Title
Staff Report for Resolution Appropriating $2,437,273 from the General Fund Economic Uncertainty Reserve Fund for the Purpose of Making a Required Payment to the Alameda County Auditor-Controller Related to the Dissolution of the San Leandro Redevelopment Agency
Staffreport
SUMMARY AND RECOMMENDATIONS
Staff recommends that the City Council approve a resolution appropriating $2,437,273 from the General Fund Economic Uncertainty Reserve Fund for the Purpose of Making a Required Payment to the Alameda County Auditor-Controller. This payment is required pursuant to a determination made by the California Department of Finance as part of the Due Diligence Review process. The payment demand was subsequently upheld by the Superior Court of the State of California.
BACKGROUND
In 2002, the City of San Leandro loaned $2,887,617.44 to the Redevelopment Agency of the City of San Leandro for the purposes of carrying out redevelopment activities in the Plaza Project Area ("Plaza Project Loan"). The loan was memorialized in a December 5, 2002 Promissory Note with an interest rate of six percent and no penalty for pre-payment. The Plaza Project Loan was subsequently confirmed by Redevelopment Agency Resolution No. 2004-011 RDA.
On March 7, 2011, in response to a proposal by the State Legislature to eliminate all redevelopment agencies state-wide, the Redevelopment Agency passed Resolution No. 2011-006 RDA, which authorized full repayment of the Plaza Project Loan. The balance due at the time was $2,137,273.49. Earlier, on January 21, 2011 the Redevelopment Agency also made a regularly scheduled debt service payment on this loan of $300,000, which included both principal and interest.
In June of 2011, the State Legislature adopted Assembly Bill AB x1 26 ("AB 26"), which caused the dissolution of all redevelopment agencies and outlined the process and procedures for winding down their activities and finances. AB 26 included a provision that retroactively ...
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