The URL can be used to link to this page

Home My WebLink AboutCC AG PKT 2002-10-28 #N d ‘t; 0 AGENDA REPORT CI L DATE: October 28, 2002 ' 'ed) TO: Mayor and Members of the City Council k / THRU: John B. Bahorski, City Manager FROM: Lee Whittenberg, Director of Development Services SUBJECT: CONSIDERATION OF LOAN TO REDEVELOPMENT AGENCY - CONSULTANT SERVICES FOR DISSOLUTION OF REDEVELOPMENT AGENCY, PHASE II WORK PROGRAM SUMMARY OF REQUEST: City Council determination regarding authorization of loan in the amount of $95,000 to the Redevelopment Agency to proceed with consultant services for dissolution of Redevelopment Agency, Phase II Work Program. If the City Council de -rmines to authorize the loan, the City Council should adopt Resolution No. , A Resolution of the City Council of the City of Seal Beach Authorizing a Loan to the Redevelopment Agency of the City of Seal Beach in the Amount of $ 95,000.00. BACKGROUND: On April 22, 2002, the Redevelopment Agency directed staff to request proposals for the preparation of a report discussing the impacts arising from the potential dissolution of the Redevelopment Agency. On May 28, 2002 the Redevelopment Agency retained Keyser Marston Associates, Inc. (KMA) to prepare a report regarding the dissolution process. That report was considered by the Agency on September 23, and the Agency directed staff to proceed to determine additional costs to resolve the outstanding issues. Staff has obtained the following cost estimates based on the Agency direction of September 23, 2002: ❑ Appraisal of Agency owned and leased properties: Staff has received proposals from two firms to conduct appraisals of the Agency -owned and optioned properties Agenda Item ✓ / C: \Documents and Settings \LWhittenberg \My Documents \RDA\Loan Authorization for Dissolution of Agency, Phase II.CC Staff Report.doc \LW\10 -23 -02 Consideration of Loan to the Redevelopment Agency — Phase 11 Scope of Work, Dissolution of Redevelopment Agency City Council Staff Report October 28, 2002 within the City. Please refer to Attachments 1 and 2, respectively for the proposals of R. P. Laurain & Associates and Donahue & Company, Inc. Cost Proposal: Fixed fee, including expenses, ranging from $9,700.00 to $32,850.00. ❑ KMA Phase II Agency Dissolution Services: KMA and Murphy & Davis, LLP has submitted a proposal to provide a financial feasibility analysis that will present a methodology and timing for satisfying the existing indebtedness obligations of the Agency and subsequent termination of the Redevelopment Plan. Please refer to Attachment 3 for a copy of the proposal. Cost Proposal: Fixed fee, including expenses of $14,500.00. ❑ KMA Agency Dissolution Coordination Services: KMA has submitted a proposal to provide project coordination services to the Agency to include discussions with the County of Orange Chief Executive Office, the County outside bond counsel, and outside Agency bond counsel to determine the legal feasibility of permitting the County to assume and administer future debt service obligations for the Agency's existing tax allocation bonds. Please refer to Attachment 4 for a copy of the proposal. Cost Proposal: Fixed fee, including expenses of $9,000.00. Uncertain as to Agency bond counsel costs, estimated between $7,500.00 and $12,500.00. ❑ County of Orange Agency Council Opinion: As of October 23, KMA is awaiting word from the Orange County Executive Office regarding the City's cost to reimburse the County for its outside legal counsel expenses to reviewto possibility of the County assuming the Agency debt and receiving the tax increment revenues and using those funds for the necessary debt retirement and housing set -aside responsibilities of the Agency. Cost Proposal: Uncertain, estimated between $7,500 and $12,500.00. ❑ Additional Staff and City Attorney Expenses: If the Agency were to continue to pursue this matter, additional staff and City Attorney time will need to be allocated to this matter. At this time it is uncertain as to the amount of time that may be required to oversee the above discussed consultant work products and prepare additional information related to this effort. Cost Proposal: Uncertain, estimated between $7,500 and $12,500.00. Summary of Anticipated Costs to Complete Phase II Work Program: Provided below is a summary of the various costs identified above: 2 Loan Authorization for Dissolution of Agency, Phase II.CC Staff Report Consideration of Loan to the Redevelopment Agency — Phase II Scope of Work, Dissolution of Redevelopment Agency City Council Staff Report October 28, 2002 Phase II Agency Dissolution Study — Low High Cost Cost Estimate to be Provided mmate Estimate Appraisal of Agency owned and leased properties $ 9,700 $ 32,850 KMA Phase II Agency Dissolution Services $ 14,500 $ 14,500 KMA Agency Dissolution Coordination Services $ 9,000 $ 9,000 Agency Bond Counsel Services $ 7,500 $ 12,500 County of Orange Agency Council Opinion $ 7,500 $ 12,500 Additional Staff and City Attorney Expenses $ 7.500 $ 12.500 Total Estimated Costs $ 55,700 $ 93,850 Authorization of Loan in the Amount of $ 95,000 to the Redevelopment Agency: If the Agency determines to proceed with consideration of dissolution it will be necessary for the City to loan funds to the Agency for the professional services discussed above. The Agency has insufficient un- obligated funds to bear the expense of these services. Staff has prepared the appropriate resolution and it is provided as Attachment 1. The resolution has been prepared to reflect authorizing the maximum loan amount, proposed at $95,000, to cover the above - discussed expenses, assuming the Agency determines to proceed to the Phase II analysis as presented above. It is anticipated that these loans funds would not be able to be repaid to the City until June, 2017. FISCAL IMPACT: Loss of $95,000 of General Fund Unobligated Fund revenues. The Agency would assume an additional debt of $95,000 plus an interest accrual of 5% per annum. It is anticipated that the Agency will not have sufficient funds to repay the loan and accrued interest until June, 2017. RECOMMENDATION: City Council determination regarding authorization of loan in the amount of $95,000 to the Redevelopment Agency to proceed with consultant services for dissolution of Redevelopment Agency, Phase II Work Program. If the City Council determines to authorize the loan, the City Council should adopt Resolution No. , A Resolution of the City Council of the City of Seal Beach 3 Loan Authorization for Dissolution of Agency, Phase II.CC Staff Report Vb Consideration of Loan to the Redevelopment Agency — Phase II Scope of Work, Dissolution of Redevelopment Agency City Council Staff Report October 28, 2002 Authorizing a Loan to the Redevelopment Agency of the City of Seal Beach in the Amount of $ 95,000.00. NOTED AND APPROVED: r le Whittenberg Jo B. Bahorski D irector of Development Services p ity Manager Attachments: (1) . Attachment 1: Resolution No. , A Resolution of the City Council of the City of Seal Beach Authorizing a Loan to the Redevelopment Agency of the City of Seal Beach in the Amount of $ 95,000.00 4 Loan Authorization for Dissolution of Agency, Phase LI.CC Staff Report Consideration of Loan to the Redevelopment Agency — Phase II Scope of Work, Dissolution of Redevelopment Agency City Council StaffReport October 28, 2002 ATTACHMENT 1 RESOLUTION NO. , A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL BEACH AUTHORIZING A LOAN TO THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH IN THE AMOUNT OF $ 95,000.00 5 Loan Authorization for Dissolution of Agency, Phase II.CC Staff Report Consideration of Loan to the Redevelopment Agency — Phase 11 Scope of Work, Dissolution of Redevelopment Agency City Council Staff Report October 28, 2002 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEAL BEACH AUTHORIZING A LOAN TO THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH IN THE AMOUNT OF $ 95,000.00 THE CITY COUNCIL OF THE CITY OF SEAL BEACH DOES HEREBY RESOLVE: WHEREAS, The Redevelopment Agency is reviewing various proposals to allow for the dissolution of the Redevelopment Agency of the City of Seal Beach upon compliance with all applicable provisions of the California Health and Safety Code; and WHEREAS, the Redevelopment Agency does not have sufficient un- obligated funds available to support the necessary consultant, staff, and legal expenses necessary to determine if the dissolution of the Redevelopment Agency of the City of Seal Beach is legally feasible and to determine the necessary steps to accomplish such dissolution; and WHEREAS, the General Fund Unobligated Fund Balance has sufficient funds available to lend $ 95,000 to the Redevelopment Agency of the City of Seal Beach; and WHEREAS, the Redevelopment Agency of the City of Seal Beach will have the ability to repay a loan of $ 95,000 plus 5% simple interest by June 30, 2017. NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Seal Beach hereby agrees to lend the Redevelopment Agency of the City of Seal Beach the sum of Ninety -Five Thousand Dollars ($95,000.00) from the City of Seal Beach General Fund Unobligated Fund Balance, effective November 1, 2002. This debt to the City of Seal Beach is hereby recorded and the foregoing sum shall be repaid to the City of Seal Beach on or before June 30, 2017 together with simple interest of 5% per annum. PASSED, APPROVED AND ADOPTED by the City Council of the City of Seal Beach at a meeting thereof held on the day of , 2002. 6 Loan Authorization for Dissolution of Agency, Phase ❑.CC Staff Report Consideration of Loan to the Redevelopment Agency — Phase 11 Scope of Work, Dissolution of Redevelopment Agency City Council Staff Report October 28, 2002 AYES: Councilmembers NOES: Councilmembers ABSENT: Councilmembers ABSTAIN: Councilmembers MAYOR ATTEST: CITY CLERK STATE OF CALIFORNIA } COUNTY OF ORANGE } SS CITY OF SEAL BEACH } I, Joanne M. Yeo, City Clerk of Seal Beach, California, do hereby certify that the foregoing resolution is the original copy of Resolution Number on file in the office of the City Clerk, passed, approved, and adopted by the City Council of the City of Seal Beach, at a regular meeting thereof held on the day of , 2002. City Clerk 7 • Loan Authorization for Dissolution of Agency, Phase 11.CC Staff Report