HomeMy WebLinkAbout10/16/2002 - STAFF REPORTS (4) DATE: OCTOBER 16, 2002
TO: COMMUNITY REDEVELOPMENT AGENCY
FROM: DIRECTOR OF COMMUNITY AND ECONOMIC DEVELOPMENT AND
DIRECTOR OF FINANCE
APPROVAL OF A BUDGET RESOLUTION APPROPRIATING $130,751 FUNDS TO
COMPLY WITH CHAPTER 1127, STATUTES OF 2002, REQUIRING REDEVELOPMENT
AGENCIES TO SHIFT REVENUES TO K-12 SCHOOLS AND COMMUNITY COLLEGES
IN THE 2002-03 AS PART OF THE STATE BUDGET BALANCING SCHEME
RECOMMENDATION:
It is recommended that the Agency approve a Budget Resolution shifting $130,751
divided between the two Merged Project Areas to comply with the State-mandated
requirement of the Education Revenue Augmentation Fund (ERAF), an effort by the
State of California to balance its own budget.
BACKGROUND:
In the early 1990's, the State of California mandated that redevelopment agencies
in the state shift billions of dollars to K-12 education and community colleges as a
way for the state to balance its own budget and meet its constitutional obligations.
Between FY 1991-92 and 1993-94, the Agency paid over$1,300,000 to this fund.
In addition, the formula for the distribution of property taxes was revised in favor of
the State, to the detriment of cities and counties. The Agency lost millions of dollars
in tax increment that could have been available for projects.
In the late 1990's the State was in better fiscal shape and did not assess direct
ERAF payments. With this year's budget, however, and its$24 billion shortfall, the
State Legislature chose to resurrect ERAF once again. Statewide, it is assessing
redevelopment agencies $75 million, with half the assessment based on gross tax
increment and half based on net tax increment after pass through payments. Palm
Springs owes a total of $130,751 for the two halves of the formula. Based on the
share of gross and net tax increment, the two project areas will pay $74,528 and
$56,223, respectively.
Should the Agency not pay the ERAF, the County Auditor is required by law to
forward the amount to the State after it has deducted it from the City's property tax.
The letter from t e State Department of Finance explaining the statute is attached.
(IOHN S) RAYMOND THOMAS M. KANARR
Directo�of Community & Director of Finance
Economic Development
APPROVED
Executive Director
ATTACHMENTS: r
1. Budget Resolution �
Cwo
2. Letter from State Department of Finance
ENT OT
a' Z
w ❑
o �
{C DEPARTMENT OF GRAY DAVIS, GOVERNOR
C4�,FORN,PFINANCE STATE CAPITOL 0 ROOM 1 1 45 ■ SACRAMENTO CA ■ 9 58 1 4-499C Z WWW.DOF.CA.GOV
OFFICE OF THE DIRECTOR
October 1, 2002
TO ALL REDEVELOPMENT AGENCIES AND
THEIR LEGISLATIVE BODIES:
Chapter 1127, Statutes of 2002, requires redevelopment agencies to shift$75 million in property
tax revenues to K-12 schools and community colleges during the 2002-03 fiscal year. The
Director of Finance is required to determine an amount each redevelopment agency shall
transfer to the Education Revenue Augmentation Fund (ERAF). It further requires the Director
of Finance to notify each redevelopment agency and legislative body of the amount determined.
In accordance with the above,requirements, the attached document provides the amount
determined for your redevelopment agency.
Each agency must allocate the specified amount to the county auditor for deposit into the ERAF
on or before May 10, 2003. If an agency determines that it will not be able to allocate the full
amount required, it must enter into an agreement with its legislative body to fund the difference
between the full amount required and the amount available for allocation by the agency.
If an agency fails to transmit to the county auditor the full amount required, is precluded by court
order from transmitting that amount, or is otherwise unable to meet its full obligation,
Section 33681.8 of the Health and Safety Code requires the county auditor, by no later than
May 15, 2003, to transfer any amount necessary to meet the obligation determined for that
agency from the legislative body's property tax allocation.
If you have any questions regarding this matter, please contact Matt Paulin, Principal Program
Budget Analyst, at (916) 322-2263.
B. TIMOTHY GAGE
Director
By:
BETTY T. YEE
Chief Deputy Director
Attachment
TRANSFERS TO COUNTY ERAF FOR 2002.03 PURSUANT TO HEALTH AND SAFETY CODE 36381.7
Redevelopment Agency Name 2000.01 GrosT
1 Tax Increment Net $37.5 million on Gross Tax $37.5 million on Tax Combined Total to
Increments-Throughs Increment Increment Net of Pass- be Remitted to
_ Throu hs Count ERAF
PALM SPRINGS 4,183,184 2,805,502 73,308 57,442 130,751
e
RESOLUTION NO.
OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY
OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET
FOR THE 2002-03 FISCAL YEAR
WHEREAS Resolution 1177 approving the budget for the fiscal year 2002-03 was adopted on June
5, 2002; and
WHEREAS the Executive Director has recommended, and the Agency desires to approve, certain
amendments to said budget;
NOW THEREFORE BE IT RESOLVED that the Director of Finance is authorized to record inter-
fund cash transfers as required in accordance with this Resolution, and that Resolution 1177,
adopting the budget for the 2002-03 fiscal year is hereby amended as follows:
SECTION 1. ADDITIONS
Fund Activity Account Amount
851 - Merged Area#1 8201 - Debt Service 65013 $74,528
852 - Merged Area#2 8202- Debt Service 65013 $56,223
ERAF Payment
Purpose: To appropriate funds to pay the State of California assessment for the Education
Revenue Augmentation Fund (ERAF)
SECTION 2. SOURCE Fund Balances
Fund Activity Account Amount
851 - Merged Area#1 29301 $74,528
852- Merged Area#2 29301 $56,223
Fund Balance
Adopted this day of 2002
AYES:
NOES:
ABSENT:
ATTEST: COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS
By:
Assistant Secretary Chairman
REVIEWED AND APPROVED AS TO FORM