REPORT TO COUNCIL
SUBJECT
Title
Approve Budget Modification No. 15 to Appropriate Funds from the General Fund for Payment Pursuant to the Redevelopment Agency Dissolution Law
Report
BACKGROUND AND DISCUSSION
Pursuant to the State law dissolving redevelopment agencies, the Successor Agency to the former Sunnyvale Redevelopment Agency was required to conduct a due diligence review to determine the amount of any unencumbered funds available to remit to the Santa Clara County Auditor-Controller for distribution to the taxing entities, as required by the legislation. The Department of Finance's determination that the Successor Agency had unencumbered funds available for distribution is the subject of litigation between the Successor Agency, City, County and Department of Finance; the matter is currently on appeal in the 3rd District Appellate Court. Under the dissolution law, the Successor Agency cannot obtain a "finding of completion" until the funds owed, as determined by the Department of Finance, are paid to the County Auditor-Controller. The finding of completion allows the Successor Agency to receive certain benefits including the opportunity to obtain approval of repayment of loans made by the City to the former Redevelopment Agency.
The amount of the payment in dispute is $13,819,358 (plus interest), which is the amount transferred from the former redevelopment agency to the City between the period of time when the dissolution law passed (June 2011) until it became effective (February 1, 2012). When it was determined that the Department of Finance was seeking that amount, the City set the disputed amount aside from the General Fund Budget Stabilization Fund in case repayment was required.
The Department of Finance recently sponsored legislation updating the law governing dissolution. SB 107, signed into law September 22, 2015 and effective immediately, creates additional requirements and deadlines for dissolution. SB 107 provides that if a s...
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