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Home My WebLink About2011-05-11 e-packet AGENDA OV� AN A' ti REDEVELOPMENT AGENCY 0 3.... r CITY OF SOUTH SAN FRANCISCO 4z /FORD REGULAR MEETING MUNICIPAL SERVICES BUILDING COMMUNITY ROOM WEDNESDAY, MAY 11, 2011 6:30 P.M. PEOPLE OF SOUTH SAN FRANCISCO You are invited to offer your suggestions. In order that you may know our method of conducting Agency business, we proceed as follows: The regular meeting of the Redevelopment Agency is held on the second Wednesday of each month at 6:30 p.m. in the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco, California. Public Comment: For those wishing to address the Board on any Agenda or non - Agendized item, please complete a Speaker Card located at the entrance to the Community Room and submit it to the Clerk. Please be sure to indicate the Agenda Item # you wish to address or the topic of your public comment. California law prevents Redevelopment Agency from taking action on any item not on the Agenda (except in emergency circumstances). Your question or problem may be referred to staff for investigation and/or action where appropriate or the matter may be placed on a future Agenda for more comprehensive action or a report. When your name is called, please come to the podium, state your name and address for the Minutes. COMMENTS ARE LIMITED TO THREE (3) MINUTES PER SPEAKER. Thank you for your cooperation. The Clerk will read successively the items of business appearing on the Agenda. As she completes reading an item, it will be ready for Board action. KEVIN MULLIN Chair RICHARD A. GARBARINO MARK N. ADDIEGO Vice Chair Boardmember PEDRO GONZALEZ KARYL MATSUMOTO Boardmember Boardmember RICHARD BATTAGLIA KRISTA MARTINELLI Investment Officer Clerk BARRY M. NAGEL STEVEN T. MATTAS Executive Director Counsel PLEASE SILENCE CELL PHONES AND PAGERS HEARING ASSISTANCE EQUIPMENT IS AVAILABLE FOR USE BY THE HEARING - IMPAIRED AT REDEVELOPMENT AGENCY MEETINGS In accordance with California Government Code Section 54957.5, any writing or document that is a public record, relates to an open session agenda item, and is distributed less than 72 hours prior to a regular meeting will be made available for public inspection in the City Clerk's Office located at City Hall. If, however, the document or writing is not distributed until the regular meeting to which it relates, then the document or writing will be made available to the public at the location of the meeting, as listed on this agenda. The address of City Hall is 400 Grand Avenue, South San Francisco, California 94080. CALL TO ORDER ROLL CALL AGENDA REVIEW PUBLIC COMMENTS CONSENT CALENDAR 1. Motion to approve the minutes of April 13, 2011 and April 27, 2011. 2. Motion to approve expense claims of May 11, 2011. ADMINISTRATIVE BUISNESS 3. Resolution Authorizing the Executive Director to Execute an Agreement with the County of San Mateo to prepay the Redevelopment Agency of South San Francisco's Share of a Multi - Year property Tax Settlement between the County of San Mateo and Genentech Inc. CLOSED SESSION 4. Real Property Negotiations (Pursuant to Government Code Section 54956.8) Agency Negotiator: Marty Van Duyn related to: 315 -321 Airport Blvd. Owner: The Gonzalez Family Trust 401 Airport Blvd. Owner: The Gonzalez Family Trust 411 Airport Blvd. Owner: The Gonzalez Family Trust 421 Airport Blvd. Owner: The Gonzalez Family Trust 216 Miller Avenue Owner: The Gonzalez Family Trust 405 Cypress Avenue Owner: The Gonzalez Family Trust ADJOURNMENT REGULAR REDEVELOPMENT AGENCY MEETING MAY 11, 2011 AGENDA PAGE 2 S MINUTES D PAFT REGULAR MEETING REDEVELOPMENT AGENCY °.4LtFOnto' CITY OF SOUTH SAN FRANCISCO MUNICIPAL SERVICES BUILDING COMMUNITY ROOM WEDNESDAY, APRIL 13, 2011 CALLED TO ORDER: 6:31 p.m. ROLL CALL: Present: Boardmembers: Addiego, Gonzalez and Matsumoto, Vice Chairman Garbarino and Chairman Mullin. Absent: None. AGENDA REVIEW None. PUBLIC COMMENTS None. CONSENT CALENDAR 1. Motion to approve the minutes of February 9, 2011, February 23, 2011, March 9, 2011 and March 23, 2011. 2. Motion to approve expense claims of April 13, 2011. Motion— Boardmember Garbarino /Second— Boardmember Gonzalez: to approve the Consent Calendar. Unanimously approved by voice vote. ADJOURNMENT Being no further business, Chairman Mullin adjourned the meeting at 6:33 p.m. Submitted by: Approved: Joy M me11i, ' Kevin Mullin, Chairman City of South San Francisco City of South San Francisco p SPECIAL MEETING k J _ ,r g _% MINUTES Government Code Section 54957.5 y ,. .01.1.T_ TT ti J am— �e � REDEVELOPMENT AGENCY aIIFOR� OF THE CITY OF SOUTH SAN FRANCISCO P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 Meeting to be held at: MUNICIPAL SERVICES BUILDING COMMUNITY ROOM 33 ARROYO DRIVE WEDNESDAY, APRIL 27, 2011 1. Call to Order. Time: 8:42 p.m. 2. Roll Call. Present: Boardmembers Addiego, Gonzalez and Matsumoto, Vice Chairman Garbarino and Chairman Mullin. Absent: None. 3. Agenda Review. None. 4. Public Comments — comments are limited to items on the Special Meeting Agenda. None. 5. Closed Session: Conference with Legal Counsel — Anticipated Litigation Significant Exposure to Litigation: One Case. (Pursuant to Government Code Section 54956.9(b) Closed Session opened: 8:43 p.m. Open Session resumed: 9:00 p.m. Report out of closed session by Chairman Mullin: The Agency approved a settlement agreement with Overaa Construction by a 5 -0 vote. 6. Adjournment. Being no further business, Chairman Mullin adjourned the meeting at 9:00 p.m. s. itted: ` Approved: L s +: k artinell Kevin Mullin Clerk Redevelopment Agency Chairman City of South San Francisco City of South San Francisco Listing of RDA Payments for Council Review o n ., . ,,e rr y -' - I certify that the payments shown on this payment register are accurate and sufficient funds were available for payment.* DATED: - - • FIN NCE DIRECTOR *Note: Items below do not include payroll related payments Checks: Date Amount 04/08/11 32,105.95 04/13/11 1,234.38 04/15/11 60,322.68 04/20/11 74, 589.92 04/22/11 8,555.41 04/27/11 27,208.87 05/04/11 1,765,931.03 Electronic Payments: Date Amount To Description 04/20/11 69,921.68 Union Bank Mid Pen Housing Construction Loan Total Payments $ 2,039,869.92 Tinted on: 05/06/2011 Page 1 of 67 City of South San Francisco Payment Listing for Redevelopment Agency Board Review Payments Issued between 4/7/2011 and 5/4/2011 04/08/2011 VENDOR NAME INVOICE AMOUNT INVOICE DESCRIPTION INVOICE # CHECK # Dept 10 ECONOMIC & COMMUNITY DEVELOPMENT DEPT DANA PROPERTY ANALYSIS 14,500.00 PROPERTY APPRAISAL 25328 203374 DEPT OF HOUSING & URBAN DEV 821.00 HUD PAYMENT 03/22/11 203376 GATEWAY PROPERTY OWNERS ASSOC 2,013.68 JAN11 -APR11 POA FEE GATEWAY CHLDCARE CTR RD 1632083 203383 IDEAL RESTORATION INC. 4,280.25 RENTAL PROP REPAIRS 5373 203388 MEYERS, NAVE, RIBACK 9,352.70 CSSF CITY ATTY FEES -RDA 738.001 2011010585 203393 THYSSENKRUPP ELEVATOR CORP 66.14 CONTRACT SERVICES 1125054074 203403 388.68 CONTRACT SERVICES 1125054073 203403 U S BANK CORP PAYMENT SYSTEM 136.00 NF- ACG DOWNTOWN BOOK cc207419 203405 VAN METER WILLIAMS POLLACK 425.00 DESIGN SERVICES -3RD & 4TH LN /BREEZEWY PR 1007.1 INV #6 203406 Payments Issued for ECONOMIC & COMMUNITY $31,983.45 DEVELOPMENT DEPT Dept 99 CIP MEYERS, NAVE, RIBACK 122.50 CSSF CITY ATTY FEES -RDA 738.018 2011010589 203393 Payments Issued for CIP $122.50 Payments Made on 4/8/2011 $32,105.95 'rinted on: 05/06/2011 Page 2 of 67 City of South San Francisco Payment Listing for Redevelopment Agency Board Review Payments Issued between 4/7/2011 and 5/4/2011 04/13/2011 VENDOR NAME INVOICE AMOUNT INVOICE DESCRIPTION INVOICE # CHECK # Dept 00 NON EXPENSE ACCT GRAND AVENUE HARDWARE 22.07 PROP RENTAL SUPPLIES 3353 203440 PASS JANITORIAL SERVICE 125.00 RENTAL PROP REPAIRS 2672 203467 Payments Issued for NON EXPENSE ACCT $147.07 Dept 10 ECONOMIC & COMMUNITY DEVELOPMENT DEPT BLUE COLLAR LANDSCAPING 160.00 PROP RENTAL LAWN MAINTENANCE 70 203417 SSF SCAVENGER CO INC 49.25 MAR1 1 GARBAGE COLLECTION SVC -341 COMMERC 2282414 203482 98.50 MAR11 GARBAGE COLLECTION SVC- 312 MILLER 2282836 203482 73.88 MAR11 GARBAGE COLLECTION SVC- 310 MILLER 2282835 203482 49.25 MAR11 GARBAGE COLLECTION SVC -339 COMMER 2282413 203482 351.22 MAR1 1 GARBAGE COLLECTION SVC- 306 SPRUCE 2283224 203482 156.15 MAR11 GARBAGE COLLECTION SVC -714 LINDEN 2282744 203482 THYSSENKRUPP ELEVATOR CORP 20.99 CONTRACT SERVICES 1125048777 203488 20.99 CONTRACT SERVICES 1125050727 203488 66.14 CONTRACT SERVICES 1125051577 203488 U S BANK CORP PAYMENT SYSTEM 15.75 NF- PLANNING COMM BOOK cc207454 203492 LINDSEY VIRDEH 25.19 MILEAGE REIMB FOR LIDSEY VIRDEH 02/22- 03/31/11 203494 Payments Issued for ECONOMIC & COMMUNITY $1,087.31 DEVELOPMENT DEPT Payments Made on 4/13/2011 $1,234.38 Printed on: 05/06/2011 Page 3 of 67 City of South San Francisco Payment Listing for Redevelopment Agency Board Review Payments Issued between 4/7/2011 and 5/4/2011 04/15/2011 VENDOR NAME INVOICE AMOUNT INVOICE DESCRIPTION INVOICE # CHECK # Dept 10 ECONOMIC & COMMUNITY DEVELOPMENT DEPT ARMANDO SANCHEZ 5,461.25 03/07- 03/18/11 RDA CONSULTANT SERVICES 04/13/11 203543 SEIFEL CONSULTING INC 18,829.06 RDA - PLAN AMENDMENT - 2010 10892 203544 31,478.37 RDA - PLAN AMENDMENT - 2010 10869 203544 SHELTER NETWORK 4,500.00 RDA GRANT - SHELTER NETWORK - CROSSROADS 3RD QTR FY10 -11 203545 U S BANK CORP PAYMENT SYSTEM 54.00 NF- PLNG COMMISSIONER BOOK cc207452 203552 Payments Issued for ECONOMIC & COMMUNITY $60,322.68 DEVELOPMENT DEPT Payments Made on 4/15/2011 $60,322.68 printed on: 05/06/2011 Page 4 of 67 City of South San Francisco Payment Listing for Redevelopment Agency Board Review Payments Issued between 4/7/2011 and 5/4/2011 04/20/2011 VENDOR NAME INVOICE AMOUNT INVOICE DESCRIPTION INVOICE # CHECK # Dept 10 ECONOMIC & COMMUNITY DEVELOPMENT DEPT DYETT & BHATIA 68,541.04 EL CAMINO REAL /CHESTNUT PLAN 10- 433 -12 203599 4,178.88 EL CAMINO REAL /CHESTNUT PLAN 10- 433 -17 203599 MAZE & ASSOCIATES 45.00 AUDIT SERVICES FOR MARCH 26454 203628 SHELTER NETWORK 1,750.00 10 -11 CDBG GRANT -MAPLE 3RD QTR 203667 Payments Issued for ECONOMIC & COMMUNITY $74,589.92 DEVELOPMENT DEPT Payments Made on 4/20/2011 $74,589.92 Printed on: 05/06/2011 Page 5 of 67 City of South San Francisco Payment Listing for Redevelopment Agency Board Review Payments Issued between 4/7/2011 and 5/4/2011 04/22/2011 VENDOR NAME INVOICE AMOUNT INVOICE DESCRIPTION INVOICE # CHECK # Dept 10 ECONOMIC & COMMUNITY DEVELOPMENT DEPT PACIFIC BIOFACILITIES ASSOC. 8,043.75 PRELIMINARY FEASIBILITY ANALYSIS 7405 203735 PASS JANITORIAL SERVICE 225.00 GREEN HOUSE CLEANING 2679 203738 VORTEX INDUSTRIES, INC 286.66 PROP RENTAL REPAIRS 306 SPRUCE 45- 593052 -1 203756 Payments Issued for ECONOMIC & COMMUNITY $8,555.41 DEVELOPMENT DEPT Payments Made on 4/22/2011 $8,555.41 Printed on: 05/06/2011 Page 6 of 67 City of South San Francisco Payment Listing for Redevelopment Agency Board Review Payments Issued between 4/7/2011 and 5/4/2011 04/27/2011 VENDOR NAME INVOICE AMOUNT INVOICE DESCRIPTION INVOICE # CHECK # Dept 10 ECONOMIC & COMMUNITY DEVELOPMENT DEPT CENTRAL ROOFING INC 475.00 ROOF REPAIR - 311 TAMARACK - UNIT 1 8043 203772 PACIFIC BIOFACILITIES ASSOC. 15,075.00 PRELIMINARY FEASIBILITY ANALYSIS 7463 203805 U S BANK CORP PAYMENT SYSTEM 58.87 NF- SUPPLIES FOR XRAY HOUSE cc207459 203829 Payments Issued for ECONOMIC & COMMUNITY $15,608.87 DEVELOPMENT DEPT Dept 99 CIP CENTRAL ROOFING INC 11,600.00 NEW FLASHINGS BREEZEWAY 8050 203772 Payments Issued for CIP $11,600.00 Payments Made on 4/27/2011 $27,208.87 'rinted on: 05/06/2011 Page 7 of 67 City of South San Francisco Payment Listing for Redevelopment Agency Board Review Payments Issued between 4/7/2011 and 5/4/2011 05/04/2011 VENDOR NAME INVOICE AMOUNT INVOICE DESCRIPTION INVOICE # CHECK # Dept 10 ECONOMIC & COMMUNITY DEVELOPMENT DEPT CITY MECHANICAL INC 458.53 PM SERVICE - EXHAUST SYSTEM 306 SPRUCE 39017 203920 DEA SECURITY SYSTEMS CO INC 195.00 FIRE ALARM MONITORING 306 SPRUCE 1923217 203926 EDESIGNC INC. 5,625.00 BOUN GUSTO RESTORATION 100 -030 203930 O'DONOGHUE CONSTRUCTION 1,200.00 SIDING AND SHEETROCK REPAIRS 311 TAMARAC 04/01/11 203969 SAN MATEO COUNTY CONTROLLER'S 1,755,786.00 SERAF - SUPPLLM. ERAF PMT REQ BY STATE 5/10/2011 203983 SITIKE COUNSELING CENTER 2,575.00 3RD QUARTER CDBG GRANT FY 10/11 1385 203991 WESTERN EXTERMINATOR CO 91.50 MAR11 PEST CONTROL - 306 SPRUCE 008 - 01065148 -7 204025 Payments Issued for ECONOMIC & COMMUNITY $1,765,931.03 DEVELOPMENT DEPT Payments Made on 5/4/2011 $1,765,931.03 Total REDEVELOPMENT AGENCY PAYMENTS $1,969,948.24 o ,?.zf Redevelopment Agenc StaffReport c ' 4 LIFOR� 1 � DATE: May 11, 2011 .� TO: The Redevelopment Agency Board FROM: Jim Steele, Agency Finance Officer SUBJECT: A RESOLUTION AUTHORIZING THE L -,, i IVE DIRECTOR TO EXECUTE AN AGREEMENT WITH THE COUNTY OF SAN MATEO TO PREPAY THE REDEVELOPMENT AGENCY OF SOUTH SAN FRANCISCO'S SHARE OF A MULTI -YEAR PROPERTY TAX SETTLEMENT BETWEEN THE COUNTY OF SAN MATEO AND GENENTECH INC. RECOMMENDATION It is recommended that the Redevelopment Agency Board adopt a resolution authorizing the Redevelopment Agency prepayment of its share of the San Mateo County prior years' property tax settlement with Genentech Inc. (Genentech), and amending the 2010 -11 Redevelopment Agency operating budget. BACKGROUND/DISCUS SION At the March 2, 2011 joint City Council and Redevelopment Agency (Agency) meeting, Resolution 14- 2011 was approved by the Agency authorizing a payment up to $10,000,000 to San Mateo County (County) for the pending Genentech property tax settlement (see Exhibit A). Since that time, the County has reached a final settlement with Genentech for several years of back property tax appeals (Exhibit B). The County has provided a semi -final estimate of the amount due from the Agency of just over $7.0 million (Exhibit C). That $7.0 million would be due from the Agency over four fiscal years through 2013 -14, and those payments would be deducted from Agency property tax payments in those four years. The Redevelopment Agency Board (Board) may recall that staff has already set aside funds to pay this settlement. Staff has been in discussions with the County Controller's Office, and the County indicated that the amounts in the settlement as shown in Exhibit C include calculations of interest payments to Genentech at the at the rate of 3% annually through the end of the payment period. Agency staff has notified the County that the Agency has set aside dollars already for the payment, and asked if savings might accrue to the Agency by prepaying if Genentech agrees that receiving a large payment up front would be worth foregoing some of the interest they would have received over seven years. The Controller's Office has told City staff that they would be willing to discuss this issue with Genentech and the County Counsel's Office pending South San Francisco Redevelopment Agency Board approval, and the net result would be that the Agency's share of the settlement could go down. Redevelopment Agency Staff Report County Property Tax Refund May 11,2011 Page 2 of 2 The attached resolution therefore gives the Executive Director the authority to sign off on any such agreement reached by the County with Genentech to prepay the Agency's share of approximately $7.0 million, so long as the Agency realizes interest savings from prepaying. Although Board approval was previously received on March 2, 2011 to pay the County, the context for that approval was that the State was on the verge of eliminating all Redevelopment Agencies as part of the State budget process, and Agency staff recommended getting the settlement payment off its books. However, that State budget threat no longer appears to be as likely or as imminent, so staff wanted to get Board confirmation to proceed in order to realize the interest savings on the settlement payment. FISCAL IMPACT Staff recommends that the attached resolution be approved because of the potential interest savings over the amount that the Agency can earn in the current investment portfolio (just over 1 %). CONCLUSION Adopting the attached resolution will provide for an expeditious payment of property taxes owed to the County for the Genentech property tax settlement and will save interest costs. By: r APprov:d: Jim SI ele . agel Agen Finance Officer Executive Director Attachments: Resolution Exhibit A: March 2, 2011 Staff Report and Resolution 14 -2011 Exhibit B: Press Release by San Mateo County Dated April 8, 2011 Exhibit C: County semi -final calculation of the Genentech Property Tax Settlement due from the South San Francisco Redevelopment Agency through 2013 -14 KR/JSBN:ed RESOLUTION NO. REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE AN AGREEEMENT WITH THE COUNTY OF SAN MATEO TO PREPAY THE REDEVELOPMENT AGENCY OF SOUTH SAN FRANCISCO'S SHARE OF A MULTI -YEAR PROPERTY TAX SETTLEMENT BETWEEN THE COUNTY OF SAN MATEO AND GENENTECH, INC. WHEREAS, on or around March 21, 2008 Superior Court Judge Carol L. Middlesteadt issued a Notice of Entry of Writ of Mandate and Remand instructions to the County of San Mateo ( "County ") to refund prior years' property taxes paid by Genentech Inc. ( "Genentech ") (Case No. CIV 456781); and WHEREAS, on or around April 8, 2011, the County and Genentech negotiated a settlement that would pay Genentech in resolution of Case No. CIV 456781 as well as for several other tax years' disputed by Genentech ( "Settlement "); and WHEREAS, the County has estimated that the Settlement will reduce the Redevelopment Agency of the City of South San Francisco's ( "Agency ") property tax increment through 2013 -14 in the amount of $7,037,826.50, as shown in Exhibit C, attached hereto and incorporated as part of this Resolution; and WHEREAS, the Settlement is referred to in a press release shown as Exhibit B, attached hereto and incorporated as part of this Resolution; and WHEREAS, the Redevelopment Agency Board of South San Francisco ( "Board ") believes it would be expeditious to pay the County of San Mateo up front in one installment for the Agency's share of the multi -year settlement, so that the Agency may realize interest savings over time; and WHEREAS, if the County is able to negotiate a lower payment due to lowered interest earnings with Genentech, the County will provide a document to the Agency Executive Director demonstrating such savings. NOW, THEREFORE, BE IT RESOLVED, by the Redevelopment Agency of the City of South San Francisco that it hereby authorizes the Executive Director to execute an agreement on behalf of the Agency to pay the County of San Mateo a total not to exceed $7,100,000 to reflect the final settlement amount due to the County from the Settlement referred to above, in the event that such prepayment realizes savings for the Agency, and to execute such additional instruments as may be necessary or desirable in order to carry out the intent of this Resolution. BE IT FURTHER RESOLVED, by the Redevelopment Agency of the City of South San Francisco that the Redevelopment Agency operating budget may be correspondingly adjusted to reflect that final payment amount and that funds have already been set aside to satisfy this obligation. * * * * * I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Redevelopment Agency of the City of South San Francisco at a meeting held on the day of 2011 by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: Agency Secretary 1637559.1 Exhibit A e oz f Redevelopment Agenc 0 , fi StaffReport .4z„„„„..$). DATE: March 2, 2011 TO: The Redevelopment Agency Board FROM: Jim Steele, Agency Finance Officer SUBJECT: RESOLUTION AUTHORIZING THE EXECUTIVE DIRECTOR TO MAKE A PAYMENT TO SAN MATEO COUNTY FOR THE SHARE OF THE REDEVELOPMENT AGENCY'S OBLIGATION TO THE COUNTY TO REIMBURSE GENENTECH INC. FOR PROPERTY TAXES THAT WERE ORDERED REFUNDED BY THE SAN MATEO COUNTY SUPERIOR COURT RECOMMENDATION It is recommended that the Board approve the attached resolution which authorizes the Executive Director to make a payment to San Mateo County for the Redevelopment Agency's (Agency) share of a prior year property tax refund ordered by the San Mateo County Superior Court, and amending the 2010 -11 Redevelopment Agency operating budget. BACKGROUND/DISCUSSION As the Board may recall, on March 21, 2008 Superior Court Judge Carol L. Middlesteadt issued allotice of Entry of Writ of Mandate and Remand instructions (the judgment) to the County of San Mateo (the County) to refund prior years' property taxes paid by Genentech Inc. (Case No. CIV 456781). The Board may also recall that the nature of the judgment was based on a clerical error in the way the appeals were heard and noticed by the County Property Tax Appeals Board. Under property tax refund procedures, any refunds that accrue to an area within a Redevelopment Agency borders must be refunded directly from that Agency. (Refunds that occur in a general city, non - Redevelopment Agency boundary, are shared across all taxing entities in San Mateo County). In July 2008, the County initially sent the Agency a notice that it would be obligated to remit $8,895,865. However, the County then indicated that it was continuing to seek payment terms from Genentech and perhaps wrap up the payment into the terms of other property tax appeals that were ongoing. Due to the Governor's proposal to eliminate Redevelopment Agencies, staff believes it would be expeditious to work with the County to get a final billing for the Agency's obligation for the Genentech refund over the next 30 days, and issue payment. That payment would remove the obligation from the Agency's books and would clarify somewhat the financial position of the Agency, which would be a positive development if the Governor's proposal is successful. Redevelopment Agency Staff Report County Property Tax Refund March 2, 2011 Page 2 of 2 FISCAL IMPACT $8.9 million has already been booked as a liability (that is, reduced from reserves) for the Genentech property tax refund. Approval of the attached resolution authorizes the Executive Director to make a payment to the County. The attached resolution gives the City Manager a not to exceed authority of $10.0 million. Staff believes the amount, with accumulated interest, will be closer to $9.25 million. Staff will not make the payment without an invoice and reconciliation from the County Controller's Office. CONCLUSION Adopting the attached resolution will provide for an expeditious payment of property taxes owned to Genentech per Court order, and will therefore clarify the Agency's financial standing in its financial statements. By: i"" "_ Approve I • f �"'1 Jim %teele . Nagel Agency Finance Officer Executive Director Attachment: Resolution RESOLUTION NO. 14 -2011 REDEVELOPMENT AGENCY OF THE CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION OF THE BOARD OF THE REDEVELOPMENT AGENCY OF SOUTH SAN FRANCISCO AUTHORIZING THE EXECUTIVE DIRECTOR TO MAKE A PAYMENT TO SAN MATEO COUNTY FOR THE SHARE OF THE REDEVELOPMENT AGENCY'S OBLIGATION TO THE COUNTY TO REIMBURSE GENENTECH INC. FOR PROPERTY TAXES THAT WERE ORDERED REFUNDED BY THE SAN MATEO COUNTY SUPERIOR COURT WHEREAS, on or around March 21, 2008 Superior Court Judge Carol L. Middlesteadt issued a Notice of Entry of Writ of Mandate and Remand instructions (the judgment) to the County of San Mateo to refund prior years' property taxes paid by Genentech Inc. (Case No. CIV 456781); and WHEREAS, as a result of that judgment the Redevelopment Agency of the City of South San Francisco (the Agency) would have future tax increment deducted from its share of property tax payments; and WHEREAS, the County and Genentech continue to discuss these and other related property tax appeals related to other years; and WHEREAS, the Redevelopment Agency Board of South San Francisco (the Board) believes it would be expeditious to pay the County of San Mateo for the share of the judgment that the Agency will end up owing in the future, given the uncertainty over the future status of Redevelopment Agencies in the State of California; and, WHEREAS, the County of San Mateo estimated that the South San Francisco Redevelopment Agency's share of the judgment to be $8,895,865 as of July 16, 2008; and, WHEREAS, the County may assess additional interest accruals on that balance prior to receiving the payment from the County; and, WHEREAS, staff has already booked $8.9 million as a liability in the Redevelopment Agency's financial statements, meaning, has already reduced reserves to cover this payment, but the payment has not yet been budgeted. NOW, THEREFORE, BE IT RESOLVED, by the Board that if the State of California takes action to terminate the activities of the Redevelopment Agency with an effective date of prior to June 30, 2011, the Agency Executive Director is hereby authorized to pay the County of San Mateo a total of not to exceed $10,000,000 to reflect the final amount provided by the County, including interest that may have accumulated since 2008, and the Redevelopment Agency operating budget is hereby correspondingly increased. Funds have been set aside as a liability to fund this obligation. I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Redevelopment Agency of the City of South San Francisco at a special meeting held on the 2n day of March, 2011 by the following vote: AYES: Boardmembers Mark Addiego, Pedro Gonzalez, and Karyl Matsumoto, Vice Chair Richard A. Garbarino NOES: None ABSTAIN: Chairman Kevin Mullin ABSENT: None ATTEST: ,J / 44( City Clerk Exhibit B News Release County of San Mateo 400 County Government Canter, Redwood City. California 94063 DATE DATE DATE San Mateo County and Genentech Reach Tax Settlement REDWOOD CITY, Calif. — The County of San Mateo and Genentech have resolved property tax claims brought by Genentech spanning 10 years. The County has agreed to credit Genentech with $26.5 million in property taxes over the next six years in order to settle claims that the company paid excess taxes for the years 1990 through 1999. The County and Genentech worked diligently to resolve disagreements over the valuation of Genentech's property. Both parties are pleased to have reached an agreement that brings to an end years of litigation and both look forward to continued cooperation between the County and the company, the largest property tax payer in San Mateo County. The settlement filed in San Mateo County Superior Court resolves all claims for the tax years 1990 through 1999. The total of $26,525,000 will be spread over six years and will be in the form of tax credits rather than refund payments. The settlement calls for Genentech to receive a tax credit of approximately $7 million for the 2011 and 2012 tax years and then approximately $3 million a year over the next four years. Although the loss of property tax revenue is substantial, Genentech's willingness to allow the credits to be applied over a six -year period considerably softens the impact. San Mateo County collected approximately $1.35 billion in secured roll property taxes in 2010, with Genentech's tax payments for the year approaching $20 Million. On an annual basis, the settlement credit amount represents less than one third of one percent of all property taxes collected in 2010. For each dollar in property tax paid in San Mateo County, 45 cents goes to schools, 24 cents to cities and redevelopment agencies, 22 cents to the County, and 9 cents to special districts such as for flood control and mosquito abatement. Refunds of property tax overpayments are collected from these entities applying the same formula as used in the distribution of the taxes paid. The original dispute arose when Genentech challenged the methodology used by the County Assessor's Office's to determine the taxable value of its land, buildings, fixtures, and equipment, and Genentech has filed appeals with the San Mateo County Assessment Appeals Board every year since 1990. The settlement not only includes a resolution of the valuation of the property at issue, but also encompasses a refund due pursuant to a 2008 Court- issued Writ, ordering the enrollment of the property values as shown on certain Genentech assessment appeal applications for tax years 1994 through 1999. "In the County's view, many of the issues and differences between the County Assessor and Genentech arise from the fact that until 2000, there were few, if any, statewide guidelines or standards for the assessment of biopharmaceutical companies," said John Beiers, San Mateo County Counsel. Both parties look forward to using the momentum of this settlement agreement to discuss the resolution of outstanding tax appeals without further litigation. Media Contact: Lee Thompson Chief Deputy County Counsel (650) 363 -4697 RPT 1199 Exhibit C Apportionment of the General Tax Rate Genentech Refunds, SSF Only FY 10/11 FY 11/12 FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16117 TAX Ist 2nd 3rd 4th 5th 6th 7th ACCT PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT PAYMENT TOTAL NO. DESCRIPTION SSF RDA (497,774.98) (3,421,215.00) (2,760,254.20) (358,582.32) 0.00 0.00 0.00 (7,037,826.50) S 1Revenues \Property Tax Into \10-11 Prop Tax Into\Genentech Settlement Schedule estimate 4 - 15 - 11 .X1S