, and the dissolution of the
Cypress Redevelopment Agency and the elimination of tax increment revenue
occur in fact.
PASSED, APPROVED AND ADOPTED by the City Council of the City of Cypress at a
regular meeting, this 22nd day of August, 2011.
MAYOR 0 HE CITY OF CYPRESS
ATTEST:
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CITY CLERK OF THE CITY OF CYPRESS
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
I, DENISE BASHAM, City Clerk of the City of Cypress, DO HEREBY CERTIFY that
the foregoing Resolution was duly adopted at a regular meeting of the said City Council held on
the 22nd day of August, 2011, by the following roll call vote:
AYES: 5 COUNCILMEMBERS: Bailey, Luebben, Narain, Seymore and Mills
NOES: 0 COUNCILMEMBERS: None
ABSENT: 0 COUNCILMEMBERS: None
CITY CLERK OF THE CITY OF CYPRESS