Redevelopment Dissolution

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DISSOLUTION OF CHINO REDEVELOPMENT AGENCY

INTRODUCTION

The Chino Redevelopment Agency was activated by the City Council in 1972 to eliminate blight and revitalize the economic conditions of the City. For over 40 years, the Agency carried out this mandate by rehabilitating existing developments, attracting new businesses, and expanding public benefits.

2011 STATE BUDGET

On June 29, 2011 the Governor signed into law the State’s FY 2011-12 budget along with several budget trailer bills including AB x1 26 and AB x1 27, directly impacting over 400 Redevelopment Agencies across the State to make one of the following choices: 1) cease to exist, or 2) make payments for the right to exist. Lawsuits were subsequently filed and the matter taken to the California Supreme Court (the “Court”).

On December 29, 2011, the Court delivered its decision in the California Redevelopment Association v. Matosantos case, finding the provisions of AB x1 26 (the “Dissolution Act”) constitutional and AB x1 27 (the “Alternative Redevelopment Program Act”) unconstitutional. This ruling puts in motion the dissolution and winding down of every California redevelopment agency, and provides upcoming milestones for implementation of the Dissolution Act.

SUMMARY OF COURT DECISION AND REASONING

I. The Decision

The Court’s bifurcated decision means that all RDAs will be dissolved under the constitutional Dissolution Act, and none will have the opportunity to opt into continued existence under the unconstitutional Alternative Redevelopment Program Act.

II. The Court’s Reasoning

The Court found the Dissolution Act constitutional because the Legislature has the broad power to establish or dissolve local agencies as it sees fit. The Court found the Alternative Redevelopment Program Act unconstitutional concluding that the continuation payments required under the Alternative Redevelopment Program Act were not in fact “voluntary” and thus violate the prohibitions in the California Constitution (Proposition 22) related to the enactment of any laws that require RDAs to shift funds to schools or other agencies.

The Court held that the Dissolution Act and the Alternative Redevelopment Program Act are severable from one another because of the differences in the application of the severability clauses of each bill and because large parts of the Dissolution Act are independently enforceable despite the Court’s finding that the Voluntary Program Act is unconstitutional.

Finally, the Court reformed and revised the effective dates or deadlines for performance under the Dissolution Act, calling instead for those dates and deadlines to be advanced four months from the dates specified in the Dissolution Act.

CHINO REDEVELOPMENT HISTORIC PERSPECTIVE

Since 1972, redevelopment has actively provided benefits to the Chino community. The Agency’s goals of removing blighting influences, stimulating private development and improving the quality of life for residents and property owners have been met in a variety of projects. Job creation, business growth and a commitment to affordable housing have been the focal point of Chino’s redevelopment success.

Since its inception, redevelopment in Chino has succeeded in providing classic and meaningful benefits to the residents and property owners of the community. In downtown Chino alone, redevelopment has transformed a once blighted downtown into a vibrant renewed place of activity. Downtown redevelopment projects include the 104–unit Senior Housing development, the Fred Aquiar downtown park, the Chino Youth Museum, the remodel of the 7th Street Community Theatre, Chaffey College Education and Information Technology Centers, the Transit Center, the Tomlinson building renovation and the historic Gray Building preservation.

Redevelopment assisted with the Ayala Regional Park expansion, provided funding for a new full service community college campus and related educational resources, replaced and repaired deteriorating infrastructure and provided assistance to small businesses. In 2010, redevelopment funded the construction of two new fire facilities at 5078 and 5092 Schaefer Avenue and 5980 Riverside Drive. In addition, redevelopment funded the construction of the Chino Police Headquarters Facility at the former Home Depot site at 5450 Walnut Avenue. These vital public projects alone have resulted in an investment of over $42 million back into the Chino economy, while creating over 600 hundred construction jobs.

Redevelopment has had a positive impact to Chino residents and businesses through street improvements; traffic signals; park expansion; public art; directional signs; entry monument signs; bus shelters; public parking lots; and other improvements. In addition, the Redevelopment Agency has partnered with businesses on projects to enhance the community through the provision of new retail opportunities and assistance to over 300 Chino homeowners through the Agency’s Home Improvement Loan Program. Through the actions of the Chino Redevelopment Agency, several thousand local jobs have been created while retail activity in the redevelopment areas continues to generate millions of dollars in annual sales tax revenue to the City.


CITY OF CHINO AS SUCCESSOR AGENCY TO THE CHINO REDEVELOPMENT AGENCY

Redevelopment Agencies

Effective February 1, 2012, redevelopment agencies are dissolved and replaced with successor agencies responsible for winding down the affairs of the former redevelopment agency including disposing of their assets and continued payments of enforceable obligations pursuant the Enforceable Obligation Payment Schedule (EOPS) adopted by the former redevelopment agency until a Recognized Obligation Payment Schedule (ROPS) is prepared by the successor agency, certified by the county auditor-controller and approved by the oversight board.

Enforceable obligations consists of bonds, loans, payments required by governments (except pass-through payments), court judgments and settlements, legal contracts and agreements and contracts necessary for continued administration.

Successor Agency

On January 2, 2012, the City Council elected to become the successor agency of its former redevelopment agency. The City, as successor agency, became operative on February 1, 2012. On that date all assets, properties, contracts, and leases of the former redevelopment agency were transferred to the successor agency.

As part of its duties, the successor agency will establish a Redevelopment Obligation Retirement Fund and perform obligations required by the EOPS, maintain reserves, dispose of assets and property, and enforce all rights for the benefit of taxing agencies. The successor agency will continue to oversee development of properties, use bond proceeds to continue funded activities and defease bonds and prepare administrative budgets.

By March 1, 2012 the successor agency must prepare a draft of the Recognized Obligation Payment Schedule (ROPS) for payments through July 1, 2012. From May 1, 2012 forward only payments listed on the ROPS may be made by the successor agency.