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LQ & RDA/Remittance Agree 11REMITTANCE AGREEMENT (CALIFORNIA HEALTH AND SAFETY CODE SECTION 34194.2) This REMITTANCE AGREEMENT ("Agreement") is entered into this 20#' day of September_, 2011, by and between the CITY OF LA QUINTA, a California municipal corporation and charter city (the "City"), and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"). The City and the Agency (individually, a "Party," and collectively, the "Parties") enter into this Agreement with reference to the following: RECITALS A. On or about November 29, 1983, the City Council of the City. (the "City Council") approved and adopted the Redevelopment Plan for the La Quinta Redevelopment Project (the "Project Area No. 1 Redevelopment Plan"), covering certain properties located within the City and defined in the Project Area No. 1 Redevelopment Plan as the "La Quinta Redevelopment Project" ("Project Area No. 1 "). The Project Area No. 1 Redevelopment Plan was subsequently amended on or about December 20, 1994, and on or about March 16, 2004. B. On or about May 16, 1989, the City Council approved and adopted the Redevelopment Plan for the La Quinta Redevelopment Project Area No. 2 (the "Project Area No. 2 Redevelopment Plan"), covering certain properties located within the City and defined in the Project Area No. 2 Redevelopment Plan as the "La Quinta Redevelopment Project Area No. 2" ("Project Area No. 2") The Project Area No. 2 Redevelopment Plan was subsequently amended on or about December 20, 1994, on or about February 3, 2004, and on or about March 16, 2004. C. The Project Area No. 1 Redevelopment Plan and the Project Area No. 2 Redevelopment Plan are hereinafter collectively referred to hereinafter as the "Redevelopment Plans," and Project Area No. 1 and Project Area No. 2 are collectively referred to hereinafter as the "Project Areas"). D. The Agency has been and is engaged in activities to execute and implement the Redevelopment Plans pursuant to the provisions of the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.) ("CRL"). .E. Since adoption of the Redevelopment Plans, the Agency has undertaken redevelopment projects in the Project Areas to eliminate blight, to improve public facilities and infrastructure, to renovate and construct affordable' UV015610-ONO 2258772.1 e09/19/11 housing, and to enter into partnerships with private parties to create jobs and expand the local economy. F. Over the next few years, the Agency hopes to implement a variety of redevelopment projects and programs to continue to eliminate and prevent blight, stimulate and expand the Project Areas' economic growth, create and develop local job opportunities and alleviate deficiencies in public infrastructure, and increase, improve, and preserve the City's supply of low and moderate income housing. G. As part of the 2011-12 State budget bill, the California Legislature enacted and the Governor signed, from the 2011-12 First Extraordinary Session, Assembly Bills 26 and 27 ("AB 1 X 26" and "AB 1 X 27"), requiring that each redevelopment agency be dissolved unless the community that created it enacts an ordinance committing it to make certain payments. H. Specifically, AB 1 X 26 prohibits redevelopment agencies from taking numerous actions, effective immediately and purportedly retroactively, and additionally provides that redevelopment agencies are deemed to be dissolved as of October 1, 2011. I. AB 1 X 27 provides that a community may participate in an "Alternative Voluntary Redevelopment Program," in order to enable a redevelopment agency within that community to remain in existence and carry out the provisions of the CRL, by enacting an ordinance agreeing to comply with Part 1.9 of Division 24 of the Health and Safety Code ("Part 1.9"). J. The Alternative Voluntary Redevelopment Program requires that the City agree by ordinance to remit specified annual amounts to the Riverside County Auditor -Controller ("County Auditor"). K. On August 2, 2011, City adopted Ordinance No. 491 ("Ordinance"), thereby agreeing to participate in the Alternative Voluntary Redevelopment Program and to remit specified annual amounts in accordance therewith. L. Pursuant to Health and Safety Code Section 34194.1, in making remittances to the County Auditor pursuant to Health and Safety Code Sections 34194 or 34194.5, the City may use any available funds not otherwise obligated for other uses. M. Pursuant to Health and Safety Code Section 34194.2 ("Section 34194.2"), the City may enter into an agreement with the Agency, whereby the Agency will transfer a portion of its tax increment to the City, in an amount not to exceed the annual remittance required that year pursuant to Chapter 3 of Part 1.9, for the purpose of financing activities within the redevelopment area that are related to accomplishing the Agency's project goals. 882/015610-0040 2258772.1 009/19/11 -2- N. The purpose of this Agreement is to provide for the transfer of funds by the Agency to the City pursuant to the authorization in Section 34194.2, with said transfer of funds to be in an amount not to exceed the annual amount that is sufficient for the City to make the remittances required by Chapter 3 of Part 1.9 for the applicable fiscal year. 0. Pursuant to Health and Safety Code Section 34194.3, for Fiscal Year 2011-12, the Agency, by complying with the provisions of Part 1.9, shall be exempt from making the full allocation required to be made to the Agency's Low and Moderate Income Housing Fund pursuant to Health and Safety Code Sections 33334.2, 33334.4 and 33334.6 (collectively, the "Housing Fund Allocation") upon the Agency making the finding that there are insufficient other moneys available to meet its debt and other obligations, current priority program needs, or its obligations under Section 34194.2. In accordance with Section 34194.3, the Agency hereby finds and determines that the Agency's Housing Fund Allocation for Fiscal Year 201 1-12 (the "FY 2011-12 Housing Fund Allocation") cannot occur because the Agency has insufficient other moneys available to meet its debt and other obligations, current priority program needs, and its remittance payment obligations under Section 34194.2. The Agency makes these findings and determinations based on evidence that is on file with the Agency Secretary and has been presented to the Agency Board of Directors at the time of the meeting approving this Agreement, which include spreadsheets and other documentation setting forth the available fund balances of the Debt Service Fund, Capital Project Fund, and Housing Fund for each of the Project Areas. P. The obligations of the Agency under this Agreement shall constitute an indebtedness of the Agency for the purpose of carrying out the Redevelopment Plans for the Project Areas.. Q. City understands and believes that an action or actions challenging the validity of AB 1 X 26 and AB 1 X 27 has or have been, or may be filed on behalf of cities, counties and redevelopment agencies. While the City intends to make the remittances as provided for in AB 1 X 27 and pursuant to this Agreement, the remittances shall be made under protest and without prejudice to the City's right to recover such amounts and interest thereon, to the extent there is a final determination by a court of competent jurisdiction that AB 1 X 26 or AB 1 X 27, or both, are unconstitutional or otherwise unlawful. The City reserves the right, regardless of any remittance made pursuant to this Agreement, to challenge the legality of AB 1 X 26 or AB 1 X 27, or both. R. To the extent a court of competent jurisdiction enjoins, restrains, or grants a stay on the effectiveness of the Alternative Voluntary Redevelopment Program, the City shall not be obligated to make any community remittance for the duration,of such injunction, restraint, or stay. Moreover, to the extent that a court of competent jurisdiction determines that either AB 1 X 26 or AB 1 X 27, or both, 882/015610-0040 2258772.1 a09/19/1I -3- are unconstitutional and therefore invalid, and all appeals therefrom are exhausted or unsuccessful, or time for filing an appeal therefrom has lapsed, this Agreement shall be deemed null and void and of no further force and effect. AGREEMENT. NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by this reference and are an integral part of this Agreement, the Parties mutually agree as follows: 1. Agency Obligation to Transfer Funds to City; Determination of Remittance Payment Amounts. The Agency shall transfer to the City in a timely manner, from "Available Agency Funds" (as that term is defined below), amounts sufficient for the City to make the remittance payments required by Part 1.9. The amounts of the remittance payments for each fiscal year shall be determined pursuant to Part 1.9, including Health and Safety Code Section 34194 ("Section 34194"). In the event that the City disputes the State Director of Finance's determination of the City's remittance payment amount for Fiscal Year 201 1-12, as determined pursuant to Section 34194, the City reserves the right to appeal to the State Director of Finance pursuant to Section 34194. The City's remittance payment amount for Fiscal Year 201 1-12 shall be the final remittance payment amount determined after any applicable appeal to the State Director of Finance, and each remittance payment amount for fiscal years after Fiscal Year 2011-12 shall be based upon the final remittance payment amount for Fiscal Year 2011-12, as determined after any applicable appeal to the State Director of Finance, as adjusted pursuant to Section 34194. As used in this Agreement, the term "Available Agency Funds" shall mean, (a) for the remittance payment for Fiscal Year 201 1-2012, the sum of M all funds received and held by the Agency not otherwise restricted or obligated for other uses, including without limitation, for specific projects or programs, and (ii) the funds that would have comprised the FY 2011-12 Housing Fund Allocation should the Agency have been required to make the Housing Fund Allocation for Fiscal Year 2011-2012; and (b1 for the remittance payment for each fiscal year following Fiscal Year 201 1-2012, all funds received and held by the Agency not otherwise restricted or obligated for other uses, including without limitation, for specific projects or programs. 2. City Obligation to Transfer Remittance Payment Amounts to County Auditor; Limited Obligation of City; No Commitment of Funds from City General Fund. Subject to the receipt of sufficient Available Agency Funds from the Agency, the City shall, pursuant to Part 1.9, timely remit to the County Auditor the remittance payment amounts as determined pursuant to this Agreement. The City's obligation to make such remittances shall be a special limited obligation of the City payable solely from payments received from the Agency pursuant to this Agreement. Nothing contained in this Agreement shall be deemed to be or is a pledge or commitment of the City's general fund revenues or other City assets to 882/015610-MO 2258772.1 a09/19111 -4- make the remittance payments as provided for in Part 1.9, and any remittance payments shall be made solely from payments received from the Agency pursuant to this Agreement. 3. Termination of Agreement and All City -Agency Agreements Upon Termination of City's Participation in Alternative Voluntary Redevelopment Program; Self -Executing. In the event that the City does not make a remittance as required by Part 1.9 and the State Director of Finance .makes the determination described in Health and Safety Code Section 34194(d)(2) or 34194.5 that the Agency shall be subject to Parts 1.8 and 1.85 of Division 24 of the Health and Safety Code, this Agreement and all City -Agency Cooperation Agreements shall be terminated, and of no further force and effect, without the need for any further action by the City Council, Agency Board of Directors, or any City or Agency officer, official, employee, agent, or representative. For purposes of this Agreement, "City -Agency Cooperation Agreements" shall mean any and all agreements, whether written or oral or by arrangement or general practice, by and between the City and Agency, which are not defined as "enforceable obligations" pursuant to Health and Safety Code Sections 34167 or 34170.5 (as may be amended from time to time) and which obligate the Agency to pay the City any amount of money or other consideration, including but not limited to City -Agency loan agreements that are not otherwise "enforceable obligations" (as defined above). It is the intent of the City and Agency by agreeing to the terms and conditions of this Section 4 that, upon the termination of the City's and Agency's participation in the Alternative Voluntary Redevelopment Program, neither the City nor the Agency shall owe any payments to the other Party, and that no payments from the Agency to the City pursuant to any City -Agency Cooperation Agreement shall be assigned to the State as contemplated by Health and Safety Code Sections 34193.2(b) and 34195(b). 4. Reservation of Rights; Payments Under Protest; Termination of Agreement If AB 1 X 26 and/or AB 1 X 27 Ruled Unlawful; Self -Executing. The City and Agency reserve any and all rights to challenge the legality of AB 1 X 26 and AB 1 X 27, and the City and Agency reserve any and all rights to benefit from any other legal challenge that determines AB 1 X 26 or AB 1 X 27, or both, are unlawful. All remittance payments made by the City pursuant to this Agreement shall be made under protest and without prejudice to the City's right to recover such amounts and interest thereon unless and until there is a final determination by a court of competent jurisdiction that AB 1 X 26 and AB 1 X 27 are constitutional and the remittance payments required therein are legally enforceable payment obligations of the City. For any action or actions challenging the validity of AB 1 X 26 or AB 1 X 27, or both, in the event that a court of competent jurisdiction enjoins, restrains, or grants a stay on the effectiveness of the Alternative Voluntary Redevelopment Program, the City shall not be obligated to make any community remittance for the duration of such injunction, restraint, or stay, unless and until 882/015610-0040 2258772.1 a09/19/11 -5- there is a final determination by a court of competent jurisdiction that AB 1 X 26 and AB 1 X 27 are constitutional and the remittance payments required therein are legally enforceable payment obligations of the City. For any action or actions challenging the validity of AB 1 X 26 or AB 1 X 27, or both, in the event that a court of competent jurisdiction determines that either AB 1 X 26 or AB 1 X 27, or both, are unconstitutional or otherwise legally invalid, and all appeals therefrom are exhausted or unsuccessful, or time for filing an appeal therefrom has lapsed, this Agreement shall be terminated, and of no further force and effect, without the need for any further action by the City Council, Agency Board of Directors, or any City or Agency officer, official, employee, agent, or representative. 5. Indebtedness of Agency Prior to October 1, 2011. The Agency's funding obligations in this Agreement are intended to be and shall constitute an indebtedness of the Agency, incurred prior to October 1, 2011, within the meaning of Article XVI, Section 16 of the California Constitution and Health and Safety Code Sections 3367O(b) and 34194(c)(2). The Agency shall include the total estimated indebtedness incurred by Agency pursuant to this Agreement on the Agency's annual statements of indebtedness that Agency is required to annually file pursuant to Health and Safety Code Section 33675 (or successor statute). The estimated total indebtedness incurred by the Agency pursuant to this Agreement is shown on Exhibit "A" attached hereto and incorporated herein by this reference. Any increase to the total estimated indebtedness that may occur after the Effective Date of this Agreement shall constitute indebtedness incurred prior to October 1, 2011. 6. Subordination. Agency's funding obligations hereunder shall be junior and subordinate to (i) all existing Agency tax allocation bonds or other direct long- term indebtedness of Agency secured and to be repaid by tax increment funds, (ii) all pledges by Agency of tax increments for tax allocation bonds or other direct long-term indebtedness of Agency secured and to be repaid by tax increment funds, (iii) other Agency financial agreements or other contractual obligations of Agency with any person or entity not a party to this Agreement, including but not limited to any and all tax sharing or so-called "pass -through" agreements entered into between Agency and any taxing entity; (iv) any contingent obligations of Agency; and (v) other financial agreements or other contractual obligations between the parties to this Agreement. 7. Non -Recourse Obligation, No officer, official, employee, agent, or representative of Agency or City shall be liable for any amounts due hereunder, and no judgment or execution thereon entered in any action herein shall be personally enforced against any such officer, official, employee, agent, or representative. 8. Indemnity. In contemplation of Government Code Section 895.2 imposing certain tort liability jointly upon public entities solely by reason of such entities being a party to an agreement defined by Government Code Section 895, 882/015610-MO _ 2258772.1 .09119111 -6- the Parties hereto, as between themselves, agree that the Agency shall indemnify, defend, and hold harmless the City for any loss, costs, or expenses that may be imposed upon the City by virtue of a third party prevailing in a legal challenge to the validity, enforceability, or administration of this Agreement. The provisions of Civil Code Section 2778 shall be applicable to this Agreement. 9. Acknowledgment of Litigation Challenging AB 1 X 26 and AB 1 X 27. As of the date of approval of this Agreement, the California Supreme Court has exercised original jurisdiction in California Redevelopment Association, et al., Petitioners v. Ana Matosantos, et at, Respondents, Case No. S194861, a lawsuit challenging the constitutionality and validity of AB 1 X 26 and AB 1 X 27. In conjunction with exercising original jurisdiction in that case, the Court issued a partial stay on the enforcement of AB 1 X 26 and AB 1 X 27 and the Court has indicated its intent to issue a ruling in the case in January 2012. As such, this Agreement is executed and entered into subject to the condition subsequent that the Court upholds the constitutionality and validity of both AB 1 X 26 and AB 1 X 27 which would then implement the City's remittance payment obligation under AB 1 X 27, as described in the Recitals of this Agreement, and require the payments by the Agency to the City as provided in this Agreement and subject to the terms of this Agreement. As set forth in Section 4 of this Agreement, if the California Supreme Court, or any other court, determines that either AB 1X 26 or AB X1127, or both, are unconstitutional or otherwise legally invalid, and all appeals therefrom are exhausted or unsuccessful, or time for filing an appeal therefrom has lapsed, this Agreement shall automatically, and without the need for any further action by the City Council, Agency Board of Directors, or any City or Agency officer, official, employee, agent, or representative, be terminated and of no further force and effect. 10. Entire Agreement and Full Integration. This Agreement constitutes the entire understanding and agreement of the Parties with respect to the subject matter hereof. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the Parties with respect to the subject matter of this Agreement. 11. Intended Parties; No Third Party Beneficiaries. This Agreement is intended solely for the benefit of the City and the Agency, and their respective successors in interest; provided, however, that this Agreement shall be terminated in accordance with the terms and conditions set forth above in the event that the City or any other public agency becomes the "successor agency" to the Agency pursuant to Parts 1.8 and 1.85 of Division 24 of the Health and Safety Code. The City and Agency expressly covenant that there shall be no third party beneficiaries under this Agreement. 882MI5610-0040 2258772.1 a09119111 -7- 12. Waiver. Any waiver or amendment of the provisions of this Agreement must be in writing and signed by the authorized representatives of the Parties. 13. Severability. Each provision of this Agreement shall be severable from the whole, and if any provision of this Agreement shall be found contrary to law, the remainder of this Agreement shall remain in full force and effect. 14. Counterparts. This Agreement may be executed in duplicate originals, each of which shall be deemed to be an original. [signatures on next page] 89MI5610-0040 2258772.1 e09/19/11 -8- IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first set forth above. APPROVED AS TO FORM: "Agency" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic M "City" CITY OF LA QUINTA, a California municipal corporation and charter city By: _ Mayor 882/015610-0040 2258772.1 a09/191I1 &Z APPROVED AS TO FORM: RUTAN & TUCKER, LLP Z� rt Attorney 882/015610-0040 _ 1 Q- 2258772.1 a09/191I1 EXHIBIT "A" ESTIMATED TOTAL INDEBTEDNESS PURSUANT TO THIS AGREEMENT [see attached] 882/015610-0040 2258772.1 209/19/11 -11- EXHIBIT 'A' Exhibit A Estimated ABA 27 Payment 2011-12 18,315,473 2012-13 4,442,921 2013-14 4,580,210 2014-15 4,721,617 2015-16 4,867,267 2016-17 5,017,286 2017-18 5,171,806 2018-19 5,330.961 2019-20 5,494,891 2020-21 5,663,739 2021-22 5,837,652 2022-23 6,016,783 2023-24 6,201,288 2024-25 6,391,328 2025-26 6.587,069 2026-27 6,788,682 2027-28 6,996,343 2028-29 7,210,235 2029-30 7,430,543 2030-31 7,657,461 2031-32 7,891,186 2032-33 8,131,922 2033-34 8,379,881 2034-35 3,206,926 2035-36 3,303,898 2036-37 3,403,780 2037-38 3,506,658 2038-39 3,612,623 2039.40 3,721,766 Total $ 175,,882,193 Notes: 2011-12 value based on Dept. of Finance current estimate and subject to revision Payments will fluctuate with changes in revenues. -12-