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2013 10 15 SA MinutesSUCCESSOR AGENCY TO THE LA QUINTA REDEVELOPMENT AGENCY MINUTES TUESDAY, OCTOBER 15, 2013 A regular meeting of the La Quinta City Council in their capacity as Successor Agency to the La Quinta Redevelopment Agency ( "SA ") was called to order at 3:04 p.m. by Chairperson Adolph. PRESENT: Agency Members Evans, Franklin, Henderson, Osborne, Chair Adolph ABSENT: None PUBLIC COMMENT — None CLOSED SESSION 1. CONFERENCE WITH LEGAL COUNSEL, EXISTING LITIGATION PURSUANT TO GOVERNMENT CODE SECTION 54956.9(a), CITY OF LA QUINTA, ET AL. v. MATOSANTOS, ET AL., SACRAMENTO COUNTY SUPERIOR COURT CASE NO. 34- 2013 - 80001485 THE AGENCY RECESSED TO THE JOINT CLOSED SESSION OF THE CITY COUNCIL AND SUCCESSOR AGENCYAT 3:04 P.M. CHAIRPERSON ADOLPH RECONVENED THE SUCCESSOR AGENCY MEETING AT 6:09 P.M. WITH ALL MEMBERS PRESENT. NO ACTIONS WERE TAKEN IN CLOSED SESSION THAT REQUIRE REPORTING PURSUANT TO GOVERNMENT CODE SECTION 54957.1 (BROWN ACT). PUBLIC COMMENT — None CONFIRMATION OF AGENDA Agency Member Evans requested that Consent Item No. 4 be pulled for separate discussion and vote. Agency Members concurred. PRESENTATIONS — None WRITTEN COMMUNICATIONS — None CITY AS SUCCESSOR AGENCY TO RDA OCTOBER 15, 2013 APPROVAL OF MINUTES MOTION — A motion was made and seconded by Agency Members Evans /Franklin to approve the minutes of October 1, 2013 as submitted. Motion passed unanimously. CONSENT CALENDAR 1. RECEIVE AND FILE TREASURER'S REPORTS DATED JULY 31, 2013 AND AUGUST 31, 2013 2. RECEIVE AND FILE REVENUE & EXPENDITURE REPORTS DATED AUGUST 31, 2013 AND INVESTMENT SUMMARY REPORT FOR THE QUARTER ENDING SEPTEMBER 30, 2013 3. APPROVE DEMAND REGISTER DATED OCTOBER 15, 2013 4. (Pulled by Agency Member Evans and moved to the Business section for separate discussion and vote) AUTHORIZE THE EXECUTIVE DIRECTOR TO TRANSFER UP TO $41,431,179 TO THE COUNTY OF RIVERSIDE AUDITOR - CONTROLLER MOTION — A motion was made and seconded by Agency Members Franklin/ Osborne to approve the Consent Calendar as recommended, with the exception of Item No. 4. Motion passed unanimously. BUSINESS SESSION Consent Calendar Item No. 4 — AUTHORIZE THE EXECUTIVE DIRECTOR TO TRANSFER UP TO $41,431,179 TO THE COUNTY OF RIVERSIDE AUDITOR - CONTROLLER Agency Members requested that the Agency Secretary copy their comments from the City Council Meeting Minutes on this same item and insert them here for the record. From the City Council Meeting Minutes of October 15, 2013, Business Item No. 1: Councilmember Evans stated that she could not approve writing a check to the State of California for $41 million without comment. This is another opportunity to plead the City's case against the Governor's method of piecemeal legislation, and reiterate the City's fight to retain the funds it legitimately utilized through written contractual loans from the City's General Fund to the former La Quinta Redevelopment Agency. The City has now received a letter of demand for the $41 million from the State yet the City has not yet received the court's decision on its appeal. Ms. Evans said that CITY AS SUCCESSOR AGENCY TO RDA 2 OCTOBER 15, 2013 although the City's course may be near the end of its track and the City might eventually need to write that check, it is with discontent to say the least. The Council has done everything imaginable legally without stopping the progression of our City, a City that this Council and prior Councils have worked hard to make economically viable and a great place to live, work and shop. She said that sending $41 million to the State would not hinder the Council from continuing its work, but it is running out of options to proceed with some of its goals and objectives. At the 11" hour, when there are no other options, Ms. Evans supports the City Manager in taking necessary actions including releasing the $41 million to the State. She felt it is important for the community to know that this State demand is unfair, but fortunately, the City does have the $41 million to hand over, and the City will still be successful despite that. Councilmember Osborne said that he was in the court room during the appeal hearing and regarding the contractual obligations of the RDA to the City, the judge said that since the loan docs prepared 30 years ago did not have language stating that repayment in full would be due if the RDA was to be dissolved, the City cannot demand repayment now. Mr. Osborne noted that no city would have known 30 years ago that the State would unilaterally dissolve all RDAs and that the State is making up the rules as they go regardless of the State Constitution and the City's rights. It is ludicrous that the State can come in and take $41 million from this community. Councilmember Henderson said that there are 380 redevelopment agencies in the State in similar circumstances and approximately 150 of them have active lawsuits against the State. She said that La Quinta's attorneys have done an excellent job for the City in presenting its legal case; she finds it incredible that after hearing the City legal arguments, the State can disagree with a straight face. Ms. Henderson said that collusion at the State level is obvious and the City must be very careful about every move it makes because the State is still looking for more money. Councilmember Franklin said that the State of California no longer has democracy; it has a demigod who proceeds with whatever he chooses to do. The dissolution of the RDAs could have been done in a more appropriate manner, giving cities time to do what needed to be done. Instead, this law was imposed and the State included a claw -back provision negating transactions preparing for the dissolution. La Quinta is being hit for $41.4 million for being fiscally responsible. It is punitive. The City did nothing illegal. Ms. Franklin said that the City has an option, which is not to pay the $41 million and has contemplated this course of action. However, the State has said that it will withhold payment of the City's portion of property and sales taxes, which is City money, not RDA money. This State action would CITY AS SUCCESSOR AGENCY TO RDA 3 OCTOBER 15, 2013 amount to the comingling of funds, which the State Constitution prohibits. Ms. Franklin would like the record to reflect her incredible fury at having to write this check and her frustration at delaying plans for the City's future because no one knows what the State will pull next. Councilmember Evans said the Council has an obligation to 40,000 residents. The Council prides itself on making good decisions, which is evident based on this money being there. She said the Council would continue to see that this City thrives, finds ways to generate revenue, and hopefully the State will not come up with new ways of taking more City funds to offset their poor management of the State budget. Mayor Adolph said that the City made a great argument showing the legality of its case but the judge chose to support the Governor and fill the deficit the State created rather than do what is best for citizens. Mayor Adolph concluded that as a result of seeing judges in action, he would never again vote for an incumbent State judge. This action hurts the City's economy, its infrastructure, and its development, and this extends beyond La Quinta to all nine cities in the Coachella Valley. He said La Quinta would overcome this and move forward in its typical progressive, yet fiscally conservative way. MOTION — A motion was made and seconded by Agency Members Evans /Franklin to authorize the Executive Director to transfer up to $41,431,179 to the County of Riverside Auditor - Controller. Motion passed unanimously. STUDY SESSION — None DEPARTMENT REPORTS 1. EXECUTIVE DIRECTOR — OVERSIGHT BOARD REPORT Executive Director Spevacek gave a verbal report on the actions of the Oversight Board Meeting of October 2, 2013. ADJOURNMENT There being no further business, it was moved and seconded by Agency Members Evans/ Henderson to adjourn at 6:12 p.m. Motion passed unanimously. Respectfully submitted, t%^ll/l.uVh- SUSAN MAYSELS, Agency Secretary Successor Agency to the dissolved La Quinta Redevelopment Agency CITY AS SUCCESSOR AGENCY TO RDA 4 OCTOBER 15, 2013