TITLE
Recommendation to authorize City Manager to notify the Los Angeles County Auditor-Controller that the City of Long Beach and its Redevelopment Agency (Agency) intends to fund the payment required by Section 33690(d) of the California Health and Safety Code using the Agency’s tax increment revenue and housing set-aside in the amount of $29,516,137. (Citywide)
DISCUSSION
On July 28, 2009, Governor Arnold Schwarzenegger signed Assembly Bill 26 (ABX4 26), a budget trailer bill requiring redevelopment agencies statewide to pay a collective $2.05 billion over two years into the Supplemental Educational Revenue Augmentation Fund (SERAF). The bill directed the California Director of Finance (DO F) to allocate $1.7 billion in Fiscal Year 2009-201 0 (FY1 0) amongst the State's redevelopment agencies based on a formula of gross and net tax increment, with the remaining $350 million allocated in Fiscal Year 2010-2011 (FY11). On November 15, 2009, the DOF provided the Long Beach Redevelopment Agency (Agency) with the exact amount of its required FY10 SERAF payment: $29,516,137.
Redevelopment agencies have options for making the FY10 SERAF payment if certain findings are made. If an agency finds that there are insufficient funds to meet the SERAF obligation, ABX4 26 allows that redevelopment agency's host government (Le., a city or county) to make the SERAF payment; or, it may borrow up to 100 percent of its current year low- and moderate-income housing fund allocation, or any moneys in that fund, or both, to make the SERAF payment. Any amount borrowed from the low- and moderateincome housing fund's current year allocation or balance must be repaid on or before June 30, 2015.
In the event that a redevelopment agency, or its host government, cannot or does not make its full SERAF payment by the May 10, 2010 deadline, that agency is subject to what is referred to as the "death penalty" until those payments are made. Specifically, an agency cannot encumber funds or ex...
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