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6.1. B. - Page 88 NOTE 14 - REDWOOD CITY REDEVELOPMENT AGENCY The Agency has purchased parcels of land for redevelopment in order to develop or redevelop blighted properties within the city limits of Redwood City. During FY 2010/11, the Agency sold all of its parcels to the City. Such land parcels are accounted for at the lower of cost, estimated net realizable value, or agreed-upon sales price if a disposition agreement has been made with a developer. The Agency has entered into agreements with developers and other government entities for the purpose of ensuring the redevelopment of properties in its area. The Agency's agreements with developers, termed disposition and development agreements or owner participation agreements, generally require the Agency to assist in financing land acquisition or operating costs of a specific project, but are based on the developer's performance on that project as measured by increases in property taxes and sales taxes generated by the project or to provide affordable housing to the community. The increases in these taxes are the only source of Agency assistance for the project. The Agency has agreements termed pass-throughs with government entities. These agreements require the Agency to pass through to these entities a portion of the property tax increases it collects, representing the increases these entities would have expected to collect if the Agency had not been formed. As part of the 2011-12 State budget pacl<age, the California Legislature enacted and the Governor signed two companion bills addressing redevelopment, AB1x 26 ("Dissolution Act") and AB1x 27 ("Voluntary Program Act"), which took effect on June 29, 2011. The Dissolution Act, which is discussed more fully below, immediately suspended all new redevelopment activities and incurrence of indebtedness, and eliminates redevelopment agencies as of October 1, 2011. The Voluntary Program Act, which is discussed more fully below, allows the community that created the redevelopment agency to avoid dissolution by opting to pay a substantial community remittance ("Remittance") beginning FY 2011/12 and each year thereafter. If all communities with redevelopment agencies opt in to the Voluntary Program Act, the total statewide remittance would be $1.7 billion in FY 2011/12. Remittance each succeeding year would be approximately $400 million statewide. If Redwood City opts in to the Voluntary Program Act, the FY 2011/12 payment is $4.9 million and each subsequent year is approximately $1.16 million based on preliminary estimates by the California Redevelopment Association. Biannual payments would be due by January 15 and May 15 of each year. On July 18, 2011, the California Redevelopment Association, the League of California Cities, and others filed a Petition for Writ of Mandate in the Supreme Court of the State of California (California Redevelopment Association, et al. v. Ana Matosantos, et al., Case No. 5194861), challenging the constitutionality of the companion bills, the Dissolution Act and the Voluntary Program Act, on behalf of cities, counties and redevelopment agencies, and requesting a stay of their enforcement. As of the date of this report, a partial stay of enforcement of the companion bills has been granted by the California Supreme Court. The partial stay continues to prohibit RDAs from taking on any new obligations or engaging in any RDA activities (other than meeting prior enforceable obligations) on or after the effective date of the companion bills, but it is unclear whether cities may still adopt opt-in ordinances during the stay. 62