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HomeMy WebLinkAbout2017-1601 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27. 28 RESOLUTION NO. 2017-160 RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO, ACTING AS THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH THE COUNTY OF SAN BERNARDINO FOR THE CANCELLATION OF PROPERTY TAXES ON 285 FORMER REDEVELOPMENT AGENCY PARCELS, AND CERTAIN RELATED ACTIONS WHEREAS, in March 2011 the Redevelopment Agency of the City of San Bernardino ("RDA") transferred 285 parcels of property ("Parcels") located in the City of San Bernardino ("City") to the San Bernardino Economic Development Corporation ("SBEDC"), a California nonprofit corporation formed to assist the RDA in redevelopment activities, for the purpose of facilitating the redevelopment of the Parcels; and WHEREAS, the California State Controller and California Department of Finance I("DOF") asserted that the transfer of the Parcels was unauthorized under legislation enacted by the California Legislature in 2011 and 2012 requiring the dissolution of redevelopment agencies and the disposition of redevelopment agency assets ("Dissolution Laws"); and WHEREAS, as required by the Dissolution Laws, the RDA was dissolved effective I February 1, 2012 and its assets and affairs were transferred to the City as the successor agency to the RDA ("Successor Agency"); and WHEREAS, the Mayor and City Council of the City act as the governing body of the Successor Agency; and WHEREAS, pursuant to the direction of the Controller and DOF, the Parcels were returned by SBEDC to the Successor Agency beginning in 2014; and WHEREAS, 98 of the Parcels are currently owned by the Successor Agency; and WHEREAS, the County of San Bernardino ("County") assessed property taxes ("Taxes") on the Parcels from the time of their transfer to SBEDC until their return to the Successor Agency; and WHEREAS, as of July 1, 2017 the Taxes, with accrued interest, totaled 1 $5,740,384.31; and 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17. 18''. 19' 201 21 22 23! 24 25 26 27 28 WHEREAS, in view of the divestiture of the Parcels from SBEDC pursuant to the directives of the Controller and DOF, and the return of the Parcels to the Successor Agency, the City and Successor Agency have asked that the Taxes be cancelled; and WHEREAS, the County has agreed to cancel the Taxes subject to terms and conditions set forth in a written agreement ("Agreement") between the City, County, and Successor Agency, negotiated by counsel for the parties and attached to this Resolution as Exhibit "A"; and WHEREAS, it is necessary that the execution of the Agreement on behalf of the Successor Agency be authorized by the Mayor and City Council as governing body of the Successor Agency. NOW THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO, ACTING AS THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, AS FOLLOWS: SECTION 1. The City Manager or his or her designee is hereby authorized to execute the Agreement on behalf of the Successor Agency, subject to such clerical or other non -material revisions as he or she, in consultation with the City Attorney, may deem necessary and appropriate to effectuate the intent and purposes of the Agreement, and to take such further actions as may be necessary to accomplish the effectiveness and implementation of the Agreement. SECTION 2. This Resolution shall take effect immediately upon its adoption by the Mayor and City Council. 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28'. RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN BERNARDINO, ACTING AS THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO, AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH THE COUNTY OF SAN BERNARDINO FOR THE CANCELLATION OF PROPERTY TAXES ON 285 FORMER REDEVELOPMENT AGENCY PARCELS, AND CERTAIN RELATED ACTIONS I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and City Council of the City of San Bernardino at a Joint Regular Meeting thereof, held on the 16th day of Au ust 2017, by the following vote, to wit: Council Members: AYES NAYS MARQUEZ X .. IR jIfem VALDIVIA X SHORETT X(M) NICKEL X RICHARD X MULVIHILL X(S) ABSTAIN ABSENT 29 George lHanna, C C,I City Clerk The foregoing Resolution is hereby approved this 16a' day of August 2017 Approved as to form: Gary D. Saenz, City Attorney By., 3 w -- R. Carey Da/1', Mayor City of S emardino CCO ERNARDINO UNTY FAS CONTRACT TRANSMITTAL FOR COUNTY USE ONLY 04 New Change Cancel FAS Vendor Code N/A /+ SC Dept. ASR Contract Number rl —'931 ePro Vendor Number N/A ePro Contract Number N/A County Department Dept. Orgn. Assessor -Recorder -County Clerk ASR ASR Contractor's License No. N/A County Department Contract Representative Telephone Bob Dutton 909 382-3900 Total Contract Amount N/A Contract Type ® Revenue El Encumbered E3 Unencumbered ® Other: If not encumbered or revenue contract type, provide reason: Mutual Release and Settlement Agreement Commodity Code N/A Contract Start Date 10/31/17 Contract End Date N/A Original Amount N/A Amendment Amount N/A Fund Dept. Organization Appr. Obj/Rev Source GRC/PROJ/JOB No. Amount Fund Dept. Organization Appr. Obj/Rev Source GRC/PROJ/JOB No. Amount Fund Dept. Organization Appr. Obj/Rev Source GRC/PROJ/JOB No. Amount Project Name Estimated Payment Total by Fiscal Year FY Amount I/D FY Amount I/D CONTRACTOR City of San Bernardino and Successor Agency to the Redevelopment Agency of the City of San Bernardino Federal ID No. or Social Security No. On File Contractor's Representative Andrea M. Miller, City Mar Address 290 North D Street, San Bernardino, CA 92401 Phone (909)384-5122 Nature of Contract: (Briefly describe the general terms of the contract) A Mutual Release and Settle Agreement relating to the cancellation of real property taxes in connection with the former Redevelplfment Agency of the City of San Bernardino's transfers of 285 parcels disallowed by the State Controller. CO ��j0 coy (Attach this transmittal to all cis`not prepare�,;,Z J ontract" form.) Approved as to f_egal Form (sigpdn <) Review ld ` o &ontreot pr nce Presented to BOS for Signature Date I U _ Auditor-Controller/Treasurer/Tax Collector Use Only ❑ Contract Database ❑ FAS Input Date Keyed By Department Head Date o... ,:_-,+ nc inn ionic MUTUAL RELEASE AND SETTLEMENT AGREEMENT This Mutual Release and Settlement Agreement ("Settlement Agreement"), is entered into by and among the City of San Bernardino, a charter city and municipal corporation ("City"), the Successor Agency to the Redevelopment Agency of the City of San Bernardino ("Successor Agency"), the County of San Bernardino, a public body, corporate and politic ("County"), and the San Bernardino Assessor -Recorder -County Clerk ("Assessor"). City, Successor Agency, County and Assessor are sometimes hereafter referred to, individually, as a "Party," and collectively, as the "Parties". RECITALS A. WHEREAS, on June 28, 2011, the Governor of the State of California signed into law Assembly Bill 26 (AB 1X 26, Chapter 5, Statutes of 2011, First Extraordinary Session), providing for the elimination of redevelopment agencies (RDAs), commencing with the fiscal year 2011-12 State budget. B. WHEREAS, AB 1X 26 prohibited RDAs from engaging in new business, established mechanisms and timelines for dissolution of the RDAs, and created RDA Successor Agencies to oversee the dissolution of the RDAs and redistribution of the RDA assets. C. WHEREAS, the provisions of AB 1 X 26 and AB 1484, enacted as cleanup legislation to AB 1X 26, prohibit the transfer of assets to a city, county, city and county, or any other public agency after January 1, 2011. D. WHEREAS, AB 1X 26 requires the State Controller to review the activities of RDAs to determine whether an unauthorized asset transfer has occurred between January 1, 2011 and the date at which the RDA ceases to operate, or January 31, 2012, whichever is earlier. E. WHEREAS, in accordance with the requirements of AB 1 X 26, the State Controller conducted an asset transfer review of transactions among the City of San Bernardino Economic Development Agency ("City RDA"), the City, and/or other public agencies and issued Mutual Release and Settlement Agreement Page 1 of 21 its findings in a report, dated March 2013 (the "Report"). F. WHEREAS, among other findings, the State Controller identified the transfer of parcels (the "SBEDC Parcels") from the City RDA to the San Bernardino Economic Development Corporation ("SBEDC') that occurred during the period of January 1, 2011 and January 31, 2012. G. WHEREAS, upon the transfer of the SBEDC Parcels from the City RDA to the SBEDC, the Assessor reclassified the SBEDC Parcels as taxable parcels. The SBEDC Parcels are more fully described in Exhibit "A" attached hereto and incorporated herein by this reference. H. WHEREAS, the State Controller determined that the SBEDC is an entity under the control of the City, that the "RDA made an unallowable transfer" to SBEDC and, therefore, ordered the SBEDC Parcels be turned over to the Successor Agency. I. WHEREAS, the City/Successor Agency contested the findings and determinations made by the State Controller in connection with the asset transfer review, arguing in part, that at the time of the transfer, that transaction was "allowable, legally authorized, enforceable, binding and valid". J. WHEREAS, between December 3, 2014 and December 17, 2014, the SBEDC complied with the State Controller order and transferred the SBEDC Parcels to the Successor Agency. K. WHEREAS, upon notice of the transfer of the SBEDC Parcels to the Successor Agency, the Assessor reclassified the SBEDC Parcels as tax exempt. L. WHEREAS, the Successor Agency and the City have requested that the County cancel the real property taxes levied by the County on the SBEDC Parcels that are applicable to the period of time that the SBEDC held title to such properties consistent with the order and determination of the State Controller as delineated in the Asset Transfer Review. Mutual Release and Settlement Agreement Page 2 of 21 M. WHEREAS, the Parties have been engaged in investigation, analysis and discussions to determine the legal, financial and operational consequences of complying with the Successor Agency's and the City's request. N. WHEREAS, the Parties hereto intend and desire hereby to settle any and all disputes between each other which arise out of (i) the initial transfer of the SBEDC Parcels (the "Initial Transfers"), (ii) all subsequent transfers of one or more of the SBEDC Parcels (the "Subsequent Transfers"), (iii) the classification and reclassification by the Assessor of one or more of the SBEDC Parcels (the "Classifications"), and (iv) any and all actions taken by the Assessor and the County in connection with or relating to one or more of the SBEDC Parcels from January 1, 2011 through and including the date of full execution of this Agreement (the "County Actions") and to accomplish hereby a full and final settlement between the Parties of all claims which arise out of the Initial Transfers, the Subsequent Transfers, the Classifications and the County Actions. Hereinafter all disputes between the Parties which arise out of the Initial Transfers, the Subsequent Transfers, the Classifications and the County Actions shall be referred to as the "Released Claims". O, WHEREAS, the Parties recognize and agree that the mutual releases and other terms of this Settlement Agreement apply exclusively to their respective claims and rights with respect to the properties described in Exhibit "A" hereto, and expressly reserve all of their respective claims and rights with respect to all properties not so described, including without limitation other City RDA properties that may have been transferred to or otherwise acquired by SBEDC or any other person or entity. NOW, THEREFORE, in consideration of the terms, covenants, promises, representations, and conditions contained herein, and for other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged by each of the Parties, the Parties and each of them, hereby represent and agree as follows: Mutual Release and Settlement Agreement Page 3 of 21 this reference. The Recitals set forth above are true and correct and incorporated herein by 2. It is agreed and understood that nothing contained herein shall be deemed as an admission of any liability on the part of any of the Parties with respect to the matters described in this Settlement Agreement. 3. Within thirty (30) business days of the date on which this Settlement Agreement is fully executed, which is the last date on which the Agreement is signed by all Parties, Assessor shall cancel the real property assessments enrolled by the County on the parcels set forth on Exhibit "A," attached hereto and made a part hereof by this reference, that are applicable to the period of time during which the SBEDC held title to such properties consistent with the order and determination of the State Controller as delineated in the Asset Transfer Review. 4. Notwithstanding the foregoing, the Assessor shall enroll a possessory interest ("PI") assessment for each of the relevant years for any parcel set forth on Exhibit "A" as the Assessor determines is or should have been subject to such PI assessment but for the acts of the Parties described herein. Within thirty (30) calendar days of the date on which this Settlement Agreement is fully executed, City and Successor Agency and each of them shall deliver to the Assessor any and all records, documents or other evidence of a possessory interest in any one or more of the parcels set forth in Exhibit "A" hereto and any supplemental information as may be requested by the Assessor. The PI assessments will be assessed to the party who holds or held the interest in the applicable parcel. Notwithstanding the foregoing, City shall pay or cause to be paid to the Tax Collector any PI assessments due and owing within fifteen (15) business days of written notification of the taxes due for such PI assessments for one or more of the parcels set forth in Exhibit "A" hereto. Mutual Release and Settlement Agreement Page 4 of 21 5. CITY RELEASES 5.1. City, on behalf of itself, as well as on behalf of each of its elected and appointed officials, officers, directors, agents, employees, servants, successors, executors, administrators, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, hereby forever releases, acquits, and discharges the County and the Assessor (collectively, the "County Parties"), as well as each of their past and present elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, from any and all claims, demands, actions, defenses, liabilities, obligations, and indebtedness, with respect to any and all breaches of contract, breaches of duty or any relationship, acts, omissions, misfeasances, malfeasances, causes or causes of action, debts, sums of money, accounts, compensation, contracts, controversies, promises, damages, costs, losses and expenses, of every type, kind, nature, description or character, whatsoever, whether in law or in equity, whether contractual, common law, statutory, federal, state, or otherwise, whether known or unknown, whether suspected to exist or not, whether liquidated or unliquidated, each as though fully set forth herein at length, which City has ever had, or hereafter may have or claim to have, by reason of, arising out of, or connected with or related to any acts, omissions, transactions, or occurrences, arising out of the Released Claims. 5.2. City acknowledges, represents, and warrants that there may be claims arising out of the Released Claims by reason of acts, omissions, transactions or occurrences, against the County Parties, as well as against the past and present employees, servants, successors, attorneys, and assigns, if any, of the County Parties of which, at the time this Settlement Agreement is executed, it has no knowledge or suspicion. City hereby agrees and represents that this Settlement Agreement is specifically intended to, and does, extend to any and all such claims, Mutual Release and Settlement Agreement Page 5 of 21 whether or not known, claimed, or suspected by it. Therefore, City, on behalf of itself, as well as on behalf of each of its officers, directors, agents, employees, servants, successors, executors, administrators, attorneys, heirs, trustees, trustors, parent corporations, subsidiaries, beneficiaries and assigns, if any, hereby expressly waives the benefits of Section 1542 of the California Civil Code which provides: Parties as follows: "Section 1542. GENERAL RELEASE; EXTENT. A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." 5.3. City hereby acknowledges, represents, and warrants, to the County 5.3.1. The person signing this Settlement Agreement as or on behalf of City understands the meaning and effect of Section 1542 of the California Civil Code set forth above. 5.3.2. WITH REGARD TO SECTION 1542 OF THE CALIFORNIA CIVIL CODE, CITY AGREES TO ASSUME THE RISK OF ANY AND ALL UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS WHICH ARE RELEASED BY THE RELEASES CONTAINED IN THIS SECTION 5 (THE "CITY RELEASES") IN FAVOR OF THE COUNTY PARTIES AND CITY HEREBY WAIVES AND RELEASES ALL RIGHTS AND BENEFITS WHICH IT MIGHT OTHERWISE HAVE UNDER Mutual Release and Settlement Agreement Page 6 of 21 THE AFOREMENTIONED SECTION 1542 OF THE CALIFORNIA CIVIL CODE WITH REGARD TO THE RELEASE OF SUCH UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS. 5.3.3. EACH PERSON SIGNING THIS SETTLEMENT AGREEMENT AS OR ON BEHALF OF CITY HAS READ THE FOREGOING RELEASES. SAID PERSON FULLY UNDERSTANDS THAT THE CITY RELEASES HAVE IMPORTANT LEGAL CONSEQUENCES. SAID PERSON REALIZES HE OR SHE IS RELEASING ANY AND ALL CLAIMS THAT THE CITY HAS AS SET FORTH ABOVE. CITY HAS HAD A LAWYER'S ADVICE CONCERNING THE LEGAL CONSEQUENCES OF THE CITY RELEASES. THE PERSON SIGNING AS OR ON BEHALF OF CITY WARRANTS AND REPRESENTS THAT HE OR SHE IS AUTHORIZED TO MAKE THE FOREGOING RELEASES IN THE REPRESENTATIVE CAPACITY INDICATED, IF ANY. 5.3.4. The City Releases set forth in this Section 5 shall not be construed to be and do not constitute an admission of any liability on the part of City. Said City Releases shall constitute an absolute bar to any claim of any kind, whether any such claim is based on contract, tort, warranty, mistake or any other theory, whether legal, statutory or equitable. City specifically agrees that any attempt to assert a claim barred by said City Releases shall subject the party asserting said claim to the provisions of applicable law setting forth the remedies for the bringing of groundless, frivolous, or baseless claims or causes of action. 5.4. The City Releases set forth in this Section 5 shall inure to the benefit of the past and present elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, of the County Parties. N Mutual Release and Settlement Agreement Page 7 of 21 6. SUCCESSOR AGENCY RELEASES 6.1. Successor Agency, on behalf of itself, as well as on behalf of each of its elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, hereby forever releases, acquits, and discharges the County Parties, as well as each of their past and present elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, from any and all claims, demands, actions, defenses, liabilities, obligations, and indebtedness, with respect to any and all breaches of contract, breaches of duty or any relationship, acts, omissions, misfeasances, malfeasances, causes or causes of action, debts, sums of money, accounts, compensation, contracts, controversies, promises, damages, costs, losses and expenses, of every type, kind, nature, description or character, whatsoever, whether in law or in equity, whether contractual, common law, statutory, federal, state, or otherwise, whether known or unknown, whether suspected to exist or not, whether liquidated or unliquidated, each as though fully set forth herein at length, which Successor Agency has ever had, or hereafter may have or claim to have, by reason of, arising out of, or connected with or related to any acts, omissions, transactions, or occurrences, arising out of the Released Claims. 6.2. Successor Agency acknowledges, represents, and warrants that there may be claims arising out of the Released Claims by reason of acts, omissions, transactions or occurrences, against the County Parties, as well as against the past and present employees, servants, successors, attorneys, and assigns, if any, of the County Parties of which, at the time this Settlement Agreement is executed, it has no knowledge or suspicion. Successor Agency hereby agrees and represents that this Settlement Agreement is specifically intended to, and does, extend to any and all such claims, whether or not known, claimed, or suspected by it. Therefore, Mutual Release and Settlement Agreement Page 8 of 21 Successor Agency, on behalf of itself, as well as on behalf of each of its officers, directors, agents employees, servants, successors, executors, administrators, attorneys, heirs, trustees, trustors, parent corporations, subsidiaries, beneficiaries and assigns, if any, hereby expressly waives the benefits of Section 1542 of the California Civil Code which provides: "Section 1542. GENERAL RELEASE; EXTENT. A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." 6.3. Successor Agency hereby acknowledges, represents, and warrants, to the County Parties as follows: 6.3.1. The person signing this Settlement Agreement as or on behalf of Sucessor Agency understands the meaning and effect of Section 1542 of the California Civil Code set forth above. 6.3.2. WITH REGARD TO SECTION 1542 OF THE CALIFORNIA CIVIL CODE, SUCCESSOR AGENCY AGREES TO ASSUME THE RISK OF ANY AND ALL UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS WHICH ARE RELEASED BY THE RELEASES CONTAINED IN THIS SECTION 6 (THE "SUCCESSOR AGENCY RELEASES") IN FAVOR OF THE COUNTY PARTIES AND SUCCESSOR AGENCY HEREBY WAIVES AND RELEASES ALL RIGHTS Mutual Release and Settlement Agreement Page 9 of 21 AND BENEFITS WHICH IT MIGHT OTHERWISE HAVE UNDER THE AFOREMENTIONED SECTION 1542 OF THE CALIFORNIA CIVIL CODE WITH REGARD TO THE RELEASE OF SUCH UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS. 6.3.3. EACH PERSON SIGNING THIS SETTLEMENT AGREEMENT AS OR ON BEHALF OF SUCCESSOR AGENCY HAS READ THE FOREGOING SUCCESSOR AGENCY RELEASES. SAID PERSON FULLY UNDERSTANDS THAT THE RELEASES HAVE IMPORTANT LEGAL CONSEQUENCES. SAID PERSON REALIZES HE OR SHE IS RELEASING ANY AND ALL CLAIMS THAT THE SUCCESSOR AGENCY HAS AS SET FORTH ABOVE. SUCCESSOR AGENCY HAS HAD A LAWYER'S ADVICE CONCERNING THE LEGAL CONSEQUENCES OF THE SUCCESSOR AGENCY RELEASES. THE PERSON SIGNING AS OR ON BEHALF OF SUCCESSOR AGENCY WARRANTS AND REPRESENTS THAT HE OR SHE IS AUTHORIZED TO MAKE THE FOREGOING SUCCESSOR AGENCY RELEASES IN THE REPRESENTATIVE CAPACITY INDICATED, IF ANY. 6.3.4. The Successor Agency Releases set forth in this Section 6 shall not be construed to be and do not constitute an admission of any liability on the part of Successor Agency. Said Successor Agency Releases shall constitute an absolute bar to any claim of any kind, whether any such claim is based on contract, tort, warranty, mistake or any other theory, whether legal, statutory or equitable. Successor Agency specifically agrees that any attempt to assert a claim barred by said Successor Agency Releases shall subject the party asserting said claim to the provisions of applicable law setting forth the remedies for the bringing of groundless, frivolous, or baseless claims or causes of action. Mutual Release and Settlement Agreement Page 10 of 21 6.4. The Successor Agency Releases set forth in this Section 6 shall inure to the benefit of the past and present elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, of the County Parties. 7. COUNTY PARTIES RELEASES 7.1. The County Parties, on behalf of themselves, as well as on behalf of each of their respective elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, hereby forever releases, acquit, and discharge City and Successor Agency (collectively, the "City Parties"), as well as each of the past and present elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, if any, of each of the City Parties from any and all claims, demands, actions, defenses, liabilities, obligations, and indebtedness, with respect to any and all breaches of contract, breaches of duty or any relationship, acts, omissions, misfeasances, malfeasances, causes or causes of action, debts, sums of money, accounts, compensation, contracts, controversies, promises, damages, costs, losses and expenses, of every type, kind, nature, description or character, whatsoever, whether in law or in equity, whether contractual, common law, statutory, federal, state, or otherwise, whether known or unknown, whether suspected to exist or not, whether liquidated or unliquidated, each as though fully set forth herein at length, which the County Parties have ever had, or hereafter may have or claim arising out of the Released Claims. 7.2. The County Parties acknowledge, represent, and warrant that they may have claims arising out of the Released Claims by reason of acts, omissions, transactions or Mutual Release and Settlement Agreement Page 11 of 21 occurrences, against the City Parties, as well as against the past and present directors, officers, employees, servants, successors, attorneys, trustees, trustors, beneficiaries, insurers and assigns, parent corporations or subsidiaries, if any, of each of the City Parties, respectively, of which, at the time this Settlement Agreement is executed, the County Parties have no knowledge or suspicion. The County Parties hereby agree and represent that this Settlement Agreement is specifically intended to, and does, extend to any and all such claims, whether or not known, claimed, or suspected by any of them. Therefore, the County Parties on behalf of themselves, as well as on behalf of their respective directors, officers, agents, employees, servants, trustees, trustors, successors, attorneys, and assigns, if any, hereby expressly waive the benefits of Section 1542 of the California Civil Code which provides: "Section 1542. GENERAL RELEASE; EXTENT. A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." 7.3. The County Parties hereby acknowledge, represent, and warrant, to the City Parties, as follows: 7.3.1. The persons signing this Settlement Agreement as or on behalf of the County Parties understand the meaning and effect of Section 1542 of the California Civil Code set forth above. 7.3.2. WITH REGARD TO SECTION 1542 OF THE CALIFORNIA CIVIL CODE THE COUNTY PARTIES AGREE TO ASSUME THE RISK OF Mutual Release and Settlement Agreement Page 12 of 21 ANY AND ALL UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS WHICH ARE RELEASED BY THE RELEASES CONTAINED IN THIS SECTION 7 (THE "COUNTY PARTIES RELEASES") IN FAVOR OF THE CITY PARTIES, AND THE COUNTY PARTIES HEREBY WAIVE AND RELEASE ALL RIGHTS AND BENEFITS WHICH THEY AND EACH OF THEM MIGHT OTHERWISE HAVE UNDER THE AFOREMENTIONED SECTION 1542 OF THE CALIFORNIA CIVIL CODE WITH REGARD TO THE RELEASE OF SUCH UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS. 7.3.3. EACH PERSON SIGNING THIS SETTLEMENT AGREEMENT AS OR ON BEHALF OF THE COUNTY PARTIES HAS READ THE FOREGOING COUNTY PARTIES RELEASES. SAID PERSONS FULLY UNDERSTAND THAT THE COUNTY PARTIES RELEASES HAVE IMPORTANT LEGAL CONSEQUENCES. SAID PERSONS REALIZE THEY ARE RELEASING ANY AND ALL CLAIMS THAT THE COUNTY PARTIES HAVE AS SET FORTH ABOVE. THE COUNTY PARTIES HAVE HAD A LAWYER'S ADVICE CONCERNING THE LEGAL CONSEQUENCES OF THE COUNTY PARTIES RELEASES. EACH OF THE PERSONS SIGNING AS OR ON BEHALF OF THE COUNTY PARTIES WARRANTS AND REPRESENTS THAT HE OR SHE IS AUTHORIZED TO MAKE THE FOREGOING COUNTY PARTIES' RELEASES IN THE REPRESENTATIVE CAPACITY INDICATED, IF ANY. 7.3.4. The County Parties Releases set forth in this Section 7 shall constitute an absolute bar to any claim of any kind, whether any such claim is based on contract, tort, warranty, mistake or any other theory, whether legal, statutory or equitable. The County Mutual Release and Settlement Agreement Page 13 of 21 Parties specifically agree that any attempt to assert a claim barred by said County Parties Releases shall subject the County Parties to the provisions of applicable law setting forth the remedies for the bringing of groundless, frivolous, or baseless claims or causes of action. 7.4. The County Parties Releases set forth in this Section 7 shall inure to the benefit of the elected and appointed officials, directors, officers, agents, employees, servants, successors, executors, attorneys, heirs, trustees, trustors, departments, divisions, agencies, affiliated entities, subsidiaries, beneficiaries and assigns, of the City Parties. 8. INDEMNIFICATION Successor Agency and City and each of them agree to indemnify, defend (with counsel reasonably approved by the County Parties) and hold harmless the County Parties and each of their respective authorized officers, employees, agents and volunteers from any and all claims, actions, losses, damages, and/or liability arising out of the performance of this contract from any cause whatsoever, including the acts, errors or omissions of any person and for any costs or expenses incurred by the County Parties on account of any claim except where such indemnification is prohibited by law. This indemnification provision shall apply regardless of the existence or degree of fault of indemnitees. Each of the City's and the Successor Agency's indemnification obligations apply to the County Parties' "active" as well as "passive" negligence but do not apply to the County Parties' "sole negligence" or "willful misconduct" within the meaning of Civil Code Section 2782. 9. GENERAL TERMS 9.1. Pursuant to Evidence Code Section 1123, this Settlement Agreement is enforceable, binding, admissible in a court of law, and may be disclosed by any party hereto. 9.2. Each individual executing this document on behalf of a party hereto hereby warrants and represents that he or she has been duly authorized to do so. Mutual Release and Settlement Agreement Page 14 of 21 9.3. This Settlement Agreement, and all documents executed by the Parties, either concurrently herewith or subsequent hereto as provided for herein, shall represent the entire understanding and agreement among the Parties with respect to the subject matter of this Settlement Agreement, and the same may not be altered or amended except by a subsequent written agreement executed by all of the Parties, or their respective successors, executors or administrators. The Parties acknowledge and agree that no representations, express or implied, have been made or relied upon in executing and agreeing to be bound by this Settlement Agreement, except as specifically set forth herein. 9.4. This Settlement Agreement and all documents and instruments required hereunder shall be governed by and construed in accordance with the laws of the State of California. 9.5. The terms, covenants, promises, conditions and representations contained in this Settlement Agreement shall inure to and be binding upon the successors and assigns of all of the Parties and each of them. Except as otherwise expressly provided for herein, this Settlement Agreement is not intended to be for the benefit of any person other than the Parties. 9.6. If any provision of this Settlement Agreement shall be held prohibited by or invalidated under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating or rendering ineffective the remainder of such provision, or any other provision of this Settlement Agreement. 9.7. Time is of the essence with respect to the performance of each and every term, covenant, promise and condition contained herein. 9.8. If legal action shall be instituted to enforce any of the provisions of this Settlement Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees incurred thereby. Mutual Release and Settlement Agreement Page 15 of 21 9.9. Each of the Parties hereby acknowledges the receipt of advice of legal counsel regarding this Settlement Agreement prior to executing it. 9.10. This Settlement Agreement supersedes any and all prior and contemporaneous agreements between or among any of the Parties with respect to the subject matter of this Settlement Agreement. 9.11. The execution, delivery, or performance of this Settlement Agreement and any documents provided for hereunder are not in contravention of nor in conflict with any agreement by which the Parties, or any of them, are legally bound. 9.12. hi construing the terms of this Settlement Agreement, the singular shall include the plural, and the plural shall include the singular. 9.13. The Parties agree to execute all documents and take all actions to fulfill the purposes of this Settlement Agreement. 9.14. This document may be executed in counter -part and the signature pages combined to form one document which is binding on all of the parties hereto. Facsimiles of the signatures of the parties hereto are deemed to be binding and the parties will send the originals of their signatures on this Settlement Agreement to the Office of County Counsel with respect to the County Parties and to the Office of City Attorney with respect to the City Parties. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] Mutual Release and Settlement Agreement Page 16 of 21 IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their respective authorized officers. CITY OF SAN BERNARDINO A California Charter City and Municipal Corporation Dated: October gyp, 2017 By: 1"! 1L Andrea M. Miller, City Manager ATTEST: By: Georgeann " tgi" Hann , rty Clerk APPROVED AS TO FORM: Gary D. Saenz, City Attorney By. cLy— SU(�S ENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO Dated: October1 �D, 201— By: -Omlbt-dld��114 Andrea M. Miller, xecutive Director ATTEST: By: — eorgeann " gi" Hanna, Ci Jerk APPROVED AS TO FORM: Gary D. Saenz, City Attorney Mutual Release and Settlement Agreement Page 17 of 21 By: (n Mutual Release and Settlement Agreement Page 17 of 21 COUNTY OF SAN BERNARDINO Dated: Off 3 11017 By: 2&rw C_ «/ w RO ERT A. LOVINGOOD, Chairman Mutual Release and Settlement Agreement Page 18 of 21 By: \ Laura H. Welch, Clerk Approved as to Legal Form: JEAN-jtFNE-4kISLE, County Counsel 0 Chief Assistant County Counsel SAN BERNARDINO COUNTY ASSESSOR- AA1A1.AhWq0' BOB DUTTON, ATTEST: By: Welc",a h, Clerk of the BoMd Approved as to Legal Form: JEAN-RENE BASLE, County Counsel By. &)? Robert F. Messinger Principal Assistant County Counsel EXHIBIT "A" SBEDC PARCELS (Identified by Assessor Parcel Numbers) 0134014100000 0134251600000 0148011300000 0134062120000 1034251620000 0148021590000 0134071190000 0134301200000 0148022060000 0134071240000 0134311400000 0148173070000 0134071260000 0134311500000 0155101080000 0134071580000 0134321240000 0155381110000 0134093070000 0135061190000 0155381450000 0134093080000 0135191130000 0261111210000 0134093090000 0135191140000 0261111230000 0134101090000 0136111140000 0261111250000 0134101100000 0136111150000 0261111290000 0134121250000 0136111230000 0261111300000 0134121260000 0136111240000 0261111330000 0134121270000 0136122690000 0261111350000 0134131100000 0138114090000 0261111370000 0134131260000 0138114100000 0261111400000 0134131270000 0138114110000 0261121010000 0134131280000 0138114180000 0261121020000 0134131290000 0138115130000 0261121030000 0134131300000 0138122330000 0261121130000 0134131340000 0139231340000 0261121140000 0134131350000 0139291600000 0261171060000 0134131360000 0139291610000 0261451010000 0134131370000 0140273210000 0261451020000 0134141280000 0140281520000 0261451030000 0134141290000 0140281540000 0261451040000 0134141340000 0141252040000 0261451050000 0134141360000 0141252060000 0261451060000 0134151310000 0144123030000 0261451070000 0134221430000 0144123460000 0261451080000 0134231310000 0144131210000 0261451090000 0134241640000 0144131360000 0261451100000 0134251570000 0145242320000 0261451110000 0134251580000 0145242330000 0261451120000 0134251590000 0146241070000 0261451130000 Mutual Release and Settlement Agreement Page 19 of 21 0261451140000 0261461060000 0261461460000 0261451150000 0261461070000 0261461470000 0261451160000 0261461080000 0261461480000 0261451170000 0261461090000 0261461490000 0261451180000 0261461100000 0261461500000 0261451190000 0261461110000 0261461510000 0261451200000 0261461120000 0261461520000 0261451210000 0261461130000 0261461530000 0261451220000 0261461140000 0261461540000 0261451230000 0261461150000 0261461550000 0261451240000 0261461160000 0261461560000 0261451250000 0261461170000 0261461570000 0261451260000 0261461180000 0261461580000 0261451270000 0261461190000 0261461590000 0261451280000 0261461200000 0261461600000 0261451290000 0261461210000 0261461610000 0261451300000 0261461220000 0261461620000 0261451310000 0261461230000 0261461630000 0261451320000 0261461240000 0261461640000 0261451330000 0261461250000 0261461650000 0261451340000 0261461260000 0261461660000 0261451350000 0261461270000 0280062070000 0261451360000 0261461280000 0281021300000 0261451370000 0261461290000 0281031510000 0261451380000 0261461300000 0281031520000 0261451390000 0261461310000 0281041410000 0261451400000 0261461320000 1191021010000 0261451410000 0261461330000 1191021110000 0261451420000 0261461340000 1191021120000 0261451430000 0261461350000 1191021130000 0261451440000 0261461360000 1191021140000 0261451450000 0261461370000 1191021150000 0261451460000 0261461380000 1191021160000 0261451470000 0261461390000 1191021170000 0261451480000 0261461400000 1191021180000 0261461010000 0261461410000 1191021190000 0261461020000 0261461420000 1191021200000 0261461030000 0261461430000 1191021210000 0261461040000 0261461440000 1191021220000 0261461050000 0261461450000 1191021230000 Mutual Release and Settlement Agreement Page 20 of 21 1191021240000 1191021640000 1191021250000 1191021650000 1191021260000 1191021660000 1191021270000 1191021670000 1191021280000 1191021680000 1191021290000 1191021690000 1191021300000 1191041170000 1191021310000 1191041180000 1191021320000 1191041190000 1191021330000 1191041200000 1191021340000 1191041210000 1191021350000 1191041220000 1191021360000 1191041250000 1191021370000 1191041260000 1191021380000 1191041270000 1191021390000 1191041280000 1191021400000 1191041290000 1191021410000 1191041300000 1191021420000 1191041310000 1191021430000 1191041320000 1191021440000 1191021450000 1191021460000 1191021470000 1191021480000 1191021490000 1191021500000 1191021510000 1191021520000 1191021530000 1191021540000 1191021550000 1191021560000 1191021570000 1191021580000 1191021590000 1191021600000 1191021610000 1191021620000 1191021630000 Mutual Release and Settlement Agreement Page 21 of 21 REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS OF SAN BERNARDINO COUNTY, CALIFORNIA AND RECORD OF ACTION October 31, 2017 FROM: BOB DUTTON, Assessor -Recorder -County Clerk Assessor -Recorder -County Clerk SUBJECT: AGREEMENT FOR CANCELLATION OF REAL PROPERTY TAXES DUE TO DISALLOWED PARCEL TRANSFERS RECOMMENDATION(S) Approve Mutual Release and Settlement Agreement No. 17-831 by and between the City of San Bernardino, the Successor Agency to the Redevelopment Agency of the City of San Bernardino, the County of San Bernardino and the San Bernardino County Assessor -Recorder -County Clerk relating to the cancellation of real property taxes in connection with the former Redevelopment Agency of the City of San Bernardino's transfers of 285 parcels disallowed by the State Bob Dutton, Assessor -Recorder -County Clerk, 382-3900) Operate in a Fiscally -Responsible and Business -Like Manner. Pursue County Goals and Objectives by Working with Other Agencies. Approval of this item will result in impacts to Discretionary General Funding (Net County Cost) as a result of refunds issued due to the cancellation of property taxes, offset by assessments of possessory interest on certain tax-exempt parcels. The transfer of the 285 parcels has been deemed void by the Assessor and the County is not legally entitled to the assessed taxes. The City of San Bernardino paid delinquent taxes on certain parcels subject to the Settlement Agreement. Upon reclassification by the Assessor of such parcels as tax exempt, refunds of any taxes paid will be generated through the office of the Auditor-ControllerfTreasurer/Tax Collector. In March 2011, the Redevelopment Agency of the City of San Bernardino ("SBRDA"), in anticipation of the eminent passage of redevelopment dissolution legislation, transferred 285 parcels of property ("SBEDC Parcels") to a nonprofit corporation, the San Bernardino Economic Development Corporation ("SBEDC"). SBEDC was governed and staffed by City of San Bernardino ("City") and SBRDA officials and staff. SBRDA also entered into agreements with SBEDC assigning its tax increment revenues to SBEDC and SBEDC cc: ARC -Dutton w/ agree Contractor c/o ARC w/ agree CAO -Porter EDA File - w/ agree mb 11/06/17 ITEM 17 Rev 7-12-16 Page 1 of 3 Record of Ac rd of Supervisors \PPR LENDAR) r UIN Ogg S� ftlO INO o'�td;CrF'.SGp MOTION kltl -'o k IT AYE 5 AGREEMENT FOR CANCELLATION OF REAL PROPERTY TAXES DUE TO DISALLOWED PARCEL TRANSFERS OCTOBER 31, 2017 PAGE 2 OF 3 agreed to expend the funds on redevelopment activities. Upon SBRDA's conveying the SBEDC Parcels to SBEDC, the San Bernardino County Assessor informed the SBRDA that the conveyances would result in reappraisal and taxability of the SBEDC Parcels. SBRDA determined to proceed with the conveyances, including the Carousel Mall, the Theater Square, San Manuel Stadium, City Hall and the City's main Police Station. On June 28, 2011, the Governor of the State of California signed into law Assembly Bill 26 (ABx1 26, Chapter 5, Statutes of 2011, First Extraordinary Session), providing for the elimination of redevelopment agencies (RDAs), commencing with the fiscal year 2011-12 State budget. ABx1 26 prohibited RDAs from engaging in new business, established mechanisms and timelines for dissolution of the RDAs, and created RDA Successor Agencies to oversee the dissolution of the RDAs and redistribution of the RDA assets. The provisions of ABx1 26 and AB 1484, enacted as cleanup legislation to ABx1 26, prohibit the transfer of assets to a city, county, city and county, or any other public agency after January 1, 2011. ABx1 26 requires the State Controller to review the activities of RDAs to determine whether an unauthorized asset transfer occurred after January 1, 2011 and the date at which the RDA ceases to operate, or January 31, 2012, whichever is earlier. In accordance with the requirements of ABx1 26, the State Controller conducted an asset transfer review of transactions between the SBRDA, the City, and/or other public agencies and issued its findings in a report, dated March 2013 (the "Report"). Among other findings, the State Controller identified transfer of 229 parcels ("SBEDC Parcels") from the SBRDA to the SBEDC that occurred during the period of January 1, 2011 and January 31, 2012. The State Controller determined that the SBEDC is an entity under the control of the City, that the "RDA made an unallowable transfer" to SBEDC and, therefore, ordered the SBEDC Parcels be turned over to the Successor Agency to the SBRDA ("Successor Agency"). The City and the Successor Agency contested the findings and determinations made by the State Controller in connection with the asset transfer review. The City and the Successor Agency argued, in part, that at the time of the transfer, that transaction was "allowable, legally authorized, enforceable, binding and valid." The City and Successor Agency also stated that "the City does not have legal authority to order or cause SBDEC to take" the action ordered by the State Controller. Nevertheless, between December 3, 2014 and December 17, 2014, some 21 months after being ordered by the State Controller to do so, the SBEDC transferred the SBEDC Parcels to the Successor Agency. Upon notice of the transfer of the SBEDC Parcels to the Successor Agency, the Assessor reclassified the SBEDC Parcels as tax exempt. Subsequently, the Successor Agency, by letter dated January 7, 2015, has requested that the County "[c]ancel the real property taxes levied by [the County] on the 229 parcels that are applicable to the period of time that the SBEDC held title to such properties consistent with the order and determination of the SCO as delineated in the Asset Transfer Review." City, Successor Agency and County staff engaged in extensive negotiations over a 2 Y year period during which the San Bernardino County Assessor sought and received informal 10/31/17 #17 AGREEMENT FOR CANCELLATION OF REAL PROPERTY TAXES DUE TO DISALLOWED PARCEL TRANSFERS OCTOBER 31, 2017 PAGE 3 OF 3 guidance from the State Board of Equalization affirming that the disallowed transfers should be treated as void transactions as the legal basis for cancelling the real property taxes on the SBEDC Parcels. The Successor Agency subsequently requested an additional 56 parcels be included among those for which the real property taxes were requested to be cancelled, bringing the total number of parcels to 285. These additional parcels were determined to meet the same criteria as the 229 original parcels and are included with this agreement. There are additional parcels which will be the subject of further discussions between the City and the San Bernardino County Assessor's Office on a parcel by parcel basis which are not a part of this agreement. Section 4 of the Agreement provides that the County will assess a possessory interest against parcels on which it cancels property taxes but on which it determines a possessory interest tax would have applied had the parcels been treated as exempt from property tax during the time they were owned by SBEDC. Section 8 of the Agreement requires the City and the Successor Agency to indemnify and defend the County against any liability arising out of the performance of the Agreement. On August 16, 2017, the Agreement was approved by the City Council of the City of San Bernardino and by the City Council of the City of San Bernardino acting as the Successor Agency to the Redevelopment Agency of the City of San Bernardino. PROCUREMENT Not applicable. REVIEW BY OTHERS This item has been reviewed by County Counsel (Robert F. Messinger, Principal Assistant County Counsel, 387-5455) on September 22, 2017; Finance (Ginger Porter, Finance Analyst, 387-4883) on October 10, 2017; and County Finance and Administration (Katrina Turturro, Deputy Executive Officer, 387-5423) on October 16, 2017. 10/31/17 #17