Finance Highlights 2012 0203 - Laserfiche WebLink

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CITY OF SAN LEANDRO MEMORANDUM DATE: February 3, 2012 TO: Finance Committee FROM: Chris Zapata, City Manager BY: Jim O'Leary, Interim Finance Director SUBJECT: Discussion on Budget Amendment Adjusting Appropriations by Eliminating Redevelopment Agency SUMMARY AND RECOMMENDATION Staff recommends that the Finance Committee discuss and consider the elements of a 2011 -12 budget amendment adjusting revenue and expenditure appropriations necessary because of state actions eliminating the San Leandro Redevelopment Agency. BACKGROUND The City Council approves annual budgets based on the best revenue and expenditure information available several months prior to the actual adoption of budget appropriations. As a result, budget adjustments are periodically necessary for changes that arise and require additional budget appropriations or re- appropriations between budget line items. The City Council approved the current City and Redevelopment Agency budgets on June 6, 2011. With the passage of Assembly Bill X1 26 on June 29, 2011, the California State Legislature added several sections to the California Community Redevelopment Law, Health and Safety Code Section 33000 et seq. This bill mandated the dissolution of all redevelopment agencies in California as of October 1, 2011 (subsequently revised to February 1, 2012 by the California Supreme Court), and also outlined several requirements for Agencies during the period between the effective date and the date of dissolution. Section 1 of AB X1 26 includes the following provisions that require the revenue and expenditure appropriation adjustments contained in the budget amendment: • Upon their dissolution, any property taxes that would have been allocated to redevelopment agencies will no longer be deemed tax increment. Instead, these taxes will be deemed property tax revenues and will be allocated first to successor agencies to make payments on the indebtedness incurred by the dissolved redevelopment agencies, with remaining balance allocated in accordance with applicable constitutional and statutory provisions.