HomeMy WebLinkAbout2016-034 RESOLUTION NO. 2016-34
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
2 BERNARDINO AUTHORIZING THE EXECUTION OF AN IN LIEU VEHICLE
3 LICENSE FEE (VLF SWAP) REVENUE SHARING AGREEMENT AMONG THE
CITY OF SAN BERNARDINO, THE COUNTY OF SAN BERNARDINO, AND THE
4 SAN BERNARDINO COUNTY FIRE PROTECTION DISTRICT FOR THE PURPOSES
OF FUNDING THE ANNEXATION OF FIRE AND RELATED SERVICES
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WHEREAS, on August 24, 2015, the Mayor and Common Council of the City of San
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Bernardino (City) adopted Resolution No. 2015-195, authorizing the filing of an application to
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the Local Agency Formation Commission (LAFCO) to initiate proceedings for a sphere of
8 influence amendment(Amendment) of the sphere of influence of the San Bernardino County
9 Fire Protection District (SBCFPD) to include the City, and a reorganization (Reorganization)to
10 include annexation of all territory within the City to the SBCFPD, its Valley Service Zone, and
11 its Service Zone FP-5 for the purposes of fire protection and emergency medical services; and
12 WHEREAS, on September 15, 2015, the SBCFPD Board of Directors adopted
13 Resolution No. 2015-183, requesting LAFCO to initiate proceedings for LAFCO approval of
the Amendment and Reorganization; and
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WHEREAS, the City and SBCFPD thereafter applied to LAFCO to initiate proceedings
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for approval of the Amendment and Reorganization; and
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17 WHEREAS, on January 27, 2015, LAFCO adopted LAFCO Resolutions Nos. 3211 and
18 3212, approving the initiation of such proceedings; and
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WHEREAS, section 99 of the Revenue and Taxation Code of the State of California
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requires that parties seeking LAFCO approval of a proposed annexation such as the
21 Reorganization adopt resolutions for the reallocation of property tax revenues between the
22 parties to adjust the revenues to reflect the expansion of the service area of the jurisdiction that
23 will be required to provide expanded services as a result of the annexation; and
WHEREAS, LAFCO Resolution No. 3211 requires that the City and SBCFPD enter
24 into an agreement for such reallocation of property tax revenues; and
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WHEREAS, it has been determined by the City and SBCFPD that the City's property
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tax revenues are insufficient to fund the services to be provided within the City by SBCFPD as a
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result of the Amendment and Reorganization;
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WHEREAS, in addition to base property tax revenue, the City also receives property
4 tax revenue in lieu of vehicle license fee revenue (VLF Swap Revenue)to compensate for the
5 State of California's reduction in the vehicle license fee revenue received by the City as a result
6 of decreasing the vehicle license fee; and
7 WHEREAS, to compensate for the insufficiency of the City's property tax revenues to
8 fund SBCFPD's services, the City and SBCFPD have agreed that in addition to the City's
9 property tax revenues, the City will transfer to SBCFPD thirty-five percent (35%) of the City's
VLF Swap Revenue; and
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WHEREAS, the City is a member of the Inland Valley Development Agency (IVDA), a
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joint powers authority formed pursuant to an Amended Joint Exercise of Powers Agreement
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(Inland Valley Development Agency), dated as of February 12, 1990, by and among the Cities
13 of San Bernardino, Colton, and Loma Linda and the County of San Bernardino, to pursue
14 economic development within an area of San Bernardino County that includes a portion of the
15 City; and
16 WHEREAS, in 2014, IVDA and the Successor Agency to the IVDA Redevelopment
17 Agency (IVDA Successor Agency)jointly issued their Tax Allocation Refunding Bonds, Series
18 2014A and 2014B (IVDA Bonds), and in connection therewith executed an Indenture of Trust
19 dated May 1, 2014 (IVDA Bond Indenture) with U.S. Bank National Association, as trustee;
and
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WHEREAS, pursuant to Section 5.01 of the IVDA Bond Indenture, IVDA and the
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IVDA Successor Agency pledged as security for the payment of the IVDA Bonds the property
22 tax revenue from parcels within the IVDA boundaries (IVDA Tax Revenue); and
23 WHEREAS, pursuant to the terms of the February 12, 1990 Amended Joint Exercise of
24 Powers Agreement, the City is entitled to receive a portion of the IVDA Tax Revenue from
25 parcels within the City (City's IVDA Tax Revenue); and
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WHEREAS, transfer of the City's IVDA Tax Revenue to SBCFPD in connection with
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the Reorganization could impair the pledge of the IVDA Tax Revenue as security for the
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payment of the IVDA Bonds, and violate the terms of the IVDA Bond Indenture; and
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WHEREAS, to avoid any such impairment, the City and SBCFPD have agreed that,
4 until the IVDA Bonds, or any related obligations under the IVDA Bond Indenture that may be
5 impaired by the transfer of the City's IVDA Tax Revenue to SBCFPD, are retired or
6 restructured so that such impairment cannot occur, the City's IVDA Tax Revenue will not be
7 transferred to SBCFPD; and
8 WHEREAS, to compensate for the temporary exclusion of the City's IVDA Tax
9 Revenue from the tax revenue to be transferred to SBCFPD, the City and SBCFPD have agreed
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that while the exclusion is in effect, the City will transfer to SBCFPD, in addition to the thirty-
five percent(35%) of the City's VLF Swap Revenue to be permanently transferred to SBCFPD,
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an amount of the City's VLF Swap Revenue that is equal to the City's IVDA Tax Revenue; and
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WHEREAS, the City and SBCFPD have incorporated all of the terms of their
13 agreement regarding the transfer of property tax revenue in connection with the Amendment
14 and Reorganization into an"In Lieu Vehicle License Fee (VLF Swap) Revenue Sharing
15 Agreement Among the City of San Bernardino, the County of San Bernardino, and the San
16 Bernardino County Fire Protection District for the purposes of funding the annexation of fire
17 and related services" (Revenue Sharing Agreement); and
18 WHEREAS, LAFCO's environmental consultant has concluded that the Amendment
19 and Reorganization are exempt from the California Environmental Quality Act(CEQA) under
Section 15061(b)(3) of the State CEQA Guidelines (Cal. Code Regs. tit. 14, § 1506 1) because
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there is no possibility that they may have a significant effect on the environment.
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NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON
22 COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
23 SECTION 1. The foregoing recitals are true and correct and are made a substantive
24 Part of this Resolution.
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SECTION 2. The Revenue Sharing Agreement, a true and correct copy of which is
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2 attached to this Resolution as Exhibit A, accurately sets forth the agreement of the City and
3 SBCFPD regarding the allocation of property tax revenue and VLF Swap revenue between them
4 in connection with the Amendment and Reorganization, and the terms of the Revenue Sharing
5 Agreement are incorporated by reference and made a substantive part of this Resolution.
6 SECTION 3. The City agrees to accept the exchange of property tax revenues provided
7 for in the Revenue Sharing Agreement.
8 SECTION 4. In compliance with the Revenue Sharing Agreement, upon the
9 completion of the Amendment and Reorganization and the commencement of SBCFPD's
to provision of services to the City, the City shall cause to be transferred to SBCFPD all of the
11 City's property tax revenue except as stated in Section 5 of this Resolution,together with thirty-
12 five percent (35%) of the City's VLF Swap Revenue and the additional amount of the City's
13 VLF Swap Revenue described in Section 5 of this Resolution.
SECTION 5. Until the IVDA Bonds, or any related obligations under the IVDA Bond
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Indenture that may be impaired by the transfer of the City's IVDA Tax Revenue to SBCFPD,
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are retired or restructured so that such impairment cannot occur, the City's IVDA Tax Revenue
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will not be transferred to SBCFPD, but instead an amount of the City's VLF Swap Revenue
17 equal to the City's IVDA Tax Revenue will be transferred to SBCFPD.
18 SECTION 6. When the IVDA Bonds, or any related obligations under the IVDA Bond
19 Indenture that may be impaired by the transfer of the City's IVDA Tax Revenue to SBCFPD,
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are retired or restructured so that such impairment cannot occur, the City shall cause to be
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transferred to SBCFPD all of the City's property tax revenue, including the City's IVDA Tax
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Revenue, and this transfer shall continue permanently unless otherwise mutually agreed by the
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City and SBCFPD.
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SECTION 7. The City Manager is authorized and directed to execute on behalf of the
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City the Revenue Sharing Agreement, a copy of which is attached to this Resolution as Exhibit
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A and incorporated herein by reference, and to execute such additional documents and take such
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other actions as may be needed for the City to comply with the terms of the Revenue Sharing
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Agreement, including but not limited to agreeing on behalf of the City to ministerial revisions or
4 other revisions to the Revenue Sharing Agreement that are necessary to give effect to the intent
5 of the parties to the Agreement and that do not materially affect the interests of the City.
6 SECTION 8. The Revenue Sharing Agreement is exempt from CEQA because there is
7 no possibility that its performance may have a significant effect on the environment.
8 SECTION 9. This Resolution shall take effect immediately upon its adoption.
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN
1 BERNARDINO AUTHORIZING THE EXECUTION OF AN IN LIEU VEHICLE
2 LICENSE FEE (VLF SWAP) REVENUE SHARING AGREEMENT BETWEEN THE
CITY OF SAN BERNARDINO AND THE SAN BERNARDINO COUNTY FIRE
3 PROTECTION DISTRICT FOR THE PURPOSES OF FUNDING THE ANNEXATION
OF FIRE AND RELATED SERVICES
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I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
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Common Council of the City of San Bernardino at a joint special meeting thereof, held on the
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4th day of March, 2016, by the following vote, to wit:
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Council Members: AYES NAYS ABSTAIN ABSENT
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9 MARQUEZ X
10 BARRIOS X
11 VALDIVIA X
12 SHORETT X
13 NICKEL X
14 JOHNSON X
15 MULVIHILL X
16 � l
17 GeorgeaAh Hanna, UNW, city erk
18 The foregoing resolution is hereby approved this _ day of March, 2016.
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�C
20
R. Carey DaVrnardino Mayor
21 City of San
Approved as to form:
22 Gary D. Saenz, City Attorney
23 B ^
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2016-34
In Lieu Vehicle License Fee(VLF Swap)Revenue Sharing Agreement
Among the City of San Bernardino,the County of San Bernardino,and the San Bernardino County Fire
Protection District for the purposes of funding the annexation of fire and related services
WHEREAS,the City of San Bernardino (City) and the San Bernardino County Fire Protection District
(SBCFPD) have jointly initiated an application to the Local Agency Formation Commission (LAFCO)for
reorganization to annex the area within the City into the SBCFPD; and
WHEREAS,the City's share of property tax, in its entirety,will ultimately be transferred to SBCFPD as
part of this reorganization by adoption of a property tax transfer resolution approved by the County
Board of Supervisors as part of the LAFCO reorganization process; and
WHEREAS,the City's share of property tax to be transferred is insufficient to fund the costs of services to
be provided by the SBCFPD; and
WHEREAS, as a term and condition of annexation the City shall permanently transfer a percentage of its
VLF Swap revenue, in an amount defined in this Agreement,to the SBCFPD to address the insufficiency
of property tax revenues to fund services; and
WHEREAS,the City is a member of the Inland Valley Development Agency, a joint powers authority
organized and existing under the laws of the State of California and a federal base reuse authority
(IVDA), pursuant to the Amended Joint Exercise of Powers Agreement dated as of February 12, 1990
(JPA Agreement); and
WHEREAS, pursuant to the redevelopment plan and the JPA Agreement there is a sharing of property
tax revenue between the City and IVDA for parcels within the IVDA boundaries; and
WHEREAS, IVDA also has a separate public agency as the Successor Agency to the IVDA Redevelopment
Agency; and
WHEREAS, on or about May 15, 2014, IVDA issued its Successor Agency to the Inland Valley
Development Agency Tax Allocation Refunding Bonds, Series 2014A and Successor Agency to the Inland
Valley Development Agency Tax Allocation Refunding Bonds, Series 2014B (together,the IVDA Bonds)
pursuant to an Indenture of Trust, dated as of May 1, 2014(Bond Indenture) by and between IVDA as
joint powers authority in its own capacity and as Successor Agency(together, the Issuer)and U.S. Bank
National Association,or any other association or corporation which may at any time be substituted in its
place as trustee; and
WHEREAS, Issuer has pledged the tax revenues it receives pursuant to the redevelopment plan and the
JPA Agreement(Tax Revenues as defined in the Bond Indenture)to the repayment of the IVDA Bonds
and related obligations under the Bond Indenture; and
WHEREAS,the pledge of Tax Revenues to holders of the IVDA Bonds and related obligations under the
Bond Indenture could be impaired by a transfer of property tax within the IVDA boundaries; and
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2016-34
WHEREAS,to avoid such impairment of IVDA's obligation to holders of the IVDA Bonds and other related
obligations under the Bond Indenture,the County's Property Tax Transfer Resolution will delay the
transfer of property tax within the IVDA boundaries from the City to the SBCFPD; and
WHEREAS, an agreement between the City and the SBCFPD is necessary to provide a backfill of the
losses to the SBCFPD as a result of the delay in transferring property tax within the IVDA boundaries
with an equivalent supplemental amount of VLF Swap revenue, in addition to the permanent
percentage of VLF Swap revenue transfer; and
WHEREAS,there is no intent to adversely impact the pledge of revenues or impair the pledge of the
revenue IVDA receives pursuant to the redevelopment plan and the JPA Agreement to the IVDA Bonds
and related obligations under the Bond Indenture and security of the bondholders of the IVDA Bonds;
and
WHEREAS, upon full payment of all IVDA Bonds and their related obligations under the Bond Indenture
or the issuance of bonds issued to refund the IVDA Bonds that recharacterizes the pledge so as to allow
for the transfer of property tax without concern of impairment,the City's remaining share of property
tax, in its entirety, will be transferred to the SBCFPD and the supplemental transfer of VLF Swap revenue
will terminate; and
WHEREAS,the City has obligations to IVDA pursuant to the JPA Agreement related to revenue sharing
that are independent of the bond impairment concerns; and
WHEREAS,the reorganization of services between the City and SBCFPD is not intended to financially
affect IVDA, resulting in the need for an agreement that the SBCFPD will fulfill the property tax revenue
sharing requirements to IVDA relating to those parcels within the IVDA boundaries.
NOW,THEREFORE, the City and the SBCFPD hereby agree as follows:
Section 1. Incorporation of Recitals. The recitals set forth above are true and correct and are
incorporated herein.
Section 2. Definitions
(a) Agreement: This agreement
(b) Initial Allocation Period:The Initial Allocation Period will commence on the effective date of the
reorganization of services between the City and the SBDFPD. The Initial Allocation Period will
stay in effect for the entire period during which the IVDA Bonds or related obligations under the
Bond Indenture are outstanding that may be impaired by the transfer of property tax revenue
from the City to the SBCFPD within the IVDA boundaries. The Initial Allocation Period shall end
at the earlier of:
a. Notification by the IVDA of the issuance of bonds to refund the IVDA Bonds that
recharacterizes the pledge so as to allow for the transfer of property tax without
concern of impairment; or.
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b. The final maturity of the IVDA Bonds and the satisfaction of any related obligations
under the Bond Indenture which may have survived the maturity of the IVDA Bonds.
(c) Permanent Allocation Period:The period immediately following the Initial Allocation Period.
There is no termination date of the Permanent Allocation Period.
(d) Property Tax Transfer Resolution: The County Board of Supervisors resolutions, or amended
resolutions,transferring property tax in two phases,the Initial Allocation Period and the
Permanent Allocation Period, from the City to the SBCFPD adopted as part of the reorganization
of services between the City and SBCFPD.
(e) VLF Swap Percentage: The percentage of VLF Swap revenue attributable to the City that
pursuant to this Agreement shall be assigned to SBCFPD in perpetuity. The amount of the VLF
Swap Percentage is 35%,to be allocated 94%to the Valley Service Zone and 6%to
Administration.
(f) VLF Swap Supplemental Amount: The VLF Swap Supplemental Amount shall be equal to the
amount of total property tax revenue not transferred to SBCFPD as a result of the delay in
transferring the City's share of property tax within the IVDA boundaries during the Initial
Allocation Period. The VLF Swap Supplemental Amount shall be allocated 94%to the Valley
Service Zone and 6%to Administration.
Section 3. Initial Allocation Period. During the Initial Allocation Period,the San Bernardino County
Auditor-Controller/Treasurer/Tax Collector(ATC) shall calculate the VLF Swap allocation in accordance
with governing law, currently Revenue and Taxation Code section 97.70, and shall distribute funds in the
amount calculated to the SBCFPD at such time as the funds would have been distributed to the City, as
follows:
(a) VLF Swap Percentage, as defined in the Agreement; plus
(b) VLF Swap Supplemental Amount, as defined in the Agreement; plus
(c) All of the City's property tax revenue except property tax within the boundaries of the IVDA, as
described within the Property Tax Transfer Resolution
Section 3.1. VLF Swap Supplemental Amount. The calculation of the VLF Swap Supplemental Amount
should include all distributions of property tax to the City that were not distributed to the SBCFPD as a
result of the delay in transferring the City's share of property tax within the IVDA boundaries during the
Initial Allocation Period. The calculation should include the following property tax revenues distributed
to the City during the Initial Allocation Period:
(a) base property tax; and
(b) pass through payments, negotiated or statutory; and
(c) residual distributions as a result of redevelopment dissolution; and
(d) any other property tax that would have come to the SBCFPD but for the delay in transferring the
City's share of property tax to SBCFPD within the IVDA boundaries
Section 3.2. Mismatch of Distribution Timing. Distribution of property tax and VLF Swap by the ATC may
occur at different times and/or frequencies. In the event that distribution dates of property tax and VLF
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Swap do not align,the ATC shall accumulate between VLF Swap Supplemental Payment transfers the
amount of property taxes distributed to the City as a result of the delay in property tax transfer during
the Initial Allocation Period. Such accumulated amount shall be distributed to the SBCFPD by the ATC at
the next VLF Swap distribution date. As a result of the likely mismatch in timing it is anticipated that a
final one-time VLF Swap Supplemental Payment representing accumulated amounts not yet distributed
at the end of the Initial Allocation Period will be required during the Permanent Allocation Period
Section 4. Permanent Allocation Period. During the Permanent Allocation Period VLF Swap funds will be
calculated in accordance with governing law, currently Revenue and Taxation Code section 97.70, by the
ATC and will be distributed to the SBCFPD at such time as they would have been distributed to the City,
as follows:
(a) VLF Swap Percentage, as defined in the Agreement; plus
(b) All of the City's property tax revenue including that within the boundaries of IVDA, as described
within the Property Tax Transfer Resolution
Section 5. Term. This agreement is permanent to provide a sustainable funding source for the services
reorganized under the related LAFCO action.
Section 6. Renegotiation of Terms. As a result of certain known future events, Section 2(e) of this
Agreement defining the percentage of the City's VLF Swap revenue to be diverted to SBCFPD may be
amended by mutual written agreement of the City and the SBCFPD. Those known future events are the
future termination of Community Facilities District#1033,the elimination of residential parcel taxes
within Community Facilities District#1033 as a result of the LAFCO condition of approval of annexation,
both of which will result in reduced revenue to the SBCFPD, and the ongoing process of redevelopment
agency dissolution, which will result in additional revenue to SBCFPD. The parties' purpose in providing
for the amendment of Section 2(e) is to ensure that revenues transferred from the City to SBCFPD and
services provided to the City by SBCFPD will be appropriately adjusted so as to be commensurate with
one another, and consistent with the Service Plan developed with the annexation. Specifically,the
parties intend to provide for a process that will permit over-and underpayments, limited to those
resulting from the events identified herein,to be recouped in a timely manner. Amendments to Section
2(e)can be made as one-time or ongoing adjustments and shall be memorialized as individual
attachments to this agreement that provide specific direction to the ATC regarding the new distribution
of VLF Swap funds. Amendments to Section 2(e) authorized under this Section shall be limited to those
necessary to adjust for the specific events identified in this Section.
Renegotiation of terms under this Section can be requested by either party, limited to the following
dates:
(a) The first, second, and third anniversary of approval by all parties of this agreement; and
(b) The 5th anniversary and every 3 years thereafter; and
(c) Notwithstanding(b),the final opportunity to renegotiate will occur at the later date of either
the final dissolution of the City's redevelopment successor agency or the dissolution of
Community Facilities District#1033
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Section 7. VLF Swap Amendment or Termination. The City and the SBCFPD recognize that the VLF Swap
is a funding mechanism created by the State that may in the future be modified or eliminated. In the
event that the VLF Swap is reduced or eliminated at a future date,the SBCFPD shall be entitled to a
share of any successor revenue to the VLF Swap that the State may put in place in a dollar amount
equivalent to the amount of VLF Swap revenue lost by the SBCFPD as a result of the State's action. Such
amount shall grow with the successor funding stream on a pro-rata basis, e.g. if the SBCFPD gets 40%of
the City's share of the successor revenue to make up for the lost VLF Swap,then the SBCFPD shall
participate in 40%of any growth associated with that revenue stream. If such successor revenue is
distributed by the ATC,then it shall be distributed pursuant to this section. If the City is the recipient of
the successor revenue directly from the State, it shall pay within 30 days of each receipt of funds the
appropriate amount, as defined in this section, to the SBCFPD.
Section 8. Covenants Regarding IVDA Bonds and Related Obligations under the Bond Indenture.
Notwithstanding any provision of this Agreement,the parties hereto covenant and agree that(i)there
shall be no impairment of the pledge of, or reduction of the allocation of,Tax Revenues under the Bond
Indenture,the redevelopment plan, or the JPA Agreement except for reductions as may normally occur
outside of the parties' control, such as declining economic conditions or statutory changes as set forth in
the Bond Indenture; (ii)the parties will not amend or modify the covenants in this Section 8; (iii) IVDA as
well as the Trustee and the Insurer under the Bond Indenture shall be third party beneficiaries of the
covenants in this Section 8; (iv) Neither IVDA nor the Trustee or the Insurer shall be third party
beneficiaries as to the VLF swap provisions of this Agreement. The County of San Bernardino (the
County)will give notice to IVDA of any proposed amendment to this Agreement at least 45 calendar
days prior to such proposed amendment.
The provisions of Section 8 shall terminate at the same time as termination is provided for by the Bond
Indenture and pursuant to applicable law.
Section 9. Notice. Any notice to be given pursuant to this Agreement shall be deemed fully given when
made in writing and either served personally, or by facsimile transmission, or deposited in the United
States mail, postage prepaid and addressed as follows:
If to the County:
Deputy Executive Officer/Fire
385 N.Arrowhead,4th Floor
San Bernardino, CA 92415-0120
If to the City:
Office of the City Manager
300 N. D Street
San Bernardino, CA 92418
Attn: City Manager
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If to the SBCFPD:
Fire Chief/Fire Warden
San Bernardino County Fire Protection District
157 West Fifth Street, Second Floor
San Bernardino, CA 92415-0451
If to the IVDA:
Executive Director
Inland Valley Development Agency
San Bernardino Airport Authority
1601 East Third Street, Suite 100
San Bernardino, CA 92408
Section 10. Amendments and Modifications. The parties agree that any alterations, amendments or
modifications of the provisions of this Agreement shall be valid only when reduced to writing,executed
and approved by the persons authorized to do so on behalf of each of the parties.
Section 11. Counterpart Signatures Allowed. This Agreement may be executed in counterparts,each of
which shall be deemed an original, and all of which when executed and delivered shall together
constitute one and the same instrument.
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2016-34
In Lieu Vehicle License Fee(VLF Swap)Revenue Sharing Agreement
Among the City of San Bernardino,the County of San Bernardino,and the San Bernardino County Fire
Protection District for the purposes of funding the annexation of fire and related services
Signatures of authorized parties
On behalf of the CITY OF SAN BERNARDINO
By:Mark Scott
Title: City Manager
Date:
Approved as to form:
Gary D. Saenz, City Attorney
By:
Titl .
On behalf of the COUNTY OF SAN BERNARDINO
By:
Title:
Date:
Approved as to form:
Jean-Rene Basle, County Counsel
By:
Title:
On behalf of the SAN BERNARDINO COUNTY FIRE PROTECTION DISTRICT
By:
Title:
Date:
Approved as to form:
Jean-Rene Basle, County Counsel
By:
Title:
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2016-34
In Lieu Vehicle License Fee(VLF Swap) Revenue Sharing Agreement
Among the City of San Bernardino,the County of San Bernardino,and the San Bernardino County Fire
Protection District for the purposes of funding the annexation of fire and related services
WHEREAS,the City of San Bernardino (City) and the San Bernardino County Fire Protection District
(SBCFPD) have jointly initiated an application to the Local Agency Formation Commission (LAFCO)for
reorganization to annex the area within the City into the SBCFPD; and
WHEREAS,the City's share of property tax, in its entirety, will ultimately be transferred to SBCFPD as
part of this reorganization by adoption of a property tax transfer resolution approved by the County
Board of Supervisors as part of the LAFCO reorganization process; and
WHEREAS,the City's share of property tax to be transferred is insufficient to fund the costs of services to
be provided by the SBCFPD; and
WHEREAS, as a term and condition of annexation the City shall permanently transfer a percentage of its
VLF Swap revenue, in an amount defined in this Agreement, to the SBCFPD to address the insufficiency
of property tax revenues to fund services; and
WHEREAS,the City is a member of the Inland Valley Development Agency, a joint powers authority
organized and existing under the laws of the State of California and a federal base reuse authority
(IVDA), pursuant to the Amended Joint Exercise of Powers Agreement dated as of February 12, 1990
(JPA Agreement); and
WHEREAS, pursuant to the redevelopment plan and the JPA Agreement there is a sharing of property
tax revenue between the City and IVDA for parcels within the IVDA boundaries; and
WHEREAS, IVDA also has a separate public agency as the Successor Agency to the IVDA Redevelopment
Agency; and
WHEREAS, on or about May 15, 2014, IVDA issued its Successor Agency to the Inland Valley
Development Agency Tax Allocation Refunding Bonds,Series 2014A and Successor Agency to the Inland
Valley Development Agency Tax Allocation Refunding Bonds,Series 2014B (together, the IVDA Bonds)
pursuant to an Indenture of Trust, dated as of May 1, 2014(Bond Indenture) by and between IVDA as
joint powers authority in its own capacity and as Successor Agency(together,the Issuer) and U.S. Bank
National Association, or any other association or corporation which may at any time be substituted in its
place as trustee; and
WHEREAS, Issuer has pledged the tax revenues it receives pursuant to the redevelopment plan and the
JPA Agreement (Tax Revenues as defined in the Bond Indenture)to the repayment of the IVDA Bonds
and related obligations under the Bond Indenture; and
WHEREAS,the pledge of Tax Revenues to holders of the IVDA Bonds and related obligations under the
Bond Indenture could be impaired by a transfer of property tax within the IVDA boundaries; and
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WHEREAS,to avoid such impairment of IVDA's obligation to holders of the IVDA Bonds and other related
obligations under the Bond Indenture, the County's Property Tax Transfer Resolution will delay the
transfer of property tax within the IVDA boundaries from the City to the SBCFPD; and
WHEREAS, an agreement between the City and the SBCFPD is necessary to provide a backfill of the
losses to the SBCFPD as a result of the delay in transferring property tax within the IVDA boundaries
with an equivalent supplemental amount of VLF Swap revenue, in addition to the permanent
percentage of VLF Swap revenue transfer; and
WHEREAS,there is no intent to adversely impact the pledge of revenues or impair the pledge of the
revenue IVDA receives pursuant to the redevelopment plan and the IPA Agreement to the IVDA Bonds
and related obligations under the Bond Indenture and security of the bondholders of the IVDA Bonds;
and
WHEREAS, upon full payment of all IVDA Bonds and their related obligations under the Bond Indenture
or the issuance of bonds issued to refund the IVDA Bonds that recharacterizes the pledge so as to allow
for the transfer of property tax without concern of impairment,the City's remaining share of property
tax, in its entirety, will be transferred to the SBCFPD and the supplemental transfer of VLF Swap revenue
will terminate; and
WHEREAS,the City has obligations to IVDA pursuant to the JPA Agreement related to revenue sharing
that are independent of the bond impairment concerns; and
WHEREAS,the reorganization of services between the City and SBCFPD is not intended to financially
affect IVDA, resulting in the need for an agreement that the SBCFPD will fulfill the property tax revenue
sharing requirements to IVDA relating to those parcels within the IVDA boundaries.
NOW,THEREFORE, the City and the SBCFPD hereby agree as follows:
Section 1. Incorporation of Recitals. The recitals set forth above are true and correct and are
incorporated herein.
Section 2. Definitions
(a) Agreement: This agreement
(b) Initial Allocation Period:The Initial Allocation Period will commence on the effective date of the
reorganization of services between the City and the SBDFPD. The Initial Allocation Period will
stay in effect for the entire period during which the IVDA Bonds or related obligations under the
Bond Indenture are outstanding that may be impaired by the transfer of property tax revenue
from the City to the SBCFPD within the IVDA boundaries. The Initial Allocation Period shall end
at the earlier of:
a. Notification by the IVDA of the issuance of bonds to refund the IVDA Bonds that
recharacterizes the pledge so as to allow for the transfer of property tax without
concern of impairment; or.
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b. The final maturity of the IVDA Bonds and the satisfaction of any related obligations
under the Bond Indenture which may have survived the maturity of the IVDA Bonds.
(c) Permanent Allocation Period:The period immediately following the Initial Allocation Period.
There is no termination date of the Permanent Allocation Period.
(d) Property Tax Transfer Resolution: The County Board of Supervisors resolutions,or amended
resolutions,transferring property tax in two phases,the Initial Allocation Period and the
Permanent Allocation Period,from the City to the SBCFPD adopted as part of the reorganization
of services between the City and SBCFPD.
(e) VLF Swap Percentage: The percentage of VLF Swap revenue attributable to the City that
pursuant to this Agreement shall be assigned to SBCFPD in perpetuity. The amount of the VLF
Swap Percentage is 35%,to be allocated 94%to the Valley Service Zone and 6%to
Administration.
(f) VLF Swap Supplemental Amount: The VLF Swap Supplemental Amount shall be equal to the
amount of total property tax revenue not transferred to SBCFPD as a result of the delay in
transferring the City's share of property tax within the IVDA boundaries during the Initial
Allocation Period. The VLF Swap Supplemental Amount shall be allocated 94%to the Valley
Service Zone and 6%to Administration.
Section 3. Initial Allocation Period. During the Initial Allocation Period,the San Bernardino County
Auditor-Controller/Treasurer/Tax Collector(ATC)shall calculate the VLF Swap allocation in accordance
with governing law, currently Revenue and Taxation Code section 97.70, and shall distribute funds in the
amount calculated to the SBCFPD at such time as the funds would have been distributed to the City, as
follows:
(a) VLF Swap Percentage, as defined in the Agreement; plus
(b) VLF Swap Supplemental Amount, as defined in the Agreement; plus
(c) All of the City's property tax revenue except property tax within the boundaries of the IVDA, as
described within the Property Tax Transfer Resolution
Section 3.1. VLF Swap Supplemental Amount. The calculation of the VLF Swap Supplemental Amount
should include all distributions of property tax to the City that were not distributed to the SBCFPD as a
result of the delay in transferring the City's share of property tax within the IVDA boundaries during the
Initial Allocation Period. The calculation should include the following property tax revenues distributed
to the City during the Initial Allocation Period:
(a) base property tax; and
(b) pass through payments, negotiated or statutory; and
(c) residual distributions as a result of redevelopment dissolution; and
(d) any other property tax that would have come to the SBCFPD but for the delay in transferring the
City's share of property tax to SBCFPD within the IVDA boundaries
Section 3.2. Mismatch of Distribution Timing. Distribution of property tax and VLF Swap by the ATC may
occur at different times and/or frequencies. In the event that distribution dates of property tax and VLF
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Swap do not align,the ATC shall accumulate between VLF Swap Supplemental Payment transfers the
amount of property taxes distributed to the City as a result of the delay in property tax transfer during
the Initial Allocation Period. Such accumulated amount shall be distributed to the SBCFPD by the ATC at
the next VLF Swap distribution date. As a result of the likely mismatch in timing it is anticipated that a
final one-time VLF Swap Supplemental Payment representing accumulated amounts not yet distributed
at the end of the Initial Allocation Period will be required during the Permanent Allocation Period
Section 4. Permanent Allocation Period. During the Permanent Allocation Period VLF Swap funds will be
calculated in accordance with governing law, currently Revenue and Taxation Code section 97.70, by the
ATC and will be distributed to the SBCFPD at such time as they would have been distributed to the City,
as follows:
(a) VLF Swap Percentage, as defined in the Agreement; plus
(b) All of the City's property tax revenue including that within the boundaries of IVDA, as described
within the Property Tax Transfer Resolution
Section 5. Term. This agreement is permanent to provide a sustainable funding source for the services
reorganized under the related LAFCO action.
Section 6. Renegotiation of Terms. As a result of certain known future events, Section 2(e) of this
Agreement defining the percentage of the City's VLF Swap revenue to be diverted to SBCFPD may be
amended by mutual written agreement of the City and the SBCFPD. Those known future events are the
future termination of Community Facilities District#1033,the elimination of residential parcel taxes
within Community Facilities District#1033 as a result of the LAFCO condition of approval of annexation,
both of which will result in reduced revenue to the SBCFPD, and the ongoing process of redevelopment
agency dissolution, which will result in additional revenue to SBCFPD. The parties' purpose in providing
for the amendment of Section 2(e) is to ensure that revenues transferred from the City to SBCFPD and
services provided to the City by SBCFPD will be appropriately adjusted so as to be commensurate with
one another, and consistent with the Service Plan developed with the annexation. Specifically,the
parties intend to provide for a process that will permit over-and underpayments, limited to those
resulting from the events identified herein,to be recouped in a timely manner. Amendments to Section
2(e)can be made as one-time or ongoing adjustments and shall be memorialized as individual
attachments to this agreement that provide specific direction to the ATC regarding the new distribution
of VLF Swap funds. Amendments to Section 2(e) authorized under this Section shall be limited to those
necessary to adjust for the specific events identified in this Section.
Renegotiation of terms under this Section can be requested by either party, limited to the following
dates:
(a) The first, second, and third anniversary of approval by all parties of this agreement; and
(b) The 5th anniversary and every 3 years thereafter; and
(c) Notwithstanding (b),the final opportunity to renegotiate will occur at the later date of either
the final dissolution of the City's redevelopment successor agency or the dissolution of
Community Facilities District#1033
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Section 7. VLF Swap Amendment or Termination. The City and the SBCFPD recognize that the VLF Swap
is a funding mechanism created by the State that may in the future be modified or eliminated. In the
event that the VLF Swap is reduced or eliminated at a future date,the SBCFPD shall be entitled to a
share of any successor revenue to the VLF Swap that the State may put in place in a dollar amount
equivalent to the amount of VLF Swap revenue lost by the SBCFPD as a result of the State's action. Such
amount shall grow with the successor funding stream on a pro-rata basis,e.g. if the SBCFPD gets 40%of
the City's share of the successor revenue to make up for the lost VLF Swap,then the SBCFPD shall
participate in 40%of any growth associated with that revenue stream. If such successor revenue is
distributed by the ATC, then it shall be distributed pursuant to this section. If the City is the recipient of
the successor revenue directly from the State, it shall pay within 30 days of each receipt of funds the
appropriate amount, as defined in this section, to the SBCFPD.
Section 8. Covenants Regarding IVDA Bonds and Related Obligations under the Bond Indenture.
Notwithstanding any provision of this Agreement,the parties hereto covenant and agree that(i)there
shall be no impairment of the pledge of, or reduction of the allocation of, Tax Revenues under the Bond
Indenture,the redevelopment plan, or the JPA Agreement except for reductions as may normally occur
outside of the parties'control, such as declining economic conditions or statutory changes as set forth in
the Bond Indenture; (ii)the parties will not amend or modify the covenants in this Section 8; (iii) IVDA as
well as the Trustee and the Insurer under the Bond Indenture shall be third party beneficiaries of the
covenants in this Section 8; (iv) Neither IVDA nor the Trustee or the Insurer shall be third party
beneficiaries as to the VLF swap provisions of this Agreement. The County of San Bernardino (the
County)will give notice to IVDA of any proposed amendment to this Agreement at least 45 calendar
days prior to such proposed amendment.
The provisions of Section 8 shall terminate at the same time as termination is provided for by the Bond
Indenture and pursuant to applicable law.
Section 9. Notice. Any notice to be given pursuant to this Agreement shall be deemed fully given when
made in writing and either served personally, or by facsimile transmission,or deposited in the United
States mail, postage prepaid and addressed as follows:
If to the County:
Deputy Executive Officer/Fire
385 N.Arrowhead,4th Floor
San Bernardino, CA 92415-0120
If to the City:
Office of the City Manager
300 N. D Street
San Bernardino, CA 92418
Attn: City Manager
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If to the SBCFPD:
Fire Chief/Fire Warden
San Bernardino County Fire Protection District
157 West Fifth Street,Second Floor
San Bernardino, CA 92415-0451
If to the IVDA:
Executive Director
Inland Valley Development Agency
San Bernardino Airport Authority
1601 East Third Street, Suite 100
San Bernardino, CA 92408
Section 10. Amendments and Modifications. The parties agree that any alterations, amendments or
modifications of the provisions of this Agreement shall be valid only when reduced to writing,executed
and approved by the persons authorized to do so on behalf of each of the parties.
Section 11. Counterpart Signatures Allowed. This Agreement maybe executed in counterparts,each of
which shall be deemed an original, and all of which when executed and delivered shall together
constitute one and the same instrument.
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In Lieu Vehicle License Fee(VLF Swap) Revenue Sharing Agreement
Among the City of San Bernardino,the County of San Bernardino,and the San Bernardino County Fire
Protection District for the purposes of funding the annexation of fire and related services
Signatures of authorized parties
On behalf of the CITY OF SAN BERNARDINO
By: &4zye_, �
Marc Scott
Title: City Manager
Date:
Approved as to form:
Gary D. Saenz, City Attorney
By:
Tit L. —
On behalf of the COUN fFNBERNARDINO
SIGNED EPTIFIED,THATA PY'QF
By' THIS MENT`HAS SEEN" `
Title: �s TO JIRMA4 F THE�pq
8"M of&"W b LAU H., ELC t t� ,
C1etk the rtJ Hof Su
Date: ' ?01 6 Cou Berg
Approved as to form:
Jean-Rene Basle, County Counsel
By:
Title: Gk�t�F A�cIst-.4.r 400#77 4 CaaasF_ _
On behalf of the SAN B fRNO COUNTY FIRE PROTECTION DISTRICT
SIGNED AND
Title: Bogard of S rvism HA9#kE `A'CQ F
� THIS DOW N1rHAS�EEN QE'�;iyEfi�
Date: TO THE CH IRIGIic QptHE
MAP 3 5 2016 LAURA H. tD
Approved as to form: Secretary .
Jean-Rene,,Basle, Counitly,Counsel
By / �u ��V `� B
Title: T'-N 1 Ce 1411-.-) ( "A4L
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