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County of San Diego - Office of EducationWAW TAX SHARING AGREEMENT THIS TAX SHARING AGREEMENT (the "Agreement ") is entered into on the 25th day of May , 1993, by and between the SAN DIEGO COUNTY OFFICE OF EDUCATION, a public agency ( "COE "), and the POWAY REDEVELOPMENT AGENCY, a public body corporate and politic (the "Agency "). RECITALS A. The Agency is a redevelopment agency existing pursuant to the provisions of the California Community Redevelopment Law (California Health and Safety Code Section 33000, et se q.) which has been authorized to transact business and exercise the powers of a redevelopment agency pursuant to action of the City Council of the City of Poway (the "City Council "). B. The City Council has adopted Ordinance No. 117 on December 13, 1983 and Ordinance No. 415 on June 15, 1993 pursuant to the California Community Redevelopment Law approving and amending the Redevelopment Plan (the "Plan ") for the Paguay Redevelopment Project (the "Project "). C. The Plan contains provisions authorizing the allocation to the Agency of property tax revenues derived from property located within the Project (the "Project Area ") and authorizing the allocation to the Agency of property taxes pursuant to California Health and Safety Code Section 33670(b). D. The COE is an affected taxing entity, as defined in Section 33353.2 of the Health and Safety Code, which has general purpose and special bonded indebtedness ad valorem property taxes levied on its behalf by the County of San Diego on certain areas that comprise the Project Area under the Plan in Fiscal Year 1984 -85. E. Section 33401 of the Health and Safety Code authorizes the Agency to pay an affected taxing entity with territory within a redevelopment project area that amount of money which the Agency determines is appropriate to alleviate the financial burden or detriment caused to such entity by a plan adoption. F. The Agency has found and determined that it would be appropriate to alleviate that financial burden or detriment caused to the COE by the Plan by paying to or on behalf of the COE certain monies consistent with Section 2 and the other terms and conditions of this Agreement, all in accordance with Section 33401 of the Health and Safety Code. 4.r 1.* G. The COE and the Agency desire to resolve and settle, once and for all times, all present, past and future controversies, claims, causes of action or purported causes of action, differences or disputes, both real and potential, ensuing against the City and /or the Agency in relationship to the Project and /or the Plan or its implementation. NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants contained herein, the parties agree as follows: 1. Definitions. For purposes of this Agreement, the following terms will have the stated definitions: (a) "Agency" means the Poway Redevelopment Agency, a public body corporate and politic. (b) "Bond Coverage" means the debt service coverage factor required by the Bonded Indebtedness documents in excess of the amount of Bond Payments required in such Bond Year. (c) "Bonded Indebtedness" means indebtedness incurred by the Agency for any bonds, notes, interim certificates, debentures, certificates of participation or other obligations issued by the Agency as it deems necessary or appropriate in implementation and for the furtherance of the Plan and /or this Agreement pursuant to Article 5 (commencing with Section 33640) of Chapter 6, Part 1 of the Community Redevelopment Law. Bonded Indebtedness shall include only that indebtedness with a term of not greater than thirty (30) years from the date of the issuance or issuances of such Bonded Indebtedness. (d) "Bond Payments" means the debt service required to be paid by the Agency in each Bond Year pursuant to the requirements of the Bonded Indebtedness documents. (e) "Bond Year" means a one year period during the term of each individual issuance of the Bonded Indebtedness. (f) "City" means the City of Poway, California, a California municipal corporation. (g) "City Council" means the Poway City Council. (h) "COE" means the County Department of Education. (i) "COE's Share" shall mean fifty percent (50 %) of that portion of Tax Increment allocated to and received by the Agency after reaching the Original Plan Cap Amount pursuant to Health and Safety Code Section 33670(b) resulting from the general purpose tax levy of the COE that, had the Plan not been amended, would have been allocated and paid to the COE from the 05/25/93 5289Q/2345/042 -2- Project Area for the benefit of the COE's General Fund, as computed by the San Diego County Auditor - Controller, in accordance with the applicable provisions of the California Revenue and Taxation Code. All parties agree that the calculation of the COE's Share is equal to fifty percent (50%) of 1.6924 which equals 0.8462 percent of the Tax Increment received by the Agency after the Agency has received the Original Plan Cap Amount. (j) "Fiscal Year" means the period from July 1 to and including the immediately following June 30. (k) "Ordinance" means Ordinance No. 415 adopted by the City Council approving the amendment to the Plan. (1) "Original Plan Cap Amount" means that amount of Tax Increment received by the Agency equal to Four Hundred Eight Million Four Hundred and Eighty -Nine Thousand Dollars ($408,489,000). (m) "Plan" means the Paguay Redevelopment Plan as amended for the Paguay Redevelopment Project, adopted by the City Council by the Ordinance. Project. (n) "Project" means the Paguay Redevelopment (o) "Project Area" means the territory which is located in the Project pursuant to the Plan. (p) "Refunding Issues" means all bonded indebtedness of the Agency issued for the purpose of refunding outstanding indebtedness of the Agency; provided, however, that any issue of bonds the proceeds of which are intended to be used in part for new projects and in part for refunding shall be included under this definition only to the extent such issue is to be used for refunding. (q) "Tax Increment" means that portion of ad valorem property taxes resulting from the increase in assessed valuation over the 1984/1985 base year assessed valuation, which tax revenues are allocated and paid to the Agency pursuant to California Health and Safety Code Section 33670(b) from the Project Area in accordance with the Plan. Tax Increment shall refer to those taxes collected as a result of the one percent (1 %) levy allowed under Article XIIIA of the California Constitution. The sums that (a) the Agency is required to set aside and expend for the purposes of low- and moderate - income housing pursuant to Health and Safety Code Section 33334.2, et seg., or successor statutes, and (b) the Agency is required or mandated (rather than merely authorized or a discretionary payment) to set aside or pay or expend for any purpose, pursuant 05/25/93 5289Q/2345/042 -3- to legislative requirements of or revisions to the Community Redevelopment Law or other statutes or regulations, and (c) any duly established increases in the rate of tax imposed for the benefit of the COE which levy occurs after the tax year in which the Ordinance became effective, as set forth in Health and Safety Code Section 33676(a)(1) or a successor statute (including, without limitation, special tax levies to finance general obligation bonds or certificates of participation), shall be excluded and shall not be deemed to be Tax Increment for the purposes of this Agreement or the tax sharing obligations hereunder. (r) "Term" of the Plan means the last to occur of (i) the period of time the Plan remains in effect, (ii) the date all Agency debts are paid in full, or (iii) the date that the limit for incurring indebtedness under the Plan expires. 2. Allocation to COE Portion of Tax Allocation Bond and the COD's Share. (a) Excluding Refunding Issues and solely relating to new fund issues, at the time estimated to be within the first five years after adoption of the Ordinance, when the Agency in its reasonable discretion issues new tax allocation Bonded Indebtedness in a principal amount sufficiently large to obtain bond proceeds of One Million Nine Hundred and Fifty Thousand Dollars ($1,950,000) net of all costs of issuance and required reserves, and with Bond Coverage of not less than One Hundred Twenty -Five Percent (125 %) or such greater amount of Bond Coverage as the Agency's bond counsel and financial advisors deem necessary in their sole discretion in the then current municipal bond market to issue fully insured Bonded Indebtedness with the highest credit rating obtainable for tax allocation bonds of that type, allocate and pay One Million Nine Hundred and Fifty Thousand Dollars ($1,950,000) of the bond proceeds thereof, to the COE. This One Million Nine Hundred and Fifty Thousand Dollar ($1,950,000) payment from bond proceeds is an advance credit against the COE's Share. Upon payment of the One Million Nine Hundred and Fifty Thousand Dollars ($1,950,000) to the COE, an interest credit at a rate equal to the City's pooled investment rate of return as stated in the City Treasurer's monthly report to City Council shall be deemed to accrue on the One Million Nine Hundred and Fifty Thousand Dollar ($1,950,000) advance. Both the One Million Nine Hundred and Fifty Thousand Dollar ($1,950,000) payment and the interest accrued thereon shall be offset against the payment of the COE's Share in subparagraph (c) below. The COE shall utilize said bond proceeds for a lawful purpose. (b) In addition to the One Million Nine Hundred and Fifty Thousand Dollar ($1,950,000) advance in (a) above, the Agency shall pay the COE the amount of One Hundred Thousand Dollars ($100,000) for the purpose of facility planning costs for a new North San Diego County facility within one year of this Agreement and an additional Three Hundred and Fifty Thousand 05/25/93 5289Q/2345/042 -4- in Dollars ($350,000) which is not credited against the COE's Share at the same time as the One Million Nine Hundred and Fifty Thousand Dollar ($1,950,000) advance specified in subparagraph (a) above is paid to the County. (c) After offsetting any advance payments and interest from (a) above, the remainder of COE's Share shall be paid on an annual basis after the Original Cap Amount has been received by the Agency. (d) Except as provided to the contrary above, payment to the COE of such amounts shall be made within thirty (30) days after the first allocation and payment by the San Diego County Auditor - Controller to the Agency of Tax Increment pursuant to the Plan, provided that payments in relation to allotments received between July 1 and December 31 of any Fiscal Year shall be made no later than the following February 28, and that payments in relation to allotments received between January 1 and June 30 of any Fiscal Year shall be made no later than the immediately following August 30. 3. Books and Records. The Agency shall, within thirty (30) days after receipt of written request from the COE, make available to the COE for review or audit its records or statements regarding the allocation and payment of Tax Increment to the Agency in accordance with the Plan pursuant to Health and Safety Code Section 33670(b). 4. Section 33676 Resolutions. The COE agrees that it shall not request receipt of revenues pursuant to Section 33676(a)(2) of the Health and Safety Code and within sixty (60) days of executing this Agreement, the COE shall immediately repeal the resolution, if any, that it may have adopted pursuant to Health and Safety Code Section 33676(b) regarding the Plan. 5. Payments Subi ct to Indebtedness. Payments by the Agency pursuant to Section 2 are subject to the conditions and limitations set forth in this Section 5: (a) The Agency's obligation under this Agreement to make payments to or on behalf of the COE is deemed to constitute an "indebtedness" within the meaning of Health and Safety Code Sections 33670 and 33675. (b) Except as set forth herein, the Agency's obligation to make payments hereunder shall be limited to Tax Increment from the Project Area which is actually received by the Agency. In no way shall the Agency be liable for such obligations from any other revenues. The City shall have no financial obligation or any other obligations by virtue of this Agreement, and shall not be responsible for the discharge of obligations of the Agency herein. 05/25/93 5289Q/2345/042 -5- y... (c) It is understood that certain amounts of the taxes allocated to the Agency pursuant to Section 33670 of the California Health and Safety Code (other than the COE's Share of Tax Increment) must be set aside by the Agency in special funds to service Bonded Indebtedness and meet the Agency's obligation under Health and Safety Code Section 33334.2, or a successor statute. (d) The parties understand that future legislative changes made to Health and Safety Code Section 33334.2 or other sections of the California Community Redevelopment Law may increase or decrease the amount of Tax Increment which is available to the Agency and which is payable to or on behalf of the COE hereunder. The parties further understand and acknowledge that by excluding such mandatory payments from the definition of Tax Increment under this Agreement, only the COE's Share pro rata of such mandatory payments is deducted from the amounts payable to or on behalf of the COE hereunder. Subject to Section 9 herein, it is further understood by the parties that certain additional amounts of the taxes allocated to the Agency pursuant to Section 33670 of the California Health and Safety Code may be required to be set aside or paid to meet legislative requirements which may be imposed on some or all redevelopment agencies pursuant to currently proposed or subsequent legislation. The parties understand that such potential legislative changes to the Community Redevelopment Law may increase or decrease the amount of Tax Increment which is available to the Agency and thus available for payment to or on behalf of the COE hereunder. Subject to the rights of the COE and /or the Agency to terminate this Agreement pursuant to Section 9 herein and to the extent the parties elect to proceed hereunder, the full amount, if any, paid by the Agency to the COE pursuant to any mandatory pass through to the COE due to legislative requirements each year shall be credited to the Agency and offset and deducted from the amounts due by the Agency to or on behalf of the COE pursuant to Section 2 herein, or alternatively, in any year if no payments by the Agency to the COE are mandated by legislative requirements due to the form or exceptions of this Agreement, the full amount excepted shall be included within the amount of available Tax Increment for the payment by the Agency to or on behalf of the COE required by Section 2 herein. (e) Notwithstanding the other provisions of this Section 5 hereof, the obligations of the Agency under this Agreement are subordinate to all Bonded Indebtedness and no payment shall be made by the Agency in any Fiscal Year pursuant to this Agreement if such payment would impair any Bonded Indebtedness. 05/25/93 5289Q/2345/042 -6- wr v.r (f) Notwithstanding any other provisions of this Agreement to the contrary, the Agency's obligation to make payments to or on behalf of the COE under this Agreement in any single Fiscal Year shall not: (i) exceed the amount of Tax Increment which would have been received by the COE if all the Tax Increment from the Project Area had been allocated to all the affected taxing agencies without regard to the division of taxes required by Health and Safety Code Section 33670; (ii) be contrary to any provision of the Constitution or other laws of the State of California; or (iii) be contrary to any covenants of the Agency as set forth in the Bonded Indebtedness documents. (g) No payments shall be made by the Agency from the Tax Increment to or on behalf of the COE except as expressly set forth in Sections 2 of this Agreement. (h) The COE shall indemnify, defend and hold harmless the Agency, the City and their respective officers, employees, representatives and agents from any and all claims, liabilities and causes of action asserted by any third party against the Agency or the City by reason of the Agency's payment of funds in the manner described in Sections 2 of this Agreement. 6. Accounting Statement. Upon written request by the Agency, the COE shall promptly provide without charge a written statement accounting for the expenditure of monies paid pursuant to this Agreement. 7. Effective Date and Term. This Agreement shall become effective upon the date of action and the approval of this Agreement by the Agency and shall remain in effect throughout the Term. Notwithstanding the foregoing, this Agreement shall terminate automatically and be of no further force or effect in the event the adoption of the Plan should be set aside, annulled or modified as the result of litigation of whatever form against the Plan. The word "modified" as used in the previous sentence shall mean a modification of the Plan which affects: (i) the financial provisions (including the tax increment limitation and the limitation on bonded indebtedness), (ii) the authorized powers of the Agency or its legislative body, (iii) the intended public or private projects or improvements, (iv) the Term, (v) the period of eminent domain, or (vi) the Project Area. With respect to (i) through (vi) inclusive above, if the intent and factual and legal assumptions of the parties to this Agreement cannot be fulfilled or are affected contrary to the objectives as mutually agreed herein then this Agreement shall be so terminated. If litigation of whatever form is filed by any person or entity challenging the Plan, the Ordinance or any proceeding in 05/25/93 5289Q/2345/042 -7- ``w . 0 connection with such adoption proceeding, then the payment requirements of the Agency in Section 2 hereunder shall be tolled and delayed for the period of such litigation. If as a result of the terms and conditions of this Agreement any department of the State of California, the State of California Legislature, or a court of law, imposes restrictions, conditions, penalties, mandatory payments by the Agency, or any other conditions or requirements, which in any way adversely affects the normal, accepted, and standard revenue sources and accounting practices and amount of revenues with regards to the financing of services and facilities of the COE as provided for by the Community Redevelopment Law or otherwise by the State of California, then at the reasonable discretion of the COE this Agreement shall be terminated and be of no other further force or effect and thereafter be renegotiated between the COE and the Agency. If any department of the State of California, the State of California Legislature, or a court of law imposes restrictions, conditions, penalties, statutory requirements, mandatory payments to taxing entities or any other requirements which in any way adversely affects the current method of tax increment allocation and /or thereby the amount of tax increment payable to and /or expendable by the Agency for non - mandated purposes under the Plan, and /or the amount of tax increment allocable to the Agency to pay the COE, and /or the amount of funds to be set aside or mandated to be paid to or expended for taxing entities as provided for by the Community Redevelopment Law or otherwise by the State of California, then at the reasonable discretion of the Agency this Agreement shall be terminated and be of no other further force or effect and thereafter be renegotiated between the COE and the Agency. In clarification of the foregoing two paragraphs, in the event the Agency or the COE in their respective discretionary acts terminate this Agreement or a court modifies the Plan as described in the second paragraph of this Section 7, the Agency and COE agree each is obligated to negotiate in good faith toward an amended or new pass- through contract, which contract provides reasonably remaining financial benefit to the COE and reasonably equivalent remaining tax increment funds allocable and paid to and /or expendable by the Agency in relation to the legislative requirements and circumstances at the time of such renegotiations, all in full compliance with the Community Redevelopment Law and all other applicable laws. B. Notice of Plan Adoption. The COE certifies to the Agency that it has received all notices, written or published, that it is required by the California Community Redevelopment Law to receive during the process leading to the adoption of the 05/25/93 5289Q/2345/042 -8- Plan, and hereby waives any and all legal rights it may have to contest the Plan due to a failure to receive any statutorily required notice. 9. Release and Covenant Not to Sue or Chall nae Plan. The COE releases the City and the Agency from any and all claims or causes of action, and covenants and agrees and irrevocably binds itself and its officers, employees, agents and representatives forever at no time or place to commence or participate in or prosecute any actions on account of any claim or causes of action, whether past, present or future, arising out of the City's and the Agency's adoption of the amendment to the Plan, or the City's or the Agency's lawful activities in implementation of and pursuant to the Plan. The COE agrees that neither it, nor its officers, employees, agents or representatives at the expense, direction, recommendation or encouragement of the COE, shall file or participate in opposition to the Agency or the City in any challenge attacking or otherwise questioning (i) the validity of the Plan, or (ii) the adoption or approval of the Plan, or (iii) any of the findings, determinations, or filings previously made by the Agency or the City Council in connection with the Plan, or (iv) the implementation of the Plan, or any of its supporting documentation, including, without limitation, any Environmental Impact Report prepared for the Plan in connection with the actions set forth in paragraphs (i) through (iv) above. The COE furthermore agrees that neither it, nor its officers, employees, agents or representatives at the expense, direction, recommendation or encouragement of the COE, shall file or participate in opposition in any challenge to any zoning changes, general plan amendments, conditional use permits, or any other specific development applications within the Project Area proceeding through the entitlement process of the City and /or the Agency pursuant to the Plan. The COE acknowledges that it is aware of and familiar with the provisions of Section 1542 of the California Civil Code, which provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." The COE hereby waives and relinquishes all rights and benefits which it may have under Section 1542 of the California Civil Code. By agreeing to the provisions included in this Section 9, the COE does not waive the right to dispute the validity of any future amendments to the Plan. 05/25/93 5289Q/2345/042 -9- VOW 10. Enrollment Within Project Area. The COE agrees to enroll and provide all services as required by law to all individuals added to the COE responsibilities as a result of the Plan and the development thereunder. Upon request of the Agency the COE shall provide a letter or other documentation certifying any of the above. Upon the request of the COE, the staff of the Agency shall meet and confer with representatives of the COE concerning any of the plans, reports, land use applications or other items or actions set forth above. The COE will provide such individuals with the same limitations and opportunities regarding COE sponsored programs as offered other individuals of the COE. 11. No Overcrowdina Resolution. The COE acknowledges that it is not entitled to make or transmit findings pursuant to Section 33445.5 of the Community Redevelopment Law that conditions of overcrowding exist in areas within the COE which serve individuals who reside within or adjacent to the Project Area and that the conditions of overcrowding result from actions taken by the Agency in implementing the Plan. Nothing in this Agreement shall be construed to prohibit the COE from making findings to obtain interim facilities fees pursuant to Government Code Section 65973, et seq., or a successor statute. 12. Default. Failure or delay by any party to perform any term or provision of this Agreement constitutes a default under this Agreement. The party who so fails or delays must immediately commence to cure, correct or remedy such failure or delay, and shall complete such cure, correction or remedy with reasonable diligence and during any period of curing shall not be in default. The injured party shall give written notice of default to the party in default, specifying the default complained of by the injured party. If the default is not commenced to be cured within thirty (30) days after service of such notice of default and is not cured promptly in a continuous and diligent manner within a reasonable period of time after commencement, the defaulting party shall be liable for any damages caused by such default, and the non - defaulting party may thereafter commence an action for damages with respect to such default or for specific performance of this Agreement. 13. Indemnification. The Agency shall indemnify and hold harmless the COE and its officers, agents, employees, representatives and volunteers, from and against any loss, liability, claim or judgment relating in any manner to the Agency's breach of its obligations pursuant to this Agreement. The COE shall indemnify and hold harmless the Agency and its officers, agents, employees, representatives and volunteers, from and against any loss, liability, claim or judgment relating in any manner to the COE's breach of its obligations pursuant to this Agreement. 05/25/93 5289Q/2345/042 -10- 14. Notices. Written notices, demands and communications between the parties shall be sufficiently given if delivered by hand, sent by telecopy or overnight delivery service, or dispatched by registered or certified mail, postage prepaid, return receipt requested, to the addresses specified below (or such other addresses as the parties may specify, from time to time): To Aaenc POWAY REDEVELOPMENT AGENCY 13325 Civic Center Drive Poway, California 92064 Attention: Executive Director To COE: SAN DIEGO COUNTY OFFICE OF EDUCATION Attention: All notices and communications sent to the parties shall be deemed to have been received three (3) days after the notice or communication has been deposited in the U.S. Mail, and the next business day after the notice or communication has been delivered by hand or sent by telecopy or overnight delivery service. 15. Attorneys' Fees. In the event any action by either party is taken to enforce this Agreement, the prevailing party shall be entitled to recover its actual attorneys' fees and costs of litigation from the other party. 16. Nonliability of Officials and Employees of Parties. No member, official or employee of the parties hereto shall be personally liable to the other party, or any successor in interest, in the event of any default or breach of this Agreement or for any amount which may become due hereunder, or on any obligations under the terms of this Agreement. 17. Conflicts of Interest. No member, official or employee of the parties hereto shall have any personal interest, direct or indirect, in this Agreement, nor shall any member, official or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he or she is directly or indirectly interested. 18. Entire Agreement. This Agreement constitutes the entire understanding and agreement of the parties, integrates all of the terms and conditions mentioned herein or incidental 05/25/93 5289Q/2345/042 -11- -OW hereto, and supercedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. 19. Waivers and Amendments. All waivers of the provisions of this Agreement shall be in writing and executed by the appropriate authorities of the parties, and all amendments hereto shall be in writing and executed by the appropriate authorities of the parties. 20. Time of Essence. Time is of the essence with respect to every portion of this Agreement of which time is a material part. 21. Legal Challenge. The COE and Agency agree that in the event litigation is initiated by someone not a party to this Agreement attacking the validity of all or any portion of this Agreement, both parties shall support and seek to uphold this Agreement. 22. Governing Law. This Agreement shall be construed in accordance with the laws of the State of California. Legal actions concerning any dispute hereunder shall be instituted in the appropriate court in the County of San Diego, California. 23. Further Assurances. Each party without further consideration agrees to execute such other and further documents, and to perform such other and further acts, as may be necessary or proper in order to consummate the settlement and transaction contemplated by this Agreement. In the event that bond counsel for the Agency requires modifications to this Agreement in order to effect the issuance of bonds, all parties hereto shall promptly execute such alterations, changes or amendments as may be reasonably required to allow for bond issuance without impeding the obligations and rights of the parties hereunder. 24. Severability. If any term or provision of this Agreement shall be invalid or unenforceable to any extent, the remainder of this Agreement shall not be affected thereby, and the parties hereto shall take further actions as may be reasonable necessary and available to them to effectuate the intent of the parties as to all provisions set forth in this Agreement. 05/25/93 5289Q/2345/042 -12- v .✓ IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. ATTEST: APPROVED AS TO FORM: C k&'l L ` kao, County Sp cial Counsel BOWIE, ARNESON, KADI, WILES & GIANNONE SAN DIEGO COUNTY OFFICE OF EDUCATION, a public agency "COE" POWAY REDEVELOPMENT AGENCY, a public body corporate and politic Byo� Chairman., Don H son "AGENCY" ATTEST: Agenc,& Aacretary. Marjorie K. Wahlsten APPROVED AS TO FORM:, Agency General Counsel 05/25/93 5289Q/2345/042 -13-