BILL ANALYSIS �
AB 2549
Page 1
Date of Hearing: April 9, 2014
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
AB 2549 (Ridley-Thomas) - As Amended: April 1, 2014
SUBJECT : Redevelopment: City of Milpitas.
SUMMARY : Allows the City of Milpitas to organize an independent
local commission to investigate and study the consequences of
the dissolution of redevelopment. Specifically,
this bill :
1)Allows, on or before April 1, 2015, the City of Milpitas to
organize an independent local commission to investigate and
study the consequences of the dissolution of redevelopment on
employment, revenues, and economic activity in order to
identify and recommend ways to raise revenues to increase city
staff to adequate levels, to invest in infrastructure and
development projects, and to increase economic activity in the
McCarthy Ranch area of Milpitas near the Newby Island
landfill.
2)Requires the commission to be comprised of seven (7) people to
be appointed by the City Council of Milpitas, as follows:
a) One member of the business community who is also a
member of the Milpitas Chamber of Commerce;
b) One employee of the City of Milpitas Fire Department;
c) One employee of the City of Milpitas Police Department;
d) One member of a local union that is unaffiliated with
public employee unions representing workers for the City of
Milpitas;
e) One owner of real property within the McCarthy Ranch
area of Milpitas near the Newby Island landfill; and,
f) Two citizens of the City of Milpitas.
3)Requires the commission to elect its own chairperson.
4)Requires the City Manager of Milpitas to be an ex officio
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member of the commission and report on the commission's
activities to the Milpitas City Council.
5)Specifies that the commission's authority shall cease one year
from the formation of the commission.
6)Sunsets the authority of the City of Milpitas to organize an
independent local commission on January 1, 2017, unless a
later enacted statute that is enacted before January 1, 2017,
deletes or extends that date.
7)Finds and declares the need for a special law and that a
general law cannot be made applicable because of the unique
circumstances in the City of Milpitas, where parcels on the
west side of Interstate 880 and to the east of Coyote Creek in
the McCarthy Ranch area of Milpitas near the Newby Island
landfill, the San Francisco Bay area, and the regional water
pollution control plant and the particular challenges to
economic development as a result of their restrictive
location.
8)Makes a number of other findings and declarations related to
the dissolution of redevelopment and the effects on the City
of Milpitas.
EXISTING LAW :
1)Dissolves redevelopment agencies as of February 1, 2012, and
provides for the designation of successor agencies.
2)Requires successor agencies to wind down the affairs of the
dissolved redevelopment agencies.
3)Defines "enforceable obligations."
4)Requires successor agencies make payments due to enforceable
obligations, as specified.
5)Requires each successor agency to have an oversight board of
seven members to approve certain actions of the successor
agency.
6)Requires Department of Finance (DOF) to review the actions of
an oversight board.
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7)Requires DOF to issue a finding of completion to the successor
agency, within five business days, once the following
conditions have been met and verified:
a) The successor agency has paid the full amount as
determined during the due diligence reviews and the county
auditor-controller has reported those payments to DOF;
b) The successor agency has paid the full amount as
determined during the July True-up process; or,
c) The successor agency has paid the full amount upon a
final judicial determination of the amounts due and
confirmation that those amounts have been paid by the
county auditor-controller.
8)Allows the successor agency, upon receiving the finding of
completion, to:
a) Retain dissolved redevelopment agency assets;
b) Place loan agreements between the former redevelopment
agency and sponsoring entity on the Recognized Obligation
Payments Schedule (ROPS), as an enforceable obligation,
provided the oversight board makes a finding that the loan
was for legitimate redevelopment purposes; and,
c) Utilize proceeds derived from bonds issued prior to
January 1, 2011, in a manner consistent with the original
bond covenants.
9)Requires, after DOF issues a finding of completion, the
successor agency to prepare a long-range property management
plan that addresses the disposition and use of the real
properties of the former redevelopment agency, and requires
the report to be submitted to the oversight board and DOF for
approval no later than six months following the issuance to
the successor agency of the finding of completion.
FISCAL EFFECT : None
COMMENTS :
1)Purpose of this bill . This bill allows the City of Milpitas
to organize an independent local commission to investigate and
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study the consequences of the dissolution of redevelopment on
employment, revenues, and economic activity, and specifies the
membership of the commission. The bill is sponsored by the
City of Milpitas.
2)Author's statement . According to the author, "The dissolution
of redevelopment by the state has been devastating in the City
of Milpitas and to its citizens. The City desires to settle
its litigation with the state and with Santa Clara County,
find new revenue sources to replace the funds, restore losses
of firefighters and police officers, maintain and upgrade
critical infrastructure, and generate employment and economic
activity through previously approved private investment. The
City has attempted to form an agency to help it (1) meet its
obligations, (2) replace public safety and other positions
lost in the dissolution process, and (3) spur economic
activity only to be told that State law was ambiguous with
respect to forming a new agency. The City is focused on
encouraging development in a specific area, which presents
certain challenges and would like the Legislature to clarify
that it may form an agency to pursue development in that
area."
3)Redevelopment dissolution in Milpitas . The State Controller's
Office reviewed the asset transfers made by the Milpitas
Redevelopment Agency for the period of January 1, 2011,
through January 31, 2012, and disclosed that the Milpitas RDA
transferred $175,613,510 in assets, including unallowable
transfers of $147,108,600 or 83.77% of the transferred assets.
A letter issued on November 22, 2013, by the Department of
Finance to the City indicates that the balance available for
distribution to the affected taxing entities was being revised
to $40,875,908 plus any interest earned (Finance's final
determination). Current law requires successor agencies to
transmit to the county auditor-controller the amount of funds
identified. The City is unable to receive a Finding of
Completion from DOF until the identified funds are
transferred, and other specified criteria are met.
The City is currently in litigation with the State and the
County of Santa Clara.
4)Is legislation needed ? The Committee may wish to consider
whether legislation is needed to form this independent local
commission. The City could form this commission via
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resolution or ordinance, as long as the City does not grant
the commission any power that would normally be reserved for
the City and its legislative body. In this case, the
commission is only tasked with investigating and studying the
consequences of the dissolution of redevelopment in order to
identify and recommend ways to raise revenues for specified
purposes - the recommendations are not binding, and the City
Council of Milpitas can consider those recommendations and
make its own decision about whether to adopt the
recommendations.
5)Arguments in support . Supporters argue that this bill will
help the City of Milpitas encourage both public and private
investment to secure new public safety positions within the
City.
6)Arguments in opposition . None on file.
REGISTERED SUPPORT / OPPOSITION :
Support
City of Milpitas [SPONSOR]
California Infill Builders Federation
Milpitas Chamber of Commerce
Milpitas Firefighters IAFF Local 1699
Milpitas Police Officers Association
Opposition
None on file.
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958