Loading...
HomeMy WebLinkAboutRDA AG PKT 2011-09-26 #4REDEVELOPMENT AGENCY AGENDA STAFF REPORT '.gUFORN�p' t DATE: September 26, 2011 TO: Honorable Chair and Board Members THRU: Jill R. Ingram, Executive Director FROM: Mark H. Persico, AICP, Director of Development Services SUBJECT: APPROVE A DRAFT RECOGNIZED OBLIGATION PAYMENT SCHEDULE (ROPS) SUMMARY OF REQUEST: That the Agency adopt Resolution No. 11 -15 approving a draft recognizable obligation payment schedule (ROPS). BACKGROUND: AB X1 26 and AB X1 27 were signed by the Governor of California on June, 29, 2011. These two companion bills significantly impacted how Redevelopment Agencies operate. According to the provisions of the two bills, if a City "opted in" to the Alternative Voluntary Redevelopment Program (AVRP) outlined in AB X1 27, the provisions of AB X126 should not apply. However, the California Supreme Court partial stay of the legislation muddled the situation. For this reason even through the Redevelopment Agency of the City of Seal Beach opted into the State's AVRP we are still bound by certain provisions of AB X126. The City Council recently adopted an eligible obligation payment schedule (EOPS) that covers the period between June 29, 2011 and December 31, 2011. The draft recognized obligation payment schedule (ROPS) covers the period between January 1, 2012 and June 30, 2012. ANALYSIS: Health and Safety Code (HSC) Section 34169 requires preparation of a draft ROPS, but it does not set forth the required contents of an agency's draft ROPS. Therefore, it seems appropriate to turn to HSC Section 34177 for guidance. Section 34177 requires successor agencies to prepare a ROPS for each six month period and sets forth the information to be included. As discussed below, Agenda Item 4 the fact that Part 1.8 and Part 1.85 provide different definitions for enforceable obligations creates uncertainty as to which obligations an agency should include in its draft ROPS. However, it seems reasonable for an agency to include in the draft ROPS all of the outstanding obligations from its EOPS. HSC Section 34177 requires successor agencies to make payments due for enforceable obligations and provides that on and after October 1st, and until a ROPS becomes operative, only payments required pursuant to an EOPS shall be made. However, payments associated with obligations excluded from the definition of enforceable obligations by HSC Section 34171 (e) (2) must be removed from the last EOPS adopted by the agency pursuant to Section 34169 prior to the successor agency adopting the agency's EOPS as its own pursuant to Section 34177. HSC Section 34177 also provides that commencing on January 1st, only those payments listed in the ROPS may be made by the successor agency. For purposes of the EOPS prepared by an agency, HSC Section 34167 defines enforceable obligations to include all legally binding and enforceable agreements that are not void as violating the debt limit or public policy. HSC Section 34171 provides that for purposes of Part 1.85, enforceable obligations do not include agreements between a city and agency except for (1) written agreements entered into at the time off issuance of indebtedness obligations (but not later than December 31, 2010) solely for the purpose of securing or repaying those indebtedness obligations sold to third party investors or bondholders; and (2) loan agreements entered into between the agency and city within two years of the creation of the agency. Agreements between a city and agency which do fall within one of these two exceptions are deemed invalid. Thus, a successor agency is directed to remove from its EOPS any invalid city agreements, such as a loan from the city to the agency that occurred more than two years after the agency was activated, and to stop making payments on such invalid agreements after October 1st. Likewise, the successor agency's ROPS, which will govern payments by the successor agency commencing on January 1st, will also exclude the invalid city agreements which were removed from the successor agency's EOPS. In preparing a draft ROPS, it is unclear whether an agency must exclude those city agreements which will be deemed invalid as of October 1st under the more restrictive definition of enforceable obligations found in Part 1.85. But it is reasonable for an agency to include all of the obligations on its EOPS on its draft ROPS. In any event, an agency's draft ROPS is just that —a draft. In the event the Court upholds AB X1 26 and AB X1 27, the draft ROPS will be of no further force because the city will be exempt from Parts 1.8 and 1.85 on account of opting into the AVRP. In the event the Court upholds AB X1 26 but strikes down AB X1 27, the DOF can require the successor agency to remove any invalid city obligations from its ROPS. Page 2 The initial draft ROPS is for the period January 1, 2012 to June 30, 2012, inclusive. However, HSC Section 34177 also directs that from October 1, 2011 to July 1, 2012, the initial draft ROPS must also project the dates and amounts of scheduled payments for each enforceable obligation for the remainder of the time period during which the agency would be authorized to collect tax increment if it is not dissolved. This direction is somewhat ambiguous but appears to mean that the ROPS must include projections for obligations with payment dates in October, November, or December, 2011, even if these obligations do not require any payments between January 1st and June 30th. For each obligation included on the ROPS, the ROPS must identify one or more of the following sources of payment: (A) Low and Moderate Income Housing Fund, (B) Bond proceeds, (C) Reserve balances, (D) Administrative Cost Allowance (in the event of dissolution, the successor agency is entitled to receive the greater of 5% of the property tax allocated to the successor agency for the 2011 -12 fiscal year or $250,000), (E) the Redevelopment Property Tax Trust Fund (in the event of dissolution, this fund is to be established by the county auditor - controller for deposit of property tax revenues constituting former tax increment), but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation, and (F) other revenue sources such as rent and interest earnings. The California Department of Finance (the "DOF ") and the State Controller can require the Agency to provide them with documents that are associated with the Agency's enforceable obligations. Any taxing entity, the DOF and the State Controller all will have standing to file a judicial action to prevent a violation under Part 1.8 and to obtain injunctive or other appropriate relief. ENVIRONMENTAL IMPACT: There will be no new environmental impact associated with any of the decisions outlined above. LEGAL ANALYSIS: Agency Counsel has reviewed and concurred with this report. FINANCIAL IMPACT: None. Adoption of the draft ROPS will authorize the Agency to pay its recognized obligations after its adoption. Page 3 RECOMMENDATION: Staff recommends that the Agency adopt Resolution No. 11 -15 approving a draft recognized obligation payment schedule (ROPS), and authorize the Executive Director to file a copy with the State Controller's Office, the State Department of Finance and the County Auditor - Controller. SUBMITTED BY: Mark H. Persico, Al Director of Development Services NOTED AND APPROVED: 2 R. Ingram, Ex cu 've Director Attachments: A. Resolution No. 11 -15 Page 4 RESOLUTION NUMBER 11 -15 A RESOLUTION OF THE SEAL BEACH REDEVELOPMENT AGENCY ADOPTING A DRAFT RECOGNIZED OBLIGATION PAYMENT SCHEDULE PURSUANT TO PART 1.8 OF DIVISION 24 OF THE CALIFORNIA HEALTH AND SAFETY CODE AND TAKING CERTAIN ACTIONS IN CONNECTION THEREWITH RECITALS: A. The Seal Beach Redevelopment Agency ( "Agency ") is a redevelopment agency in the City of Seal Beach ( "City "), created pursuant to the Community Redevelopment Law (Part 1 (commencing with Section 33000) of Division 24 of the California Health and Safety Code) (the "Redevelopment Law "). B. The City Council of the City (the "City Council ") adopted Ordinance No. 708, approving and adopting the redevelopment plan for the Riverfront Project Area, and from time to time, the City Council has amended such redevelopment plan. The Agency is undertaking a program to redevelop the Project Area. C. AB X1 26 was signed by the Governor of California on June 29, 2011, making certain changes to the Redevelopment Law, including adding Part 1.8 (commencing with Section 34161) and Part 1.85 (commencing with Section 34170) to Division 24 of the California Health and Safety Code. Commencing upon the effectiveness of AB X1 26, AB X1 26 suspends most redevelopment agency activities and, among other things, prohibits redevelopment agencies from incurring indebtedness or entering into or modifying contracts. Effective October 1, 2011, AB X1 26 dissolves all existing redevelopment agencies and redevelopment agency components of community development agencies, designates successor agencies to the former redevelopment agencies, imposes numerous requirements on the successor agencies and subjects successor agency actions to the review of oversight boards established pursuant to the provisions of Part 1.85. D. Health and Safety Code Section 34169, which is set forth in Part 1.8, requires a redevelopment agency to adopt an Draft Recognized obligation payment schedule by September 30, 2011 effective date of Part 1.8. The Draft Recognized obligation payment schedule must list all of the obligations that are Draft Recognized within the meaning of Health and Safety Code Section 34167(d) and include specific information about each obligation. E. Health and Safety Code Section 34167(h), which is set forth in Part 1.8, provides that a redevelopment agency shall not make a payment unless it is listed in an adopted Draft Recognized obligation payment schedule, other than payments required to meet obligations with respect to bonded indebtedness, after the Draft Recognized obligation payment schedule is adopted pursuant to Health and Safety Code Section 34169. F. AB X1 27 was signed by the Governor of California on June 29, 2011, adding Part 1.9 (commencing with Section 34192) to Division 24 of the California Health and Safety Code. Part 1.9 establishes an Alternative Voluntary Redevelopment Program whereby, notwithstanding the provisions of Part 1.8 and Part 1.85, a redevelopment agency will be authorized to continue to exist and carry out the provisions of the Redevelopment Law upon the City Council's enactment of an ordinance to comply with Part 1.9. The City Council enacted the ordinance on August 8, 2011. Pursuant to Health and Safety Code Section 34192, if a city participates in the Alternative Voluntary Redevelopment Program and complies with all requirements and obligations contained in Part 1.9, the redevelopment agency in that city will be exempt from Part 1.8 and Part 1.85. Resolution Number 11 -15 G. The California Redevelopment Association and League of California Cities have filed a lawsuit in the Supreme Court of California alleging that AB X1 26 and AB X1 27 are unconstitutional. On August 11, 2011, the Supreme Court of California decided to hear the case and set a briefing schedule designed to allow the Supreme Court to decide the case before January 15, 2012. On August 11, 2011, the Supreme Court also issued a stay order, which was subsequently modified on August 17, 2011. Pursuant to the modified stay order, the Supreme Court granted a stay of all of AB X1 27 (i.e., Part 1.9), except for Health and Safety Code Section 34194(b)(2) (relating to the determination of cities' fiscal year 2011 -12 remittance amounts) and a partial stay of AB X1 26. With respect to AB X1 26, Part 1.85 was stayed in its entirety, but Part 1.8 (including Health and Safety Code Sections 34167 and 34169) was not stayed. Accordingly, the Agency desires to adopt a Draft Recognized obligation payment schedule. NOW, THEREFORE, THE SEAL BEACH REDEVELOPMENT AGENCY HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1. The above recitals are true and correct and are a substantive part of this Resolution. Section 2. This Resolution is adopted pursuant to Health and Safety Code Section 34169. Section 3. The Agency hereby adopts the Draft Recognized obligation payment schedule attached as Exhibit A to this Resolution and incorporated herein by reference (the "Draft Recognized Obligation Payment Schedule "). Section 4. The Agency Secretary is hereby authorized and directed to post the Draft Draft Recognized Obligation Payment Schedule on the City's Internet Web site. Section 5. The Draft Recognized Obligation Payment Schedule may be amended from time to time at any public meeting of the Agency. Amendments shall be posted to the Internet Web site described in Section 4, above, for at least three business days before a payment may be made pursuant to an amendment. Section 6. The Agency Secretary is hereby authorized and directed to transmit a copy of the Draft Recognized Obligation Payment Schedule by mail or electronic means to the County Auditor - Controller, the State Controller, and the California Department of Finance (the "Department of Finance "). A notification providing the Internet Web site location of the posted Draft Recognized Obligation Payment Schedule and notifications of any amendments will suffice. Section 7. The officers and staff of the Agency are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable to effectuate this Resolution, including providing documents associated with the Statement of Draft Recognized Obligations to the Department of Finance and the State Controller in the manner of their choosing, and any such actions previously taken by such officers are hereby ratified and confirmed. Section 8. The Agency hereby designates the Executive Director as the official to whom the Department of Finance may make requests for review in connection with the Draft Recognized Obligation Payment Schedule and who shall provide the Department of Finance with the telephone number and e-mail contact information for the purpose of communicating with the Department of Finance. Section 9. The adoption of the Draft Recognized Obligation Payment Schedule is not intended and shall not constitute a wavier by the Agency of any rights the Agency may have to challenge the legality of all or any portion of AB X1 26 or AB X1 27 through administrative or judicial proceedings. Resolution Number 11 -15 Section 10. At such time as the Agency becomes exempt from Parts 1.8 and 1.85, the Agency shall no longer be bound by the Draft Recognized Obligation Payment Schedule. Section 11. This Resolution has been reviewed with respect to applicability of the California Environmental Quality Act ( "CEQA"), the State CEQA Guidelines (California Code of Regulations, Title 14, Sections 15000 et seq., hereafter the "Guidelines "), and the Agency's environmental guidelines. The Agency has determined that this Resolution is not a "project" for purposes of CEQA, as that term is defined by Guidelines Section 15378, because this Resolution is an organizational or administrative activity that will not result in a direct or indirect physical change in the environment. (Guidelines Section 15378(b)(5)). PASSED, APPROVED and ADOPTED by the Seal Beach Redevelopment Agency at a regular meeting held on the 26th day of September , 2011 by the following vote: AYES: Agency Members NOES: Agency Members ABSENT: Agency Members ABSTAIN: Agency Members Chairman ATTEST: Secretary/City Clerk STATE OF CALIFORNIA } COUNTY OF ORANGE } SS CITY OF SEAL BEACH } I, Linda Devine, Secretary/City Clerk of the City of Seal Beach, do hereby certify that the foregoing resolution is the original copy of Resolution Number 11 -15 on file in the office of the City Clerk, passed, approved, and adopted by the Seal Beach City Council at a regular meeting held on the 26th day of September , 2011. Secretary/City Clerk EXHIBIT A DRAFT RECOGNIZED OBLIGATION PAYMENT SCHEDULE Resolution No. 11 -15 Attachment A Name of Redevelopme Redevelopment Agency of the City of Seal Beach Project Area(s) RiveAront Project Area Page 1 of 1 DRAFT RECOGNIZED OBLIGATION PAYMENT SCHEDULE Per AB 26 - Section 34167 and 34169 (') Payments by month Total Outstanding Project Name / Debt Debt or Total Due Dunng Obligation Payee Description Source of Payment Obligation Fiscal Year Aug** 2011 Sep 2011 Oct 2011 Nov 2011 Dec 2011 Jan 2012 F02012 Mar 2012 April 2012 May 2012 June 2012 Total 2000 Tax Allocation _ 11 Bond A Bank of New York Bond Issue Tax Increment 5,185,000 00 663 315.00 541 372.50 121 942.50 $ 663,31500 00 2000 Tax Allocation 2 Bond B Bank of New York Bond issue Tax Increment 390 000.00 63 200.00 51 087.50 70082.50 E 81 15000 COMrect for legal g12 . 3 services Richards Watson Gershon Le al counsel Tax Increment 125 000.00 10 4D0.00 10 400.00 10 400.00 10 400.00 10.40D.00 10 400.00 10 400.00 10 400.00 10.400.00 $ 104 000.00 Contract for consulting CDBG and mobllehome park 4 services Civic Stone construction Tax Increment 150 000.00 500.00 12 72 500.00 12 500.00 12,500 12 500.00 12 500.00 72500.00 72500.00 12 500.00 $ 725 000.00 Contract for consulting Bond and mobilehome park 5 services Rosenow Scievacek Group monitorino Tax Increment 3,50000 400.00 400.00 400.00 400.00 40000 400.00 400.00 400.00 300.00 E 3 500.00 Low Mod / Rental 61 Assistance Seal Beach Shores Rental Assistance reemenl Low/Mod Fund 180,0D0.00 180 000.00 S 780 000.00 Affordable Housing The Agency oeposils 2096 of Fund (LMQ LMI Fund tax Increment Low/Mod Fund 446 800.00 Statutory Pass - SB 211 requires agencies to 446 800.00 _81 Through Tax Enures ass -tax Increment to taxing Tax Increment 149 787 140 787.00 Legal challenge to AB California Redevelopment 28 & 27 Agency Association Dues/pro-rated least costs Tax Increment 800.00 400.00 400.00 Marine Park Grant Park design for Prop 84 grant $ 800.00 1 D Application Carder Johnson a licatlon Tax Increment 86 000.00 7,500 00 2,300.00 $ 9.800.00 Seal Beach Shores Improvements to Individual j_11 Trailer Park Ventllen Construction mobllehome LOW/Mod Fund 35 000.00 7 200 00 7,900.00 7,800.00 $ 22 900.00 Seal Beach Shores Improvements to Individual . M Trailer Park Gutter Masten: mobllehome Low /Mod Fund 435.00 435.00 Seal Beach Shores Improvements to individual $ 435.00 13 Trailer Park Pike Stair Com mobllehome Low/Mod Fund 13 500.00 13 500.00 Seal Beach Shores Improvements to individual E 13,50000 14 Trailer Park Oran a county Fence mobllehome Low/Mod Fund 1,000.00 1,0D0.00 Seal Beach Shores Improvements to Individual $ 7000.00 15 Trailer Park Eric Wilkerson & Co. mobllehome Low/Mod Fund 35 000.00 9,500.00 9,500. 9.500.00 6.500.00 E 35 000.00 Seal Beach Shores Improvements to Individual 18 Trailer Park National Tree & Landscape mobllehome Low/Mod Fund 1.050.00 1,050.00 Ahemative Voluntary S 1.050.00 L71 Transfer Agreement City of Seal Beach Redevelopment Program Tax Increment 937 868.00 468 934.00 468 934.00 $ 937 868.00 78 1 Totals - This Page S 5,575 $ 2,892,255.00 $ $ 579 $ 106 687.50 $ 44.350 00 S 32 800.00 $578,734.00 $2330000 $14524250 $ 33 362 50 $4921 34.00 E 22 900.00 S2 159 318.00 Grand total -All Pages $ 5 575 DDD.00 $ 2 892 255.00 $ - S 579 807.50 $1 D6 687.50 $ 44 350.00 S 32 800.00 5678,734.00 823 300.00 E 145 242.50 E 33 362.50 $ 492 134.110 22 $ 900.00 1 $2 159 318 00