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HomeMy WebLinkAboutRDA AG PKT 2005-02-28 #3 AGENDA REPORT DATE: February 28, 2005 TO: Chairperson and Members of the Redevelopment Agency THRU: John B. Bahorski, Executive Director FROM: Lee Whittenberg, Director of Development Services SUBJECT: UPDATE ON DISSOLUTION OF REDEVELOPMENT AGENCY SUMMARY OF REQUEST: Provide direction to Staff if necessary. Receive and File Staff Report. BACKGROUND: January 26, 2005 Agency Request: On January 26, 2005 the Agency requested an update report on the issue of dissolution of the Redevelopment Agency of the City of Seal Beach. The following information summarizes the major dissolution issues and past actions and considerations of the Agency regarding this issue. Summary of Identified Impacts from "Executive Summary, Analysis of Redevelopment Agency Dissolution, City of Seal Beach ", Keyser Marston Associates and Murphy & Davis LLP, September 18, 2002: The major fiscal impacts to the Agency of a proposed dissolution was summarized in the referenced "Executive Summary" prepared by Keyser Marston Associates and Murphy & Davis LLP. This information, as presented in the "Executive Summary ", is over two years old at this time and certain facts noted may not be relevant at the present time. The major fiscal impacts were identified in Section III of the Executive Summary and are directly quoted below: "111. Riverfront Project Area Obligations A. The Riverfront Project Area generates gross tax increment revenues of approximately $1.1 million per year. Twenty percent is deposited into the Riverfront Housing Fund and the remaining balance is used to pay debt service on tax allocation Agenda Item a Z: \My Documents \RDA \Dissolution of Agency, Phase II.RDA Staff Report 2.doc \LW\01 -25 -05 Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report February 28, 2005 bonds, administrative costs and other on -going redevelopment projects, programs and activities of the Project Area. B. The termination of the Riverfront Project Area would result in the Agency's forfeiture of $27 million in cumulative gross tax increment revenues projected through FY 2023 -24. 1) The affected taxing agency distribution of this $27 million gross revenue aggregation (based upon the 1% tax levy allocations) can be expressed as follows: School Districts $13,153,000 State (Educational Revenue Augmentation Fund) 5,045,000 County Taxing Entities 4,571,000 City 4,240,000 Total (Gross Tax Increment before debt repayment) $27,009,000 2) However, if the Agency were to be dissolved a portion of this cumulative revenue would likely be required to service outstanding indebtedness obligations of the Agency. The exact amount would be dependent upon the amount of other alternate funding sources available (i.e. unspent bond proceeds and /or land sale proceeds). These obligations are summarized below." • "Executive Summary — Analysis of Redevelopment Agency Dissolution ", Keyser Marston Associates, Inc. and Murphy & Davis LLP, dated September 18, 2002: Following is the complete text of the "Executive Summary" as prepared by Keyser Marston Associates and Murphy & Davis LLP in September 2002: "I. INTRODUCTION Keyser Marston Associates, Inc. (KMA) and Murphy and Davis LLP (M &D) have been retained by the City of Seal Beach to analyze the potential dissolution of the Seal Beach Redevelopment Agency. 1 FY 2023 -24 represents the last fiscal year in which the Agency is permitted to receive tax increment revenues to repay indebtedness of the Riverfront Project (the Riverfront Annexation Redevelopment Plan will terminate March 3, 2014 and tax increments may be allocated for an additional 10 years to repay debt until March 3, 2024). Dissolution of Agency, Phase II.RDA Staff Report 2 2 Slaters Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report February 28, 2005 Dissolution of the Agency would require the termination of the Redevelopment Plans for both the Riverfront and the Surfside Redevelopment Project Areas, i.e., by amending both Redevelopment Plans to shorten their duration. Pursuant to Health and Safety Code Section 33141, the City Council may, by ordinance, deactivate the Agency if the Agency has no outstanding bonded indebtedness, no other unpaid loans, indebtedness, or advances, and no legally binding contractual obligations with persons or entities other than the City, unless the City assumes the bonded indebtedness, unpaid loans, indebtedness, and advances, and legally binding contractual obligations. Under Section 33333.8, the Redevelopment Plans cannot be terminated if the Agency has not complied with its obligations pertaining to replacement housing (Section 33413(a)), inclusionary housing (Section 33413(b)), or excess surplus housing funds (Section 33334.12). ll. Surfside Project Area Obligations A. The Redevelopment Plan of the presently inactive Surfside Redevelopment Project may formally be terminated at the City's discretion. B. Tax increment revenues are not allocated to the Agency from the Surfside Project. C. The balance of funds in the Surfside Housing Fund could be transferred to the City or to the County Housing Authority for use as required by Section 33334.2. In either instance, the Redevelopment Law requires that these funds be spent on low and moderate income housing activities within the City. lll. Riverfront Project Area Obligations A. The Riverfront Project Area generates gross tax increment revenues of approximately $1.1 million per year. Twenty percent is deposited into the Riverfront Housing Fund and the remaining balance is used to pay debt service on tax allocation bonds, administrative costs and other on -going redevelopment projects, programs and activities of the Project Area. Dissolution of Agency, Phase II.RDA Staff Report 2 3 Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff 'Report Februa,y 28, 2005 B. The termination of the Riverfront Project Area would result in the Agency's forfeiture of $27 million in cumulative gross tax increment revenues projected through FY 2023 -24. 1) The affected taxing agency distribution of this $27 million gross revenue aggregation (based upon the 1% tax levy allocations) can be expressed as follows: School Districts $13,153,000 State (Educational Revenue Augmentation Fund) 5,045,000 • County Taxing Entities 4,571,000 City 4,240,000 • Total (Gross Tax Increment before debt repayment) $27,009,000 2) However, if the Agency were to be dissolved a portion of this cumulative revenue would likely be required to service • outstanding indebtedness obligations of the Agency. The exact amount would be dependent upon the amount of other alternate funding sources available (i.e. unspent bond proceeds and /or land sale proceeds): These obligations are summarized below. C. Tax Allocation Bonds 2000 Series A and B 1) Outstanding obligations total $8, 795,000 in principal and $5,165,499 in interest payments (as of June 30, 2002) 2) If the Agency were to dissolve, the Agency would have to assign to the City it's right to receive tax increments for the purpose of paying the bonds. 3) The bond debt may be repaid from a combination of accumulated tax increment revenues, unspent bond proceeds and land sale proceeds of Agency -owned real estate which would be deposited into a special debt retirement fund administered by a bond trustee. • 2 FY 2023 -24 represents the last fiscal year in which the Agency is permitted to receive tax increment revenues to repay indebtedness of the Riverfront Project (the Riverfront Annexation Redevelopment Plan will terminate March 3, 2014 and tax increments may be allocated for an additional 10 years to repay debt until March 3, 2024). Dissolution of Agency, Phase II.RDA Staff Report 2 4 Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report February 28, 2005 4) Tax increment revenues could continue to be allocated up to 10 years after the Project Area dissolution (per Health and Safety Code Section 33333.6). 5) During the period in which tax increment revenues are annually received to meet debt service, 20% of the tax increment receipts will continue to be required to be deposited in the Housing Fund. 6) Unspent bond proceeds amount to approximately $3.3 million, although these proceeds are slated to be used to fund the West End Pump Station Replacement project and other capital improvements in the Project Area. If these proceeds are used to repay bonds and if no other funding sources from the City are available, these capital improvement projects will not be funded. 7) Land sale proceeds could be generated from the sale of Zoeter Place, the Police /Maintenance Yard /Animal Center Facility and proceeds from the purchase and sale of Zoeter Daycare Facilities (assuming the value exceeds the purchase price balance and requiring Agency or City option exercise). 8) It will be necessary to retain legal bond counsel to opine on matters pertaining to early redemption and retirement of the bonds and arbitrage issues if the City pursues an Agency dissolution. • D. Mobile Home Park Revenue Bonds, Series 2000A 1) The Revenue Bonds are secured by revenues from the Seal Beach Trailer Park. 2) The Agency does not have any fiduciary responsibilities, as all of the Agency's rights in and to these revenues have been assigned to the Bond Trustee. E. Zoeter Place Promissory Note (Purchase of Zoeter "Parcel A") 1) Repayment of the Note relies upon lease payments made on the property. If the Agency were to dissolve, the City would 3 Third Amendment to the Master Lease entered into between the Agency and the Karl and Tina Rodi Family Trust. Dissolution of Agency, Phase II.RDA Staff Report 2 5 Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report Februaw 28, 2005 have to assume the Agency's liability in the event of a shortfall between lease income and debt service. 2) The outstanding principal totals $763, 350 and outstanding interest totals $245,191, for a combined total of $1,008,541. 3) The lessee may exercise its purchase option to acquire the property, commencing from July 1, 2004 to December 31, 2004. The purchase price shall be the greater of either fair market value or the then - unpaid principal balance of the Note, whichever is greater. The balance of the outstanding principal on the Note could then be repaid from the land sale proceeds. . 4) If the property is acquired by the lessee, the Agency or City would forfeit $5,864,000 in future lease payments (Le. the sum of payments between FY 2004 -05 through FY 2023 -24). F. Zoeter Daycare Facilities Lease /Purchase Payments (Zoeter "Parcels B and D') 1) If the Agency were to dissolve, the City General Fund would have to re- assume the lease /purchase obligation of the lease of the site from the Los Alamitos Unified School District. 2) The amount of base rent payable to the School District totals $988,000 and additional interest totals $473,693, for a combined total of $1,461,693. The annual payments required through FY 2011 -12 are approximately $146,000 per year. 3) Alternatively, the Agency could exercise a purchase option, pay the purchase price and the lease would terminate. The property could then be sold by the Agency. The purchase price would be $1,590,000 less all amounts paid as Base Rent through the closing date. As of June 30, 2001, the purchase price obligation would have been $1,052,000. G. City General Fund Loan 1) The Agency owes to the City General Fund to -date approximately $363,238 in principal and interest from a loan incurred July 1, 1993 for administrative services rendered by the City for the Agency. Dissolution of Agency, Phase II.RDA Staff Report 2 6 Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report February- 28, 2005 2) If the Agency dissolves or if the City forgives this debt, the impact to the City General Fund will be $363,238. H. Loan and Grant Agreement for Seal Beach Trailer Park 1) Agency annually provides a grant for rental assistance to the Seal Beach Trailer Park for a period of 20 years, to a maximum of $180,000 per year (a total commitment of $3.6 million). 2) If the City were to assume this obligation, the impact to the City General Fund would be a maximum $180,000 per year through the term of the obligation. 3) Repayment of a $1 million Housing Fund loan to LINC will be repaid over 30 years. As this loan is repaid, the payments received will be deposited into the Housing Fund and must be used for low and moderate income housing purposes within the City. 4) Repayment of a $1 million Housing Fund "bridge" loan to LINC will be repaid from a matching State loan or from residual receipts to be collected over a 30 year period. As this bridge loan is repaid, the payments received will be deposited into the Housing Fund and must be used for low and moderate income housing purposes within the City. 1. Regulatory Agreements for Seal Beach Trailer Park 1) The Agency has continuing non - monetary obligations under two (2) Regulatory Agreements applicable to the Seal Beach Trailer Park for a period of 30 years, one in connection with the Revenue Bonds and one in connection with the Loan and Grant Agreement. 2) These obligations can be assumed by the City. IV. Funding of Excess Surplus Penalties A. The Agency has been penalized $668,000 for having an excess surplus in its Housing Fund as of June 2001. B. As additional monies are deposited into the Housing Fund (receipt of tax increment, Housing Fund loan repayments), future excess surplus penalties may be imposed if the excess Dissolution of Agency, Phase II.RDA Staff Report 2 Staters Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report February 28, 2005 surplus is not expended on low and moderate income housing uses in the City. C. Housing set aside monies cannot be used to fund the excess surplus penalty. The penalty must be paid from non - housing revenues. D. The excess surplus penalty will be paid from net tax increment revenues on a pay -as- you -go basis (i.e., net of the 20% housing set - aside, bond debt service and Agency administration). E. This liability would extend to the City General Fund if the City were to assume the Agency's obligations under an Agency dissolution. F. Once the excess surplus and excess surplus penalty are adequately funded, any remaining balance in the Housing Fund could be transferred to the City or to the County Housing Authority for use within the City as required by Section 33334.2. V. County Executive Office Conversations A. The Executive Office of the County of Orange has been asked to consider whether the County would be willing and able to assume responsibility for payment of annual debt service on the Agency's Tax Allocation Bonds, 2000 Series A and B. B. No decision or response have been received as of this date. C. Housing set aside monies transferred to the County Housing Authority are required to be expended within the City per the requirements set forth in the Redevelopment Law." Overview of October 28, 2002 Agency Possible Actions and Determinations: The Redevelopment Agency last considered this matter on October 28, 2002. At that time the Agency considered and debated a request to consider actions based on Agency direction given on September 23, 2002. Staff was directed on September 23, 2002 to determine the additional costs to resolve the outstanding issues still under Agency consideration. Provided below is a summary of the various costs that were identified by staff at that time (identified as "Phase II Agency Dissolution Study): Dissolution of Agency, Phase II.RDA Staff Report 2 8 Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report February 28, 2005 Phase II Agency Dissolution Study — Low High Cost Cost Services to be Provided Estimate 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 Note: The above cost estimates were presented to the Agency in October 2002 and have not been updated since that time After discussion among the Agencymembers and receipt of public comments, the requested Agency actions to adopt resolutions to authorize a budget amendment and accepting a loan from the City failed on 2 -3 votes. A copy of the October 28, 2002 Agency Staff Report on this matter is provided as Attachment 1 for the information of the Agency. The Agency minutes of this matter are provided as Attachment 2 for the information of the Agency. Also provided as Attachments 3 and 4 for the information of Agencymembers is a copy of the City Council Staff Report and minutes regarding the proposed loan from the City to the Agency to fund the indicated costs for the Phase II scope of work outlined below on pages 10 and 11. Overview of Overall Agency Consideration of Dissolution Process: On April 22, 2002, the Agency directed staff to request proposals for the preparation of a report discussing the impacts arising from the potential dissolution of the Redevelopment Agency. A copy of the Agency minutes of this matter is provided as Attachment 10 for the information of the Agency. On May 28, 2002 the Agency retained Keyser Marston Associates, Inc. (KMA) to prepare a report regarding the dissolution process. The Agency Staff Report and meeting minutes are provided as Attachments 8 and 9, respectively. On June 12, 2002 a "Memorandum" was forwarded to Keyser Marston Associates from the Director of Development Services regarding "Provision of Documents — Dissolution Dissolution of Agency, Phase II.RDA Staff Report 2 9 Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report Februa,y 28, 2005 of Redevelopment Agency Study ". A copy of this Memorandum is provided as Attachment 7 for the information of Agencymembers to indicate the extent and nature of the documents reviewed by the consultant team in preparing the "Analysis of Redevelopment Agency Dissolution" study. On September 23, 2002 the Agency considered the KMA report, and the Agency directed staff to proceed to determine additional costs to resolve the outstanding issues. The Agency Staff Report and meeting minutes are provided as Attachments 5 and 6, respectively. Overview of October 28, 2002 Requested Agency Considerations and Actions: On October 28, 2002 the Agency considered the "Phase II Dissolution of Redevelopment Agency" matter. Staff obtained the following cost estimates based on the Agency direction of September 23, 2002: ❑ Appraisal of Agency owned and leased properties: Staff received proposals from two firms to conduct appraisals of the Agency -owned and optioned properties within the City. Please refer to Attachment 1 to review 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. ❑ KvIA 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 1 for a copy of this 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 1 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, 2002, KMA was awaiting word from the Orange County Executive Office regarding the City's cost to reimburse the County for its outside legal counsel expenses to review to 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 Dissolution of Agency, Phase II.RDA Staff Report 2 1 0 Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report February 28, 2005 responsibilities of the Agency. KMA or the Agency never received documentation from the Orange County Executive Office regarding this item of concern. Cost Proposal: Uncertain, estimated between $7,500 and $12,500.00. ❑ Additional Staff and City Attorney Expenses: In 2002, staff indicated that if the Agency were to continue to pursue this matter, additional staff and City Attorney time would need to be allocated to this matter. At that time it was 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 As Set Forth in October 28 2002 Agency Staff Report: Provided below is a summary of the various costs identified above as of the October 28, 2002 Agency Staff Report: Phase II Agency Dissolution Study — Low High Cost Cost Services to be Provided Estimate 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 Staff indicated that if the Agency determined to proceed with consideration of dissolution, the Agency would need to determine which appraisal firm would be appropriate to provide the requested appraisals for future Agency consideration, and would need to authorize the Executive Director to negotiate and execute the appropriate contracts in accordance with the proposals of the various consultant firms discussed at that time. Dissolution of Agency, Phase II.RDA Staff Report 2 1 1 Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report February 28, 2005 October 28, 2002 Requested Budget Amendment: Staff also indicated that if the Agency determined to proceed with consideration of dissolution it would have been necessary for the Agency to authorize a budget amendment for the unanticipated consultant expense. Funds would have been available, upon authorization by the City Council of the above - discussed loan to the Agency, in the Redevelopment Agency Fund Balance, Account Number 063 - 000 -30420 and would have been spent out of the Redevelopment Agency contract professional services account. Staff prepared the appropriate resolution for Agency consideration and it is provided in Attachment 1. The resolution was prepared to reflect the maximum proposal amount under consideration, assuming the Agency determined to proceed to the stage of formal public hearings and dissolution of the Redevelopment Agency. Acceptance and Recordation of Loan Agreement with the City: Staff also indicated that if the Agency determined to proceed with consideration of dissolution it would have been necessary for the City to loan funds to the Agency for the professional services discussed above. The Agency had, and still has, insufficient un- obligated funds to bear the expense of these services. At that time Staff prepared the appropriate resolution and it is also provided in Attachment 1. The resolution was prepared to reflect the maximum loan amount, proposed at $95,000, to cover the above - discussed expenses, assuming the Agency determined to proceed to the Phase II analysis as presented above. It was anticipated that these loans funds would not be able to be repaid to the City until June 2017. It was indicated that it would also be necessary for the City Council to agree to loan the necessary funds to the Agency. If the Agency had determined to proceed, the appropriate City Council resolution was prepared and was on the City Council agenda on October 28, 2002 for consideration. FISCAL IMPACT: As indicated in the October 28, 2002 Agency Staff Report, the proposed study would determine if adverse impacts to the City General Fund would be created if the Agency were to be dissolved. The Agency would have needed to assume an additional debt of an undetermined amount at this time ($95,000 plus an interest accrual of 5% per annum was identified in October 2002). If the Agency determines to instruct staff to re- institute the Dissolution Study as outlined above, the Agency would need to receive of an updated report from Keyser Marston Associate, Inc. and Murphy and Davis LLP (KMA/M &D) on the Agency Dissolution impacts, including those issues that were being considered under the Phase II scope of work by the Agency in October 2002. The first step in that process would entail authorizing a new scope of work with KMA/M &D, after consideration of a formal proposal, scope of work and budget on this matter from KMA/M &D. Dissolution of Agency, Phase II.RDA Staff Report 2 12 Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report Februa v 28, 2005 RECOMMENDATION: Provide direction to Staff if necessary. Receive and File Staff Report. NOT r APPRO D: 7 oi // Whittenber. o �� B. ahorski i rector of Development Service. ' ecutive Director Attachments: (10) Attachment 1: Redevelopment Agency Staff Report re: "Consideration of Consultant Services, Phase II — Dissolution of Redevelopment Agency ", October 28, 2002 Attachment 2: Redevelopment Agency Minutes — October 28, 2002 Attachment 3: City Council Staff Report re: "Consideration of Loan to Redevelopment Agency - Consultant Services for Dissolution of Redevelopment Agency, Phase II Work Program ", October 28, 2002 Attachment 4: City Council Minutes — Oc . . er 28, 2002 Attachment 5: Redevelopment Agency Staff Report re: "Consideration of Consultants Report — Dissolution of Redevelopment Agency ", September 23, 2002 Attachment 6: Redevelopment Agency Minutes — September 23, 2002 Attachment 7: Memorandum to Keyser Marston re: Provision of Documents — Dissolution of Agency Study, June 12, 2002 Attachment 8: Redevelopment Agency Staff Report re: "Consideration of Consultant Services — Dissolution of Redevelopment Agency ", May 28, 2002 Attachment 9: Redevelopment Agency Minutes — May 28, 2002 Attachment 10: Redevelopment Agency Minutes — April 22, 2002 Dissolution of Agcncy, Phase II.RDA Staff Report 2 13 Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report February 28, 2005 ATTACHMENT 1 REDEVELOPMENT AGENCY STAFF REPORT RE: "CONSIDERATION OF CONSULTANT SERVICES, PHASE H - DISSOLUTION OF REDEVELOPMENT AGENCY", OCTOBER 28, 2002 Dissolution of Agency, Phase II.RDA Staff Report 2 14 FILE COPY AGENDA REPORT DATE: October 28, 2002 TO: Chairperson and Members of the Redevelopment Agency THRU: John B. Bahorski, Executive Director FROM: Lee Whittenberg, Director of Development Services SUBJECT: CONSIDERATION OF CONSULTANT SERVICES, PHASE II — DISSOLUTION OF REDEVELOPMENT AGENCY SUMMARY OF REQUEST: Agency determination regarding proceeding with consideration of dissolution. If the Agency determines to proceed, the Agency should: ❑ Select preferred appraisal firm; ❑ Authorize the Executive Director to negotiate and execute the appropriate contracts in accordance with the proposals of the selected consultants; ❑ Adopt Resolution No. , A Resolution of the Redevelopment Agency of the City of Seal Beach Authorizing a Budget Amendment, No RDA 03 -01, for Consultant Services in Phase II — Dissolution of Redevelopment Agency; and ❑ Adopt Resolution No. , A Resolution of the Redevelopment Agency of the City of Seal Beach Accepting a Loan from the City of Seal Beach in the Amount of S 95,000.00. BACKGROUND: On April 22, 2002, the 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 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: Agenda Item C: \Documents and Settings \LWhittenberg\My Documents \RDA \Dissolution of Agency, Phase II.RDA Staff Repon.doc \LWU 0 -24 -02 Consideration of Consultant Services and Loan from City of Seal Beach — Phase'll Scope of Wdrk, *Dissolution of Redevelopment Agency Redevelopment Agency Staff Report October 28, 2002 ❑ Appraisal of.4gencv owned and leased properties: Staff has received proposals from two firms to conduct appraisals of the Agency -owned and optioned properties 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 59,700.00 to 532,850.00. ❑ KMA Phase II Aczencv 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 514,500.00. ❑ K vL4 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 59,000.00. Uncertain as to Agency bond counsel costs, estimated between 57,500.00 and 512,500.00. ❑ County of Orange AQencv 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 review to 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 57,500 and 512,500.00. ❑ 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 57,500 and 512,500.00. Summary of Anticipated Costs to Complete Phase II Work Program: Dissolution of Agency. Phase I1.RDA Staff Report 2 Consideration of Consultant Services and Loan from City of Seal Beach — Phase II Scope of Work, Dissolution of Redevelopment Agency Redevelopment Agency Staff Report October 28, 2002 Provided below is a summary of the various costs identified above: Phase II Agency Dissolution Study — Low High Cost Cost Services to be Provided Estimate 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 If the Agency determines to proceed with consideration of dissolution, the Agency should determine which appraisal firm would be appropriate to provide the requested appraisals for future Agency consideration, and authorize the Executive Director to negotiate and execute the appropriate contracts in accordance with the proposals of the various consultant firms discussed above. Requested Budget Amendment: If the Agency determines to proceed with consideration of dissolution it will be necessary for the Agency to authorize a budget amendment for the unanticipated consultant expense. Funds would be available, upon authorization by the City Council of the above - discussed loan to the Agency, in the Redevelopment Agency Fund Balance, Account Number 063- 000 -30420 and will be spent out of the Redevelopment Agency contract professional services account. Staff has prepared the appropriate resolution and it is provided as Attachment 5. The resolution has been prepared to reflect the maximum proposal amount under consideration, assuming the Agency determines to proceed to the stage of formal public hearings and dissolution of the Redevelopment Agency. Acceptance and Recordation of Loan Agreement with the City: 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 6. The resolution has been prepared to reflect the maximum loan amount, proposed at S95,000, 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 Dissolution of Agency, Phase I1.RDA Staff Report 3 Consideration of Consultant Services and Loan from City of Seal Beach — Phase 11 Scope of Work, Dissolution of Redevelopment Agency Redevelopment Agency Staff Report October 28, 2002 not be able to be repaid to the City until June, 2017. It will also be necessary for the City Council to agree to loan the necessary funds to the Agency. If the Agency determines to proceed, the appropriate City Council resolution has been prepared and will be on the City Council agenda this evening for consideration. - FISCAL IMPACT: The proposed study would determine if adverse impacts to the City General Fund would be created if the Agency were to be dissolved. 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: Agency deterrnination regarding proceeding with consideration of dissolution. If the Agency determines to proceed, the Agency should: ❑ Select preferred appraisal firm; ❑ Authorize the Executive Director to negotiate and execute the appropriate contracts in accordance with the proposals of the selected consultants; ❑ Adopt Resolution No. , A Resolution of the Redevelopment Agency of the City of Seal Beach Authorizing a Budget Amendment, No RDA 03 -01, for Consultant Services in Phase II — Dissolution of Redevelopment Agency; and ❑ Adopt Resolution No. , A Resolution of the Redevelopment Agency of the City of Seal Beach Accepting a Loan from the City of Seal Beach in the Amount of $ 95,000.00. NOTED AND APPROVED: L4e Whittenberg John B. Bahorski `birector of Development Services Executive Director Attachments: (6) Attachment 1: Letter Proposal dated October 22, 2002 re: Response to Request for Proposal regarding appraisals of Redevelopment Agency properties in the City of Seal Beach, submitted by R. P. Laurain & Associates Incorporated Dissolution of Agency, Phase ll.RDA Staff Report 4 Consideration of Consultant Services and Loan from City of Seal Beach — Phase 11 Scope of Work, Dissolution of Redevelopment Agency Redevelopment Agency Staff Report October 28, 2002 Attachment 2: Letter Proposal dated October 17, 2002 re: Proposal for Appraisal Services, 3 Larger Parcels, Seal Beach — APNs 043- 122 -036, 037 and 095 -001 -051, submitted by Donahue & Company, Inc. Attachment 3: Letter Proposal dated October 22, 2002 re: Proposal Services for Dissolution of Redevelopment Agency, Keyser Marston Associates, Inc. Attachment 4: Letter Proposal dated October 21, 2002 re: Proposal for Follow -up Assistance, Keyser Marston Associates, Inc. Attachment 5: Resolution No. , A Resolution of the Redevelopment Agency of the City of Seal Beach Authorizing. a Budget Amendment, No RDA 03 -01, for Consultant Services in Phase II — Dissolution of Redevelopment Agency Attachment 6: Resolution No. , A Resolution of the Redevelopment Agency of the City of Seal Beach Accepting a Loan from the City of Seal Beach in the Amount of $ 95,000.00 Dissolution of Agency, Phase 11.RDA Starr Report 5 Consideration of Consultant Services and Loan fr-ona City of Seal Beach — Phase II Scope of Work, Dissolution of Redevelopment Agency Redevelopment Agency Staff Report October 28, 2002 T ATTACHMENT .1 LETTER PROPOSAL DATED OCTOBER 22, 2002 RE: RESPONSE TO REQUEST FOR PROPOSAL REGARDING APPRAISALS OF REDEVELOPMENT AGENCY PROPERTIES IN THE CITY OF SEAL BEACH, SUBMITTED BY R. P. LAURAIN & ASSOCIATES INCORPORATED Dissolution of Agency, Phase 11.RDA Staff Report R. P. LALT RAI AS S O CIAT E S 1 N CO PPO R AT ED 3353 LINDEN AVENUE, SUITE 200 LONG BEACH, CA 90907 -4503 TELEPHONE (562) 426 -0477 October 22, 2002 FACSIMILE (562) 988 -2927 Mr. Lee Whittenberg Director of Development Services City of Seal Beach 211 Eighth Street Seal Beach, California 90740 -6379 Subject: Response to Request for Proposal regarding appraisals of Redevelopment- Agency properties in the City of Seal Beach, California Dear Mr. Whittenberg: Receipt is acknowledged of your recent invitation to submit a proposal for professional real estate appraisal services regarding certain properties owned by the Redevelopment Agency, or wherein the Agency has an option to purchase. Each property is identified and addressed with respect to the Orange County Assessor's Number, location, existing development, vesting, and objective of the appraisal. Property No. 1: • Orange County Assessor's No.: 43- 122 -36 • Located within the southwest quadrant of the intersection of Coast Highway and 12th Street, in Seal Beach. • The property is currently developed as a neighborhood commercial center having various stores and shops, plus on -site parking accommodations. • It is understood that the underlying fee interest in the property was acquired from the Los Alamitos Unified School District by the Redevelopment Agency; there is an outstanding balance on the purchase -money mortgage or trust deed note. The property was subsequently leased by the- Agency (lessor) to a developer (master lessee) for the development of the neighborhood commercial center; subleases have been entered by the master lessee with the various store and shop tenants. APPRAISERS • ANALYSTS Mr. Lee Whittenberg Director of Development Services City of Seal Beach October 22, 2002 Page 2 Property No. 1: (Continued) • The objective of the appraisal is the fair market valuation of the Agency's (lessor's) interest in the subject property. As part of the overall valuation study, an allocation can be provided of the value of the lessor's interest and master lessee's interest. It will be neces- sary to review a copy of the existing master lease, including all supplements, amendments, and exhibits, if any. The agreement between the Agency and School District should also be reviewed for any conditions or covenants that could influence the land value. Property No. 2: • Orange County Assessor's No.: 43- 122 -37 • Located within the northwesterly quadrant of the intersection of 12th Street and Landing Avenue, in Seal Beach. ▪ The site is developed with former school classrooms presently utilized as two separate child day care facilities. • The site is vested with the Los Alamitos Unified School District. The Redevelopment Agency is currently leasing the property with an option to purchase. The Agency is subleasing the property to the two child day care businesses. • The objective of the appraisal study is the fair market valuation of the subject property based on the highest and best use thereof. Property No. 3: • Orange County Assessor's No.: 095- 010 -51 • Located at the southwest corner of the intersection of Seal Beach Boulevard and Adolfo Lopez Drive, in Seal Beach. • The site is currently developed with the main Police Station, Animal Control Center, Animal Shelter, etc. • The fee simple interest in the property is vested with the Redevelop- ment Agency. The buildings and on -site improvements were constructed at the cost of the Agency. • The objective of the appraisal is the valuation of the subject land and improvements. An allocation of the total value, between the land and improvements, will be provided. R. P. L R A I N 84 AS S O CIATE S .¢0.•13..•,0 Mr. Lee Whittenberg Director of Development Services City of Seal Beach October 22, 2002 Page 3 The scope of work is essentially indicated above following comments regarding the objective of each appraisal. The scope of work will include a formal appraisal inspection of each property, review of the various interests of each property (i.e. lessor's interest, master lessee's interest, etc., if applicable), review and analysis of market data applicable to each property (land sales, improved property sales, building cost data, rental information, vacancy rates, operating expenses and ratios, etc.), and valuation analysis of each property. Title to each property will be assumed to be good and • merchantable; the value of each will be based accordingly. The formal appraisal report, addressing the value(s) of the three subject properties can be completed and delivered to your offices within 45 to 50 days following receipt of your authorization to proceed. The fee for appraisal services will be in the total amount of $9,700. This firm has the capability of performing the requested real estate appraisal services without the aid or assistance of sub - consultants. This firm has broad experience with the appraisal of commercial, industrial and residential property in beach communities within Orange, Los Angeles, and •San Diego Counties. Certain of the appraisal studies have included leased fee, master leasehold, and multiple levels of subleasehold interests. The subject appraisal study will be prepared in accordance with the Uniform Standards of Professional Appraisal Practice. A resume of background and qualifications is enclosed for your review. If you have any questions regarding this proposal, please contact me at your convenience. Very truly yours, R. P. LA • & ASSOCr S INC. -dor i < t ill#P- --iii... 00 - d' _ .L ra Certified General Real Estate Appraiser California Certification No. AG 007689 RPL:II Enclosure R. P. L A U R A I N 8, AS 5 O CIATES rca+•n...tO I ' RESUME OF O BACKGROUND AND QUALIFICATIONS • R. P. L A U R A I N &z ASSOCIATES APPRAISERS - ANALYSTS • PROFESSIONAL QUALIFICATIONS AND CLIENT REFERENCES OF • Ronald P. Laurain California Certification No. AG 007689 FIRM AFFILIATION: R. P. Laurain & Associates, Inc. 3353 Linden Avenue, Suite 200 Long Beach, California 90807 -4503 (562) 426 -0477 Ronald P. Laurain, President John P. Laurain, Vice President • Roger Douglass, Consulting Appraiser Vaughn A. Hosmann, Consulting Appraiser Scott A. Lidgard, Consulting Appraiser PROFESSIONAL ORGANIZATION AFFILIATIONS: • Appraisal Institute Senior member; hold professional endorsement and designation "SRPA" (senior real property appraiser), and "SRA" (senior residential appraiser). Past President, Chapter No. 94, Long Beach, California (1969). • Director (1971 -74). Delegate to California Appraisers Council (1973 -80). Served as chairman or member of various committees including Education Committee, Legislation & Research Committee, Professional Practices (Ethics) Committee, Senior Designation Committee, and Examination Committee. District Vice Governor (1979 -81). American Society of Appraisers Senior member; hold professional endorsement and designation "ASA" in urban real estate. Past President of Los Angeles Chapter (1974 -75). Ethics Counselor (1975 -76). Served as chairman or member of various committees including Membership Committee, Education Committee, Examiners Committee, and International Convention Education Committee. R. P. L A U R A I N 6e A SS0CIA.TES APPRAISERS - ANALYSTS • 1 PROFESSIONAL QUALIFICATIONS /REFERENCES (Continued) PROFESSIONAL ORGANIZATION AFFILIATIONS: (Continued) International Right of Way Association Senior member; hold professional endorsement and designation "S RWA." Member of Professional Development Committee, Los Angeles Chapter Certified General Real Estate Appraiser by the Office of Real Estate Appraisers, State of California. Certification No. AG 007689. American Arbitration Association Member of National Panel of Arbitrators (1968 - present). California Appraisers' Council President (1979). EXPERT WITNESS: Qualified as an expert on Real Property Valuation in the following courts: Los Angeles County Superior Courts. Orange County Superior Courts. Federal Bankruptcy Court. • APPRAISAL SERVICES FOR: Appraisal services rendered for: Cities: City of Arcadia City of El Segundo • City of Bell City of Gardena City of Bellflower City of Garden Grove City of Buena Park City of Hawaiian Gardens City of Carson City of Huntington Beach City of Cerritos City of Huntington Park City of Claremont City of Industry City of Colton City of Inglewood City of Commerce City of Irwindale City of Compton ,City of Lakewood City of Cudahy City of La Mirada City of El Monte City of La Puente R . P . L A I J R A I N Z. .A. SSOCIATES APPRAISERS • ANALYSTS 2 PROFESSIONAL QUALIFICATIONS /REFERENCES (Continued) APPRAISAL SERVICES FOR: (Continued) Cities: (Continued) - — • City of Lomita City of Rolling Hills Estates City of Long Beach City of San Jacinto City of Los Angeles City of San Juan Capistrano City of Lynwood City of Santa Ana City of Monterey Park City of Santa Fe Springs City of Norwalk City of Santa Monica City of Ontario City of Signal Hill City of Paramount City of South El Monte • City of Pasadena City of West Hollywood City of Redondo Beach City of Whittier City of Riverside - Redevelopment Agencies: Anaheim Redevelopment Agency Bell Redevelopment Agency Buena Park Redevelopment Agency Carson Redevelopment Agency Compton Community Redevelopment Agency Corona Redevelopment Agency El Cajon Redevelopment Agency Hawaiian Gardens Redevelopment Agency Huntington Beach Redevelopment Agency Huntington Park Redevelopment Agency Inglewood Redevelopment Agency La Mirada Redevelopment Agency Long Beach Redevelopment Agency Los Angeles Community Redevelopment Agency Los Angeles County Redevelopment Agency • Maywood Redevelopment Agency Monterey Park Redevelopment Agency Paramount Redevelopment Agency Pasadena Redevelopment Agency Santa Fe Springs Redevelopment Agency Signal Hill Redevelopment Agency Whittier Redevelopment Agency Other Public Agencies: Bassett Unified School District Caltrans Central Basin Municipal Water District Compton Unified School District R. P. L A U R A I N 8c ASSOCIATES APRAISERS - ANALYSTS ' P 3 PROFESSIONAL QUALIFICATIONS /REFERENCES (Continued) APPRAISAL SERVICES FOR: (Continued) Other Public Agencies: (Continued) - _ Cucamonga County Water District Federal Aviation Administration (FAA) Federal Housing Administration (FHA) Long Beach Transit Company Long Beach Unified School District Long Beach Water Department Los Angeles County Department of Beaches and Harbors Los Angeles County Facilities Management Department Los Angeles County Internal Services Department Los Angeles County Metropolitan Transportation Authority Los Angeles Unified School District Metropolitan Water District of Southern California Pasadena Unified School District Port of Long Beach Port of Los Angeles Port of San Diego Resolution Trust Corporation (RTC) Southern California Rapid Transit District State of California, Santa Monica Mountains Conservancy • Trust for Public•Land, national land conservation organization U. S. Department of Housing and Urban Development (HUD) U. S. Department of Interior, National Park Service U. S. Department of the Navy Partial Corporate List: Abrasive Finishing Co. Douglas Equipment Co. Allstate Insurance Co. Family Health Program . American Savings Farmers & Merchants Bank American Title Company Federal Home Loan Mortgage Amino!! U.S.A., Inc. Corporation Bank of America Federal Mogul Corporation Boise Cascade Ferro Corporation Buffums Goodwill Industries Capital Westward Inc. Great Western Bank Cascade Pump Company Harbor Bank Chevron USA Harriman Jones Medical Clinic CNA Insurance Hartford Insurance Group Coast Federal Bank ,International Industrial Commercial Grinding Co. Properties Coopers & Lybrand International Rectifier R. P. LAURA 1 N 6c ..SS0C1_ TE5 APPRAISERS • ANALYSTS • 4 PROFESSIONAL QUALIFICATIONS /REFERENCES (Continued) APPRAISAL SERVICES FOR: (Continued) • Partial Corporate List: (Continued) Kaiser Foundation Pan Pacific Nederland Lloyds Bank Queen City Bank Long Beach Community Republic Metal Hospital Rosecrans Medical Group Long Beach Memorial Sabin Robbins Paper Co. Hospital South Bay Leasing Corp. Long Beach Bank Southwest Diversified, Inc. Manhattan Properties, Inc. Suburban Coastal Corp. Marriott Corporation Sumitomo Bank Northern Trust Bank Texaco USA Northrop Corporation University Advisory Co.. • Obispo Medical Clinic Univ. of Southern California Orange Coast Title Co. Welts Fargo Bank Pacific Business Bank World Towers, Ltd. Pacific Valve, Inc. Zurn Industries Attorneys: Atkinson & Atkinson Nossaman, Guthner, Thomas G. Baggot Knox & Elliott Ball, Hart, Hunt, Brown, Oliver, Barr & Vose and Baerwitz O'Meiveny & Myers • - Christensen, White, Miller Pray, Price, Williams Fink & Jacobs & Russell Mark Curtis James C. Powers Josephine A. Fitzpatrick Glenn L. Rabenn • Garner & Kreinces Norman Rasmussen Patrick A. Hennessey Richards, Watson & Kirtland & Packard Gershon Lawrence H. Lackman Marc S. Rothenberg Laskin & Graham Jack D. Scott Jeffrey Lyon Robert F. Waldron Martin & Stamp Williams & Williams M. D. Miguelez David E. Wulfsberg Linda Moon George S. Zugsmith R. P. L A U R A I N 6: A S S O C I A T E S APPRAISERS - ANALYSTS 5 • PROFESSIONAL QUALIFICATIONS /REFERENCES (Continued) ACADEMIC BACKGROUND: Graduate of secondary schools in Wayne County (Detroit area), Michigan. Advanced studies at Henry Ford College, and the University of Michigan Extension. Completed additional studies at Compton College, and the University of California at Los Angeles Extension. Received Certificate in Real Estate from U.C.L.A. Successfully completed classes in Real Estate including: Real Estate Appraisal 1, Advanced Real Estate Appraisal, Condemnation Appraising and Eminent Domain, Principles of income Property Appraising, Legal Aspects of Real Estate, Real Estate Law, Real Estate Finance, Real Estate Management, Real Estate Practice, and Real Estate Research, plus various courses and seminars sponsored by the national appraisal organizations. INSTRUCTOR: California State University, Long Beach Real Estate Appraisal Guest speaker and lecturer on subject of real estate appraisal at various universities, colleges, professional appraisal organi- zations, etc., including: UCLA, California State University, Long Beach; Long Beach Community College; Cerritos Community College; Appraisal Institute; American Society of Appraisers; and, International Right of Way Association. ADVISOR: • Member of Assessment Practices Advisory Council (1978 -83) Los Angeles County Assessor Real Estate Examination Revision Study Committee Department of Real Estate, State of California R. P. L A U R A I N do ASSOCIATE S APPRAISERS • ANALYSTS 6 PROFESSIONAL QUALIFICATIONS /REFERENCES (Continued) BUSINESS AFFILIATIONS: Roy C. Laurain, Realtor and Appraiser, Detroit area, Michigan Staff Assistant - 2 years - -- - T. H. Scanlon Appraisal Company, Detroit area, Michigan Staff Appraiser - 2 years Security Bank (12 branches), Detroit area, Michigan Chief Appraiser - 1 year Locke Land Services, Long Beach, California Senior Appraiser, and Vice President - 7 years • R. P. Laurain & Associates, Inc., Long Beach, California Appraisers - Analysts, established January, 1969. • • R. P. L A U R A I N do A 55QCIATES APPRAISERS - ANALYSTS • 7 Consideration of Consultant Services and Loan from Cin- of Seal Beach — Phase 11 Scope of Work, Dissolution of Redevelopment Agency Redevelopment Agency Staff Report October 28, 2002 • • ATTACHMENT 2 LETTER PROPOSAL DATED OCTOBER 17, 2002 RE: PROPOSAL FOR APPRAISAL SERVICES, 3 LARGER PARCELS, SEAL BEACH - APNS 043 - 122 -036, 037 AND 095- 001 -051, SUBMITTED BY DONAHUE & COMPANY, INC. Dissolution of Agency, Phase II.RDA Staff Report 7 DONAHUE COMPANY, INC. PROPERTY AND URBAN ECONOMICS 23 CORPORATE PLAZA DRIVE JOHN C. DONAHUE, MAI SUITE 160 TELEPHONES: KEVIN J. DONAHUE, MAI NEWPORT BEACH. CALIFORNIA 92660 -7942 (949) 760 -3166 BARBARA L. ZACHRY, MAI (900) 734 -0074 SYDNEY H. HAWRAN, MAI FACSIMILE: JAMES C. MALM (9 760 -5496 CARL E. NELSON 'A'.W. d .rahueco corn October 17, 2002 Mr. Lee Whittenberg Re: Proposal for Appraisal Services Director of Development Services 3 Larger Parcels City of Seal Beach Seal Beach Redevelopment Agency APNs 043 -122 -036, 037 and 211 Eighth Street 095- 001 -051 Seal Beach, CA 90740 Proposal No. 6113 • Dear Mr. Whittenberg: I am pleased to respond to your Request For Proposal for valuation services required for the above referenced properties. It is my understanding that the three different properties include a retail shopping center, a school development now used as a day care facility and an industrial property currently used as the Police station and the city yard. The appraisal will contain a fair market value of the properties "as improved ". It is my understanding that the appraisals of the above noted properties will be used by the city for internal review and possibly for acquisition by the city where there is an option to purchase. SCOPE OF WORK • I propose to value the parcels in fee simple interest at their highest and best use. Interim use value may be included as well if the existing improvements are not the highest and best use of the parcels. Unless otherwise specified, the value will be based on a current date of value. Upon completion of the appraisal, I will prepare and deliver a total of three (3) copies of the complete appraisal report in a summary format meeting all requirements of the Uniform Standards of Professional Appraisal Practice (U.S.P.A.P.), as well as the Standards of Professional Practice and Code of Professional Ethics of the Appraisal Institute. The report will also be prepared in accordance with State and Federal Uniform Relocation Assistance and Real Property Acquisition Acts, including any amendments, California Eminent Domain Law, California Redevelopment Law and any other applicable statutes. The appraisal will require a determination of the highest and best use of each of the three subject properties. Once the highest and best use for each parcel is determined, a comparable sales search will begin for land value as well as applicable improved value comparables. If necessary, the all three generally accepted approaches to value will be used including the replacement cost, direct comparison and income approach. The comparable data search will be concentrated on properties proximate to the subjects but may be expanded depending on the existing market for each property type. Given that there are three types of property uses involved in the appraisal, at Mr. Lee Wittenberg -2- October 17, 2002 least three sets of data will be required; retail /commercial, school /office and industrial (land and improvements). As at least one of the properties is corisidered "special purpose ", additional cost data will also be required. The appraisal process will begin with a physical inspection of each of the properties and a search of the history of each property including planning documents and building permit information to be provided by the city. Prior to beginning work on the appraisal, I will meet with the Redevelopment Agency to review the scope of work and appraisal issues for this assignment. If desired, I will also submit preliminary findings to the Agency at a pre - submittal meeting prior to finalizing the report. FEES AND TIME SCHEDULE The total proposed not to exceed appraisal fee for this valuation is $32,850. This fee is payable upon delivery of the report. Proposed time of delivery is ninety (90) working days from the authorization to proceed. The proposed fee breakdown is as follows: Parcel 043 -122 -036 $10,800 Parcel 043 -122 -037 $ 9,450 • Parcel 095- 001 -051 $12,600 If the agency desires, the valuations of the properties can be delivered separately with the first of three provided within sixty -five (65) working days and the last two to follow within the proposed ninety (90) working days. If this option is taken, 1/3 ($10,950) of the proposed fee will be due upon delivery of the first appraisal document. The proposed fee for this assignment assumes the properties are free and clear of hazardous waste and contaminants. This proposal also includes the assumption that the City will supply title reports and the parcels' legal description prior to the start of this appraisal project. CAPABILITIES TO PERFORM REQUESTED SERVICES I have included as an attachment to this proposal a description of my professional background including my qualifications. I have had extensive experience in all three required property valuation types (retail /shopping center, office, industrial property) and, if required, will be happy to provide references pertinent to past work of this type. Projects of this type I have appraised recently include a restaurant/retail property in Fontana, a retail strip center for the Whittier Redevelopment Agency, 10 commercial properties for the City • of Santa Ana, an industrial facility along the Alameda Corridor for ACTA, two large industrial buildings in the Irvine Industrial Park area for TCA, as well as numerous office /commercial and Mr. Lee Wittenberg -3- October 17, 2002 • industrial properties along the I -5 Freeway for the State of California. 1 have appraised numerous office properties for the State of California in the context of the 1 -5 widening project over the past 10 y _ ears. PROPOSED SUB - CONSULTANTS None. With this proposal, I have included a copy of my hourly billing rates. If required, additional hours in consulting are time -based fees that will be accounted for and billed in addition to the proposed report fee. Should you have any questions, please do not hesitate to call me. Thank you for the opportunity to propose on this appraisal project. 1 look forward to working with you. Respectfully submitted, DONAHUE & COMPANY, INC. • • d Sydney H. Hawran, MAI • SHH:tme • Attachment 1 SYDNEY H. HAWRAN, MAI STATE CERTIFICATION NO. AG018039 QUALIFICATIONS EXPERIENCE Donahue and Company, Inc., Newport Beach, California; 1994 - Present Senior Appraiser - Responsible for valuation of all property types. Ms. Hawran's most recent assignments include the analysis of fee simple, leased fee and leasehold interests for litigation purposes. Significant experience in appraisal, project management and review of multiple parcel full and partial taldngs and damage analysis for large landholdings and major income properties for eminent domain purposes. An emphasis on complex partial takings from a variety of commercial and industrial properties inclusive of self storage facilities, research and development properties, office buildings and hotels. Her experience includes an expertise in multi parcel takings for large agency projects ranging from roadways to school sites. She is qualified as an expert witness in San Bernardino and Orange County Superior Courts. Lea Associates. Inc.. 1992 - 1994 Senior Analyst - Responsible for providing real estate analysis and studies, with emphasis on narrative appraisal assignments dealing with all major real estate categories. Project management duties included review of and guidance in appraisal practice to staff appraisers. Significant appraisal assignments include the valuation of a planned community in Ventura County. Other major property types including office and hotel along the I -5 Freeway for right of way acquisition by the Orange County Transportation Authority. 1983 - 1992 Ms. Hawran has provided real estate consultation and analytical services for public and private sectors. Her range of appraisal experience encompasses commercial and industrial property, including office buildings, retail centers, hotel/motels, and industrial buildings throughout Southern California. Land appraisal assignments have included agricultural, agricultural/residential subdivision, multi - residential, and commercial/industrial site valuation. Property rights appraised have included both fee simple and leased fee interest. Other appraisal assignments have included the valuation of access rights, partial interest, easement, and full acquisition appraisal work in all of the preceding areas along with highest and best use studies and absorption estimates. The concentration of Ms. Hawran's work has been performed in Orange, San Bernardino, Riverside, San Diego, and Los Angeles counties. Ms. Hawran spent eight years as a Right of Way Agent for the State of California, Department of Transportation serving in the appraisal, relocation and acquisition functions of the Department. State service took place in District 8 (San Bernardino and Riverside counties) and District 12 (Orange County). • 2 MEMBERSHIP /AFFILLATION Appraisal Institute, MAI Designation No. 10069 Certified General Real Estate Appraiser, Office of Real Estate Appraisers. State of California, Certificate No. AG018039 International Right of Way Association Active in several professional organizations, Ms. Hawran is a past President of the Southern California Chapter of the Appraisal Institute and still active in the Region on a National level. She is also a past Orange County Chapter President and National Director of the International Right of Way Association and is an appraisal course instructor for both organizations: Course Instructor Appraisal Institute * Course 410 - Standards of Professional Practice Part A (USPAP) * Course 420 - Standards of Professional Practice Part B (Code of Professional Ethics) * Course 430 - Standards Part C . International Right of Way Association * • Course 101 - Principles of Real Estate Acquisition * Course 400 - Uniform Standards of Professional Appraisal Practice * Course 401 - The Appraisal of Partial Acquisitions * Course 403 - Easement Valuation * Course 404 - Appraisal Theory and Principles * Course 400 - Uniform Standards of Professional Appraisal Practice EDUCATION University of California, Los Angeles, California: B.A. Degree, Economics, 1978 University of California, Riverside, California: Graduate School of Management course work in economics, finance, land use planning and management, 1986 University of California, Irvine, California: Commercial and industrial development management and real estate finance courses, 1989 - 1991 Appraisal Institute Courses/Examinations: * Comprehensive Examination, 1992 * Demonstration Appraisal Report, 1992 * Report Writing and Valuation Analysis, 1989 * Standards of Professional Practice, 1988 3 EDUCATION (Cont.) * Case Studies in Real Estate Valuation, 1988 * Capitalization Theory and Techniques, Part B, 1987 * Capitalization Theory and Techniques, Part A, 1986 * Basic Valuation Procedures, 1985 * Residential Valuation, 1984 * Real Estate Appraisal Principles, 1983 International Right of Way Association Courses: * Property Descriptions, 1988 * Interpreting Engineering Drawings, 1988 * Business Relocation, 1986 * The Appraisal of Partial Acquisitions, 1986 * Communications in Real Estate Acquisition, 1986 * Principles of Real Estate Acquisition, 1984 * Relocation Assistance, 1983 • DONAHUE & COMPANY, INC. CORPORATE PROFILE Donahue and Company is a full service forensic real estate appraisal firm, currently comprised of four senior level analysts, one staff appraiser, a research department and secretarial staff. The company has been in operation locally for thirty -six years, with broad experience throughout Southern California and the western United States. An extensive in -house research library is maintained to provide resourceful and reliable information in order to ensure the completion of appraisal assignments in a timely manner. An extensive client list of public agencies, financial institutions, corporate and private clients is available upon request. The firm specializes in litigation related appraisal, inclusive of eminent domain. In addition to collective appraisal experience, senior personnel have significant related professional backgrounds in the areas of title insurance, right -of -way acquisition, land planning, engineering and relocation assistance. This diversity and working knowledge of the State and Federal acquisition guidelines and eminent domain law, as applied to appraisal practice, is of great assistance in undertaking appraisals and/or right -of -way consultation. Pertinent professional background and related experience qualifications are detailed in individual staff resumes. Donahue and Company is currently insured in conformance with required Commercial General Liability and Automobile Liability Coverage. All employees of Donahue and Company are covered by State Workers Compensation. The following is a brief synopsis of each appraiser's resume. John C. Donahue, MAI, President and Chairman of Donahue & Company, Inc., has been a real estate appraiser since 1963. Related experience includes serving as a County • of Orange Right -of -Way Agent, and as an acquisition agent from 1959 to 1963. He has a B.A. degree from Whittier College and attended law classes 1961 -1963 at Southwestern Law University. The Appraisal Institute .(previously the American Institute of Real Estate Appraisers) designated Mr. Donahue as Member Number 5998 in November 1979, and he is currently certified under the Institute's Voluntary Continuing Education Program. In addition, he is a charter member of the Orange County Chapter of the International Right - of -Way Association and has served as a speaker, instructor and lecturer for many professional organizations throughout California. Mr. Donahue is also a California State Certified General Real Estate Appraiser. Specializing in litigation support services, John Donahue's reputation as a forensic witness is prominent throughout the State. He has testified in the Superior Courts of all Southern California Counties, U.S. Court of Claims, Federal Bankruptcy Court and before Property Tax Appeal Boards. Valuation specialties include all eminent domain - related fields, transportation corridors, easement valuation and mitigation properties. • CORPORATE PROFILE (Cont.): Barbara Zachry, MAI, Senior Appraiser, entered the appraisal profession in 1983, joining Donahue & Company in 1986. Related experience includes serving as a Real Property Agent for Wilidan Engineering and as an Assistant Right -of -Way Agent for the City of Fullerton. She obtained an MA Degree from California State University, Fullerton, a BA Degree from University of California at Los Angeles and was designated as a member of The Appraisal Institute in 1994. She is a Certified General Real Estate Appraiser with the State of California and a member of the International Right -of -Way Association, Chapter 67, currently serving as President. She has served on several active committees of the Southern California Chapter of the Appraisal Institute. Mrs. Zachry specializes in appraising investment grade properties, right -of -way acquisition and all matters relating to eminent domain law. Clientele served included financial institutions, public agencies, law firms and private industry. She is qualified as an expert witness in Orange County Superior Court. Kevin J. Donahue, MAI, Senior Appraiser and Vice President of Donahue & Company, joined the firm in 1986. He obtained a BA Degree in finance, concentrating in real estate studies, from California State University, Fullerton. Mr. Donahue holds the MAI designation and is a California State Certified General Real Estate Appraiser. In addition, Mr. Donahue is a member and Past President of the International Right -of -Way Association, Chapter 67. He has completed numerous courses and professional development seminars offered by the Appraisal Institute and the International Right -of- Way Association. Mr. Donahue specializes in full and partial takings in eminent domain matters, special purpose properties, easement acquisition and public agency work. He has testified as an expert witness in Los Angeles and Orange County Superior Courts and Federal Bankruptcy Court. Additional duties as Vice President include review of staff appraisals, contract procurement, production control and personnel management. Sydney H. Hawran, MAI, Senior Appraiser, a native Southern Californian, began her real estate career in 1983. Ms. Hawran was educated at the University of California at Los Angeles and has developed a specialty in the area of Right -of -Way appraisal after spending eight years with the State of California Department of Transportation. Ms. Hawran is a State Certified General Real Estate Appraiser. In the International Right -of- Way Association (IRWA), she served as President and International Director for the Orange County Chapter. Ms. Hawran is also an approved Instructor of Standards of Professional Appraisal Practice for the Appraisal Institute and a Certified Appraisal • 3 CORPORATE PROFILE (Cont.): Instructor for IRWA. She is active in Chapter, Regional and National committee leadership of the Appraisal Institute and is past President of the Southern California Chapter. Her work includes a broad range of appraisal assignments for acquisition, condemnation, litigation support and lending purposes. Ms. Hawran has undertaken significant assignments, being responsible for providing real estate analysis and studies, with emphasis on narrative appraisal assignments within all major real estate categories. Other significant experience includes not only appraisal of, but project management and review coordination of partial takings and damage analysis for large land holdings, major income properties and multi - parcel acquisition for eminent domain purposes. Detailed resumes for each appraiser are available upon request. • RATE SCHEDULE Effective June 1, 2001 Due to the diversity of assignments undertaken by our firm, all bids are project - specific. Large projects or those of extended duration may benefit from economies of scale. Where required, appraisal assignments are proposed as lump sum rather than at hourly rates. In complex matters, or when litigation support is necessary, Donahue & Company utilizes a Two -Tier hourly rate schedule, with each tier defined as follows: Tier A Hours: This category applies to time spent in a) initial appraisal investigation and subsequent report preparation, b) attorney /client conferences, and c) pretrial preparation including trial notebook, statements of valuation and court exhibit preparation. Tier B Hours: Hours spent in either a) deposition, b) arbitration and /or c) actual trial testimony, including standby, are billable under Tier B rates. Tier A Tier B John C. Donahue, MAI $300 $400 Barbary Zachry, MAI $250 $300 Sydney H. Hawran, MAI $250 $300 Kevin J. Donahue $225 $275 Sharon Fagundes $150 $175 James Malm $150 $175 • Research Personnel $90 N /Ap. Administrative Assistance $50 N /Ap. In addition to hourly billings, expenditures incurred for sub - consultants, trial exhibits, messenger services, aerial photographs, etc. will be passed through to the client, with invoice copies attached to the monthly statements. A 10 percent administrative fee will be added to all pass - through expenses. Unless otherwise stated, payment terms are net thirty (30) days. Any past due balance is subject to a finance charge, computed at the periodic rate of 1.25 percent per month, equal to an annual percentage rate of 15 percent per annum. In addition to invoices rendered and interest thereon, the client agrees to pay all legal expenses and costs incurred by Donahue & Company, Inc. in the collection of any delinquent accounts. • DONAHUE & COMPANY, INC. Consideration of Consultant Services and Loan from City of Seal Beach — Phase II Scope of Work, Dissolution of Redevelopment Agency Redevelopment Agency Staff Report October 28, 2002 ATTACHMENT 3 LETTER PROPOSAL DATED OCTOBER 22, 2002 RE: PROPOSAL SERVICES FOR DISSOLUTION OF REDEVELOPMENT AGENCY, KEYSER MARSTON ASSOCIATES, INC. • • • Dissolution of Agency, Phase 11.RDA Staff Report 8 KEYSER M A R S T O N ASSOCIATES I N C. ADVISORS IN: REAL ESTATE 500 SOUTH GRAND AVENUE, SUITE 1480 REDEVELOPMENT LOs ANGELES, CALIFORNIA 90071 AFFORDABLE HOUSING PHONE: 213/6:2-8095 ECONOMIC DEVELOPMENT FAX . 213/622 - 5204 FISCAL IMPACT INFRASTRUCTURE FINANCE (�1 = • VALUATION AND CITY Or SEAL BEACH LITIGATION SUPPORT OCT z 3 2002 Los Angeles Calvin E. Hollis, II October 22, 2002 DEPARTMENT OF Kathleen H. Head DEVELOPMENT SERVICES lames A. Rabe Paul C. Anderson Gregory D. Soo -Hoo Mr. Lee Whittenberg San Diego Director of Development Services Gerald M. Trimble Robert J. Wetmore City of Seal Beach Paul C. Matta 211 Eight Street SAN FRANCISCO Seal Beach, California 90740 -6379 A. Jerry Keyser Timothy C. Kelly Proposal Services for Dissolution of Redevelopment Agency Kate Earle Funk Re: Pro P P 9 Y Debbie M. Kern Dear Mr. Whittenberg: - As requested, Keyser Marston Associates, Inc. (KMA) and Murphy & Davis, LLP (M &D) have prepared the attached team proposal to provide Redevelopment Plan dissolution services to the City of Seal Beach. The proposed scope of services provides for 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 Plans. This analysis would expand our previous Phase 1 audit of financial obligations of the Agency, and also includes a summary of the impact on blight elimination that would be referenced in the dissolution ordinances. Our team will work closely with staff to ensure the process will-proce•d in .a timely manner which we anticipate to be completed in three months. We appreciate the opportunity to submit this proposal. Feel free to call us with any questions or comments at (213) 622 -8095. Sincerely, KEYSER MARSTON ASSOCIATES, INC. Paul C .Anderson Principal PA021001 a.KMA:PA:god 99900.000.002/10/22/02 SCOPE OF SERVICES Keyser Marston Associates, Inc. (KMA) and Murphy & Davis, LLP (M &D) propose to provide redevelopment plan services to the City of Seal Beach to identify the financial impacts and affects on the remaining blighting conditions (if any) resulting from the termination of the City's two redevelopment projects and dissolution of the City's Redevelopment Agency. KMA and M &D will also provide the documentation and assist the City in the legal process related to these actions. KMA and M &D have worked successfully together in the past on redevelopment plan adoptions and amendments, and as such can provide the City with well - integrated documents within a timely manner. The California Community Redevelopment Law does not contain specific procedures for the early termination of a redevelopment plan, but does contain procedures for amending a redevelopment plan. The early termination of a redevelopment plan is akin to an amendment shortening the life of the plan. • M &D would be responsible for the overall coordination of the study and termination /dissolution process including preparing and monitoring a schedule of actions, reviewing the report accompanying the proposed termination of the projects and preparing resolutions and ordinances required in connection with terminating the redevelopment projects and dissolving the Agency. KMA would analyze the financial impacts of terminating the redevelopment projects including addressing remaining blight. A. DOCUMENT PREPARATION AND REVIEW Task 1 — Schedule of Actions - M &D M &D will prepare a schedule of actions identifying all activities required by law leading to the termination of the Redevelopment Plans and the dissolution of the Agency. The schedule lists actions, responsible parties, scheduled dates and documents to be prepared. This includes schedule updates as necessary. Task 2 — Resolutions, Notices, Ordinance, and Responses to Written Objections — M&D and KMA M &D would prepare all required resolutions and ordinances, together with affidavits of mailing and a procedural outline for the conduct of joint and concurrent public hearings to consider termination of the Plans. M &D will prepare these documents for staff's use. Together M &D and KMA will prepare responses to written objections to the proposed terminations of the Plans and dissolution of the Agency (if any). PA0210014. K MA: P A: gbd 99900.000.002/10/22/02 Task 3 — Mailing Notices and Labels - KMA KMA will prepare required public notices and provide Agency staff with mailing labels for mailing public notices to property owners, taxing agencies and others, as appropriate, to be notified of the termination of the redevelopment plans and dissolution of the Agency. Using the County Assessor data for the Project Areas, KMA will prepare mailing labels • and the associated list to be used for the distribution of the joint public hearing notice for owners. Existing Agency occupant lists or Assessor site addresses will be used for the occupant mailing list. For staff's reference and use, KMA will also provide staff with a hard copy of the list of taxing agencies, owners and occupants and an electronic file. Task 4 — Report to City Council - KMA KMA will prepare a report of the Agency to the City Council describing the reasons for terminating the Redevelopment Plans and dissolving the Agency, as well as information and analysis necessary to support determinations by the City Council that the conditions precedent to termination of the Plans and dissolution of the Agency have been satisfied (Le., no outstanding indebtedness or contractual obligations, completion of all required affordable housing activities). M &D will consult with KMA concerning the preparation of the report, including review of background materials and review of a draft of the report, as . appropriate. Based upon the findings in the Implementation Plan and discussions with Agency staff KMA will prepare a description of the remaining blighting conditions in the Project Areas and how these remaining blighting conditions are anticipated to be alleviated following the termination of the redevelopment projects the existing implementation plan. KMA would conduct a review and analysis of the Agency's two Redevelopment Plans, the Implementation Plan and the Agency's audited financial statements for the most recent fiscal year to analyze the effect of the termination of the Redevelopment Plans. KMA will also prepare a financial feasibility analysis which incorporates the previously projected tax increment analysis prepared in the Phase 1 scope of services with a cash flow projection which can demonstrate how existing indebtedness obligations of the Agency will be satisfied so that dissolution can occur. Note that this feasibility analysis will be contingent upon (a) the Agency providing all necessary commercial appraisals of Agency -owned real estate; (b) legal counsel's opinion supporting the ability for the County or other financial entity to assume responsibility for payment of the Agency's existing indebtedness obligations and (c) the County's written agreement to assume the same. B. MEETING ATTENDANCE Both KMA and M &D will attend the joint and concurrent public hearings. Page 2 PA0210014.KMA:PA:gbd 99900 000.002/10/22/02 SCHEDULE It is anticipated that the process could be accomplished within a three -month time period: • Month 1 would involve preparation of the report of the Agency to the City Council. • Month 2 would involve actions of the Planning Commission (reporting on the proposed Plan terminations), Agency and City Council (approving /receiving the Agency's report and setting joint and concurrent public hearings to consider the Plan terminations). • Month 3 would involve noticing and conducting the joint and concurrent public hearings, and the final actions on the ordinances terminating the Plans and dissolving the Agency. Page 3 PA0210014.KMA: PA:gcd 99900.000.002/10 /22/02 BUDGET KMA and M &D propose to complete the tasks outlined in Section 1 for a fixed fee of $14,500 including expenses. This includes a budget of $10,000 for KMA and $4,500 for M &D. Additional services beyond those identified in the scope would be billed at the hourly rates listed below. KEYSER MARSTON ASSOCIATES, INC. HOURLY FEE SCHEDULE 2002 A. JERRY KEYSER * $ 210.00 MANAGING PRINCIPALS* $ 200.00 PRINCIPALS* $ 185.00 MANAGERS* $ 155.00 SENIOR ASSOCIATES $ 140.00 ASSOCIATES $ 120.00 SENIOR ANALYSTS $ 105.00 ANALYSTS $ 90.00 TECHNICAL STAFF $ 72.50 ADMINISTRATIVE STAFF $ 57.50 Directly related job expenses not included in the above rates are: auto mileage, air fares, hotels and motels, meals, car rentals, taxies, telephone calls, delivery, electronic data processing, graphics and printing. Directly related job expenses will be billed at 110% of cost. Monthly billings for staff time and expenses incurred during the period will be payable within thirty (30) days of invoice date. A charge of 1% per month will be added to all past due accounts. Rates for individuals in these categories will be increased by 50% for time spent in court testimony. MURPHY & DAVIS, LLP HOURLY FEE SCHEDULE Attomeys $ 175.00 Paralegals $75.00- $ 95.00 Extraordinary expenses, such as courier services and express mail, are separately itemized and billed. Routine expenses, such as long distance telephone calls, copying, postage, etc., are not separately itemized but are covered by a two percent (2 %) administrative charge added to each billing. Page 4 PA0210014.KMA:PA: gbd 99900.000.002/10 /22/02 Consideration of Consultant Services and Loan from City of Seal Beach — Phase 11 Scope of Worl:, Dissolution of Redevelopnzent Agency Redevelopment Agency Staff Report October 28, 2002 ATTACHMENT 4 LETTER PROPOSAL DATED OCTOBER 21, 2002 RE: PROPOSAL FOR FOLLOW -UP ASSISTANCE, KEYSER MARSTON ASSOCIATES, INC. • • • • Dissolution of Agency, Phase I1.RDA Staff Report 9 KEYSER M A R S T O N ASSOCIATES I N C. A DVISDRSIN: REAL ESTATE 500 SOUTH GRAND AVENUE. SUITE 1480 REDEVELOPMENT AFFORDABLE HOUSING Los CALIFORNIA 90071 ECONOMIC DEVELOPMENT PHONE: NE: E: 213 / 313/6'!2 -8095 , FAX: 213/622 -5204 CITY OF SEAL BEACH FISCAL IMPACT INFRASTRUCTURE FINANCE VALUATION AND OCT J 2O LITIGATION SUPPORT DEPARTMENT OF October 21, 2002 DEVELOPMENT SERVICES Los A ngeles Calvin E. Hollis, II Kathleen H. Head James A. Rabe Paul C. Anderson Mr. Lee Whittenberg Gregory D. Soo -Hoo City of Seal Beach San D iego 211 Eighth Street Gerald M. Trimble Paul C. Marra Seal Beach, California 90740-6279 SAN FRANCISCO A. Jerry Keyser Re: Proposal for Follow -up Assistance Timothy C. Kelly Kate Earle Funk Robert J. Wetmore Dear Mr. Whittenberg: Debbie M. Kern Pursuant to your request, Keyser Marston Associates, Inc. (KMA) is providing this proposal for follow up assistance regarding the potential dissolution of the Seal Beach Redevelopment Agency. The City desires follow up assistance in its investigation of dissolution alternatives that may be available in conjunction with Orange County assuming the Agency's existing debt service liabilities. This assistance will be provided to the Agency on a time and materials basis, with a not -to- exceed budget of $9,000. The proposed work scope would include: 1. Discussions with a bond counsel, mutually agreeable with the County Orange and the Redevelopment Agency, to determine the legal feasibility of permitting the County to assume and administrate future debt service obligations for the Agency's existing tax allocation bonds. 2. Additional discussions with County Executive Office representatives regarding the Agency's consideration of item 1 above. As of this writing, KMA is awaiting word from Mr. Paul Lanning of the County Executive Office regarding the City's cost to reimburse the County for its outside legal counsel expenses to review this offer. We are therefore unable to provide this cost to you at this time. Sincerely, • KEYSER MARSTON ASSOCIATES, INC. -- Greg Soo- Principal • 0210038.KMA:GSN:gbd 99900.000.002 Consideration of Consultant Services and Loan from City of Seal Beach — Phase 11 Scope of Work, Dissolution of Redevelopment Agency Redevelopment Agency Staff Report October 28, 2002 ATTACHMENT 5 RESOLUTION NO. , A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH AUTHORIZING A BUDGET AMENDMENT, NO RDA 03 -01, FOR CONSULTANT SERVICES IN PHASE II - DISSOLUTION OF REDEVELOPMENT AGENCY Dissolution of Agency, Phase II.RDA Staff Report 10 Consideration of Consultant Services and Loan from City of Seal Beach — Phase II Scope of Work, Dissolution of Redevelopment Agency Redevelopment Agency Staff Report October 28, 2002 RESOLUTION NO. A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH AUTHORIZING A BUDGET AMENDMENT, NO RDA03 -01, FOR CONSULTANT SERVICES IN PHASE II - DISSOLUTION OF • REDEVELOPMENT AGENCY THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH DOES HEREBY RESOLVE: WHEREAS, the fiscal year budget requires budgetary amendments as outlined below: CURRENT PROPOSED BUDGET DEPT ACCOUNT BUDGET BUDGET AMD (DIFF) Redevelopment Agency — Riverfront Project Area Contract Prof. Services 063- 081 -44000 $ 3,243 $ 98,243 $95,000 NOW, THEREFORE BE IT RESOLVED that the Redevelopment Agency of the City of Seal Beach hereby adjusts Redevelopment Agency- Riverfront -Project. Area Contract Professional Services, subject to City Council adoption of Resolution No. , A Resolution of the City Council of the City of Seal Beach Authorizing a Loan to the Seal Beach Redevelopment Agency in the Amount of $ 95,000. PASSED, APPROVED AND ADOPTED by the Redevelopment Agency of the City of Seal Beach at a meeting thereof held on the day of 2002. AYES: Agencyrnembers NOES: Agencylnembers • Dissolution of Agency, Phase 11.RDA Staff Report 11 Consideration of Consultant Services and Loan from City of Seal Beach — Phase 11 Scope of Work, Dissolution of Redevelopment .4gency Redevelopment Agency Staff Report October 28, 7002 ABSENT: Agencymembers ABSTAIN: Agencymembers Chairman 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 Redevelopment Agency of the City of Seal Beach, at a regular meeting thereof held on the day of , 2002. Joanne M..Yeo, City Clerk/Secretary Seal Beach Redevelopment Agency • Dissolution of Agency, Phase 11.RDA Staff Report 1 Consideration of Consultant Services and Loan from City of Seal Beach — Phase 11 Scope of Work, Dissolution of Redevelopment Agency Redevelopment Agency Staff Report October 28, 2002 ATTACHMENT 6 RESOLUTION NO. , A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH ACCEPTING A LOAN FROM THE CITY OF SEAL BEACH IN THE AMOUNT OF $ 95,000.00 • • Dissolution of Agency, Phase II.RDA Staff Report 13 Consideration of Consultant Services and Loan from City of Seal Beach — Phase II Scope of Work, Dissolution of Redevelopment .4gencv Redevelopment Agency Staff Report October 28, 2002 RESOLUTION NO. A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH ACCEPTING A LOAN FROM THE CITY OF SEAL BEACH IN THE AMOUNT OF 595,000.00 THE REDEVELOPMENT AGENCY 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 Seal Beach City Council will be considering the authorization of said loan in the amount of $ 95,000 to the Redevelopment Agency of the City of Seal Beach on October 28, 2002 through the adoption of City Council Resolution No. ; 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 Redevelopment Agency of the City of Seal Beach hereby agrees to accept from 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 20, 2017 together with simple interest of 5% per annum, subject to City Council adoption of Resolution No. , A Resolution of the City Council of the City Dissolution of Agency, Phase II.RDA Staff Report 1 Consideration of Consultant Services and Loan fi•onz City of Seal Beach — Phase 11 Scope of Work, Dissolution of Redevelopment Agency Redevelopment Agency Staff Report October 28, 2002 of Seal Beach Authorizing a Loan to the Seal Beach Redevelopment Agency in the Amount of 5 95,000. PASSED, APPROVED AND ADOPTED by the Redevelopment Agency of the City of Seal Beach at a meeting thereof held on the day of 2002. AYES: Agencymembers NOES: Agencymembers ABSENT: Agencymembers AB STAIN: Agencymembers Chairman 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 Redevelopment Agency of the City of Seal Beach, at a regular meeting thereof held on the day of 2 002. Joanne M. Yeo, City Clerk/Secretary • Seal Beach Redevelopment Agency • Dissolution of Agency, Phase II.RDA Staff Report 15 Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report Februmy 28, 2005 ATTACHMENT 3 CITY COUNCIL STAFF REPORT RE: "CONSIDERATION OF LOAN TO REDEVELOPMENT AGENCY - CONSULTANT SERVICES FOR DISSOLUTION OF REDEVELOPMENT AGENCY, PHASE II WORK PROGRAM", OCTOBER 28, 2002 Dissolution of Agency, Phase II.RDA Staff Report 2 16 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 Services to be Provided Estimate Estimate Appraisal of Agency owned and leased properties $ 9,700 $ 32,850 KIVLk Phase II Agency Dissolution Services $ 14,500 $ 14,500 KIvLA 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 S 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 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 Loan Authorization for Dissolution of Agency, Phase !ICC Staff Report Consideration of Loan to the Redevelopment . 4gency — Phase 11 Scope of Work, Dissolution of Redevelopment Agency City Council Staff Report 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 MCC Staff Report Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report February 28, 2005 ATTACHMENT 2 REDEVELOPMENT AGENCY MINUTES - OCTOBER 28, 2002 Dissolution of Agency, Phase II.RDA Staff Report 2 15 Page Three - Redevelopment Agency Minutes - October 28, 2002 FILE be resolved, that may be better once decisions have been made rather than having discussions in this venue. She noted that these are the lives of people, a lead time would be necessary if something is going to occur where people are not going to be able to afford to stay in their homes after the years of time and energy that the homeowners put into accomplishing this supposed purchase and find at this point a critical component of the purchase is going to be taken away without the Park residents having an opportunity to be part of the dialog. There being no further comments, Chairman Campbell declared the Public Comment period to be closed. APPROVAL OF MINUTES Doane moved, second by Yost, to approve the minutes of the September 23, 2002 regular meeting. AYES: Antos, Campbell, Doane, Larson, Yost NOES: None Motion carried CONSULTANT SERVICES - DISSOLUTION OF AGENCY The Development Services Director explained that staff has attempted to provide to the Agency what is estimated to be continuing costs if the Agency were to continue with the dissolution consideration process, as indicated in the staff report there are appraisals that need to be done of the property, one has been presented to the Agency by a member of the public at this meeting, there is a formal process that the City should go through to select an appropriate appraisal firm, that has been done at the direction of the Agency, there is a proposal from Keyser Marston to do Phase II work that is necessary, and staff has tried to identify a range of costs but as yet have not been clearly defined for County legal counsel to look at the.County accepting the debts of the Agency to retire the bonds based upon their receipt of the tax increment funds that would normally flow to the Agency, there is a necessity for review by bond counsel for both the Redevelopment Agency bonds that were refinanced in year 2000 and the Trailer Park bonds to ensure that any early • payment into the bond retirement fund is in accordance with the bond documents, then there are additional costs outlined in the document for both City staff functions and for the City Attorney to provide additional services should the Agency determine to proceed. The Director pointed out that there is a range in the costs which is dependent upon the appraisal firm that is selected if the determination is to proceed with this process, as outlined, the City received two proposals, one is $9,700 to appraise three dir' °T• °nt properties that the Agency either owns' or has an option to purchase, up to a $32,850 amount for the same appraisal work, the other costs are the same throughout the work program. The Director said if the Agency determines to proceed, at this point the Agency does not have any unallocated funds available to pay for the associated consultant costs therefore there would be need to accept a loan from the City assuming the Council determines to make such loan available to the Agency, resolutions have been prepared for that purpose. Page Four - Redevelopment Agency Minutes - October 28, 2002 Agencymember Yost said if this process takes place it will be long and involved, 'require public hearings with notification to the public in general and especially those most affected like the Trailer Park where there are people receiving rental assistance, etc. The Director confirmed that to go through a formal closeout of the Riverfront Redevelopment Project Area. there will be a number of public hearings that will need to be held, those hearings would be noticed to both owners and interested tenants of properties within the Project Area, therefore if the Agency determines to continue in this direction it may be well to hold a number of community workshops to explain some of the issues prior to that time, lay out some of the anticipated impacts, and in this case there are ways where this cost could be covered but it would take an obligation of the Council to obligate future General Fund monies to continue the rent subsidy obligations, thus there is a separate decision process that the staff can not determine. Councilman Yost said he just wants to make certain that the public understands that this is not something that would take place over night, it is a long process with a number of public hearings. Councilman. Doane made reference to one of the proposed resolutions which states that the Agency of the City of Seal Beach is accepting a loan from the City of Seal Beach, a loan meant to be repaid, and to that inquired about the process under which it would be repaid. The Director explained that the loan would be paid back at a five percent interest rate and based on the projections from the Finance Department it was determined that payments to the loan would go until year 2017. Councilman Antos mentioned that the report shows three properties to be appraised, asked if there is a legal reason to have an appraisal of the Police Department and City Yard, the City is not going to sell the Police Department or City Yard. The Director explained that staff is not in a position to make that determination, the understanding of the direction of the Agency was to seek appraisals of all Agency owned properties which includes the Police Department, Public Works Yard, and Animal Shelter properties, once those appraisals are seen then a determination can be made as to eliminating certain properties from consideration in the dissolution, that is obviously an Acency determination to -be made, yet until the potential valuations of those properties are known and the cost of what would have to be put into the bond debt early retirements it is not felt that those properties can be precluded until the numbers are .known. Agencymember Yost mentioned that should the Agency be dissolved then those properties would fall I outside the Agency or in some other entity therefore the value of those properties would need to be known so he would agree with that assessment. Aaencymember Antos said it is his understar_dinc that the City has already applied for a grant for the West End Pump Station, also that there is $3.2 million in Agency funds currently, therefore if there is $3.2 cash why is it necessary for the Agency to borrow money from the City that is not going to be paid back for fifteen years. The Executive Director explained that the West End Pump Station is bond proceeds Page Five - Redevelopment Agency Minutes - October 28, 2002 specifically for the Pump Station, in that scenario the Agency would be borrowing money from the Pump Station to • pay for the dissolution costs, as to the grant', it is for a portion of the west End Pump Station dealing with low flow diversions to the sanitary sewer during the summer months, it is not specifically for the pump station but a portion of the pump station. Agencymember Antos said he continues to believe that the Agency should be using cash from the • Agency for this dissolution effort as opposed to burdening the General Fund with a loan, by doing so possibly the cost can be kept down in that the report shows a range of costs and possibly there would be an impetus to not spend the entire amount, also, the Agency gets tax increment funds each year of about $1 million, therefore whatever is borrowed from the cash on hand can be paid back from the tax increment. The Director explained that the reason the staff report shows that the loan can not be paid back until 2017 is based on current debt retirement service for bonds • and the twenty percent required housing setaside, there will be no funds to pay anything back, the Agency is fully obligated until that point in time with existing debt and obligations. Chairman Campbell noted that the Agency receives approximately $1.38 million in tax increment and of that $750,000 is to service the existing debt which leaves about $88,000 per year in tax increment. She indicated her concern with lending money to an agency which increases its debt to dissolve the debt, concerned too with the amount of assistance for the Trailer Park from the General Fund, as well as the impact to the remainder of the City because there would be money taken from the General Fund that could be going for other citywide uses, there are roads that need to be paved, there is the possibility of losing police officers, it does not make sense. Chairman Campbell said she did not want to pursue this at a possible cost of $95,000, the City can not afford this, when she reviewed the report and the loss to the City of $20 million versus the $4 million that would be forthcoming if the Agency were dissolved, the City will lose. She stated that one of the reasons that cities have redevelopment agencies is to receive the tax increment, the Agency tax increment now and it is proposed to turn it over to the County, the Agency will be out $88,000 per year in tax increment over and above the monies needed to service the debt, for a City that is looking for money this makes no sense. Chairman Campbell said she could not support a loan because that will put the Agency more in debt in order to dissolve the Agency, in her opinion things should remain as they are, she has no problem with the Redevelopment Agency, it merely collects the tax increment, an example of use is the Pump Station, it and other projects are viable uses, there are a lot of unanswered questions, this money is going to have to be made up from the General Fund and the City does not have it, that in turn will cut into other areas of the community, she does not want to see this City lose, does not want to use reserves, those are there to meet emergencies, if something were to happen to the pier is an example, pointinc out that there are wants, needs, and emergencies. Chairman Campbell stated again_ that she could not support retention of the consultant services nor a loan 1 • Page Six - Redevelopment Agency Minutes - October 28, 2002 from the City to the Agency, the dissolution has been looked into and from what has been seen thus far it makes no sense. Agencymember Antos expressed his disagreement, to him the only thing the Agency is doing is collecting tax increment monies to pay off debts and bonds the Agency has incurred, there is basically only one project remaining which is the Pump Station, and assuming that is done what the Agency will be doing for the next ten to twenty years is paying off the principal of the bonds, about the same amount in interest. He said there are properties that exist that the Agency is buying or could own that could be sold to pay down the bonds, and irrespective of whether the County receives some tax money if the Agency is dissolved as well as the School District, there is always State law that is taking $75,000 or thereabout per year from redevelopment money which is in turn requiring the Agency to take more money from the tax increment to pay the School District, and there is no money going into the General Fund of the City, losing $150,000 to $200,000 at todays value out of the General Fund. Agencymember Antos stated that he would like to see the Agency use some of its existing money to complete the dissolution study without incurring more debt, at that point it will be known what can or can not be done or should or should not be done relative to the Redevelopment Agency. In a little more than_a year the lessee of the property at the Zoeter site will be able to come forth and say they want to buy the property, at that point there will be a large infusion of cash, what will be done with that money, what will the property be sold for, it is supposed to be sold for fair market value through appraisals, there is nothing the City /Agency can do to stop the sale in 2004 when the lessee has the option to buy, therefore his is that the Agency should use the funds it has at present, complete the appraisals and whatever else is necessary, have bond counsel determine when the bonds can be paid down without penalty, bring' that information back so that the Redevelopment Agency can determine what to do. Chairman Campbell offered that if the Zoeter property is sold that money could be used to pay off the bonds on that site, what is left over could be used to pay down other debts if there is such concern about the Police Department and Public Works Yard. She noted her continued concern with the statement about how much money the City would receive, if it were such a great deal all cities would be disbandoning their redevelopment agencies, but they are not, the fact is that the City gets more money from the tax increment than it would if the property were not in the Redevelopment Agency, the Agency receives about $1.38 million from the L---- properties in the Agency Area, if they were not in the Project Area the City would receive $169,000 per year. Agencymember•Antos countered that all of that money is going to pay debt service, to which Chairman Campbell corrected the statement, stating that it is 5750,000 that is going to pay debt service, the remainder of the money can use used for other projects, this money gives the ability to do some of these projects, if there was no tax increment there would never be any of the projects. Agencymember Antos said there is $700,000 plus to pay off Page Seven - Redevelopment Agency Minutes - October 28, 2002 for bonds, $200,000 into housing, and 575,000 for schools, there is not much left. Chairman Campbell disagreed with the numbers. Agencymember Yost noted that in Seal Beach the Redevelopment Agency has actually been beneficial, the greenbelt, Trailer Park, Public Works Yard, Police Station, the Mary Wilson Library would not have transpired without the RDA, on the other hand one only needs to look south to see what redevelopment agencies can bring forth, an RDA can be destructive, the people are dependent upon a majority City Council to keep it from reeking major havoc, an example is that there have been•attempts to put Main Street into a redevelopment zone, that has not been allowed to occur yet the Agency could be a major threat to the community of Seal Beach, therefore he can see making strides to disband the Agency on that basis, and he has no problem looking at that. Agencymember Yost said however that he also has concern with the affect that would have on the low to moderate income residents of the community, particularly the Trailer Park residents who are dependent upon the rent subsidy from the RDA, that is a major issue that must be considered in the process, the Pump Station has to be done as well, which is water quality and flood control, also, the State is planning to take more money from RDA's, there are bills pending, as mentioned, that will force agencies to put money into the schools, that will be the money that would otherwise be spent on the Pump Station or rent subsidy or other programs within the City or RDA. He said he would have no problem going forward • with the appraisals, but he felt that the staff report reflected costs somewhat on the high side that may have been meant to discourage members of the Agency from going forward. The Executive Director explained that it is important to have MIA appraisals, in reading the Zoeter agreement it can be seen that there needs to be a very good appraiser, it should also be noted that the span between appraisal proposals is quite large from $97,000 to $32,000. Agencymember Yost also questioned the accuracy of the $12,500 amount that could be the City cost for County • outside counsel •research, the Director noted that that cost is uncertain at this point, this is merely to establish an anticipated budget. Chairman Campbell again expressed her concerns with going forward with this matter, she is aware that it has been abused in other cities but that is not Seal Beach, she could not see this City doing that, everyone loves this City, no one is going to turn Main Street into what Huntington Beach did. Her concern too is the impact and cost to the overall Cicv and districts if the General Fund were to have to fund the obligations of the Agency, there is $88,000 tax increment per year that could be used for other things. There are some that have crusaded against redevelopment agencies for years, fear of • eminent domain, yet the State, County, and federal - government as well as the City all have the right of eminent domain, as does other agencies, the concerns expressed will not happen. Agencymember Yost offered that that may be true with this Council yet given the structure that gives a three vote majority the ability to do considerable destruction therefore if the Agency is left in place it could pose problems. Page Eight - Redevelopment Agency Minutes - October 28, 2002 Agencymember Yost moved to adopt proposed Resolution Number 02 -3 entitled "A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY O? SEAL BEACH AUTHORIZING A BUDGET AMENDMENT, NO. RDA03 -01), FOR CONSULTANT SERVICES IN PHASE II - DISSOLUTION OF REDEVELOPMENT AGENCY." By unanimous consent, full reading of Resolution Number 02 -3 was waived. Agencymember Antos moved a substitute motion, to proceed yet have the costs paid from Redevelopment Agency funds and if there is a need at some point the Agency could approach the City to borrow money from the Pump Station. Agencymember Yost stated he would not second the motion unless the Pump Station monies are removed from the motion, it is important that the Pump Station be done as it relates to water quality flood control. The Executive Director cautioned that he did not believe that the bond monies can be used for any purpose other than what they were intended, when the bonds were refinanced it was specified to be for capital improvements which included the Mary Wilson.Library and the West End Pump Station, it is not believed those monies can be used for the study. Chairman Campbell asked if there are sufficient Agency monies to cover the Pump Station and the $95,000 dissolution consultant study, in response the Executive Director stated again that all of the monies are committed to projects, yet the proposal is 1 to use bond proceeds for the study that was unintended. The City Attorney confirmed that the money from the refinance was earmarked for specific purposes and that is so stated in the bond document, concurred with the Executive Director that those funds could not be used, the Agency does get the tax increment every year however ERAP has tapped those monies, also there is money that is not part of the setaside that is going to the rental subsidies for the Trailer Park, it is believed that the maximum amount per year was $180,000. Mr. Jim Caviola, Seal Beach, with regard to the appraisal, • said the Zoeter parcel deal was done in 1996, so all that is needed is the appraisal of one piece of property, he provided an appraisal to give the Agency an idea, one appraisal does not cost $95,000, an MIA appraisal will cost about $10,000, it could actually be looked up on a •computer, an appraisal of just one parcel of property is all that is needed, and that has been done, there is no need to have people running around and spending more money. Mr. Caviola declared the Agency debt is obscene, Bridgeport, Riverbeach and the property tax for Zoeter does not go into the General Fund, the property tax of none of . those parcels goes to the General Fund to fix the roads in this community, he does not believe that those people realize that their taxes are going to pay a minimum payment on a debt, the Agency is a separate bank account where those monies can not be spent outside of the redevelopment area and that is at the expense of the General Fund, the initial report showed that the City is losinc a minimum of 5160,000 per year in the General Fund because of the Redevelopment Agency, the report also showed that the Agency would pail $5 million in interest, that is not going Page Nine - Redevelopment Agency Minutes - October 28, 2002 to fix the roads or pay police officers, educate children or subsidize rents. Again, the Zoeter site will be sold, that was the deal in 1996, so the Agency only has to do an appraisal on one parcel of property, and if the amount is sufficient the debt is paid, then get the pump. Mr. Caviola said during the budget workshops there was never a budget for the Redevelopment Agency mentioned, it gave the appearance of impropriety, and asked that henceforth the meetings of the Agency be cablecast, no one in the community knows that the meeting has gone on since 6:30 p.m. with discussion of a $95,000 loan from the General Fund to the Redevelopment Agency, yet the Agency and Council are the same people, the Agency is a monster, a credit card, a person buys the Trailer Park for $3 million then sues the Agency for not doing its job, the person is then given a $4.5 million profit, and Linc Housing ends up with the Park. 'Mr. Caviola concluded by saying one appraisal, one property, he gave it to the Agency for free, he analyzed the report and the appraisal together, there is no need to spend $95,000. Ms. Reva Olson, Seal Beach, said one of the main reasons she does not like redevelopment agencies is that real estate tax dollars are placed in the Agency, the public has no knowledge of that, the meetings are not televised, and clarified that it was the people who fought for the greenbelt, the Agency did the people no favors, the only thing the Agency has done is run up debt, it will be the taxpayers that will have to pay it back, it is known too that there are people in this City that do not care about the City, just taking the taxpayers dollars, it is up to the Agency and Council to take care of the taxpayers. Ms. Joyce Parque, 6th Street, mentioned that every year the Agency must put aside twenty percent of the tax_incremer_t money for low and moderate income, recalled having read the agendas for 1119 Ocean Avenue, for years nothing was done with the low and moderate income monies so • there was a fine imposed of $660,000 for doing nothing for low income, asked where the low income housing is going to go each year while there is a Redevelopment Agency, can it go on the tennis court site, at Boeing, the rumor is that • it may go in near Bridgport, that housing is not just for seniors it is for families. Ms. Parque claimed that an MIA appraiser can be negotiated with, anything in real estate is negotiable, announced to the realtors that the City is buying signs to place throughout the town so that realtors can not put their open house signs up. She recalled hearing that there was no rent subsidy until the purchase of the Trailer Park from Richard Hall, now the Agency is in the hole, also, when the pier went down the taxpayers raised the money to rebuild, same with the police substation, the pool, when the people of this town want to raise money they will do it, the Agency did not do those things, and concluded by asking that the people be informed as to where the low and moderate income housing is going. Mr. Doug Korthof, Seal Beach, expressed his opinion that the time for redevelopment agencies has come and gone, they do more harm than good, if they can be disbanded that is good, and suggested that Mr. Caviola be listened to with regard to the dollar amount for an appraisal. Ms. Karen Tarascio, Trailer Park, was critical of the Agency having Page Ten - Redevelopment:Agency Minutes - October 28, 2002 r . p aid $660,000 in penalties as a result of not having used the low and moderate income setaside monies in a timely manner. She stated that redevelopment agencies are meant to eliminate blight, and provided pictures of some of the household conditions in the Trailer Park that would certainly qualify as blight, the penalty monies could have been used to improve those living conditions. Chairman Campbell explained that it was not a matter of fixing up those homes, that is a different program, it was a matter of providing low to moderate income housing, what would qualify for a large amount of low /mod housing are the units in Leisure World, they would qualify dollar wise but the money can not be used because the law is written so that every time new housing is created so much low to mod also must be created, yet Leisure World housing is an existing stock, it is the bureaucratic rules that the City gets . caught up in, the penalty was paid because there was no place to spend.the money, it needed to be new housing, it could not be used to rehab. Ms. Torascio asked if it is not so that there is now a lesser number of low /moderate units in the Park. The Chair explained that initially it was one hundred twenty -five units, then the requirement was twenty percent of the one hundred twenty -five units, which meant that there only needed to be one hundred five low to moderate units, that was a requirement of the bonds. • It was pointed out that there was no second to either the primary motion or the substitute motions. Agencymember Yost restated his motion to adopt Resolution Number 02 -3. Agencymember Antos seconded the motion. AYES: Antos, Yost NOES: Campbell, Doane, Larson Motion failed Yost moved, second by Antos, to adopt Resolution Number 02- 4 entitled "A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH ACCEPTING A LOAN FROM THE CITY OF SEAL BEACH IN THE AMOUNT OF $95,000." By unanimous consent, full reading of Resolution Number 02 -4 was waived. AYES: Antos, Yost NOES: Campbell, Doane, Larson Motion failed MORTGAGE ASSISTANCE PROGRAM PROCEDURES The Director of Development Services presented the staff report, explained that these are the guidelines to implement the Mortgage Assistance Program that the Agency approved as part of the five year program for use of the housing setaside funds, a first time homebuyer program, there are the necessary agreements, forms, and grant deed documents to implement that program, the Agency previously approved similar documents for owner occupied rehabilitation loan and grant programs, the one program still to come is the renter assistance for rehab and replacement of units within the Trailer Park, as indicated in the staff report there are certain State law chances Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report February 28, 2005 ATTACHMENT 4 CITY COUNCIL MINUTES - OCTOBER 28, 2002 Dissolution of Agency, Phase II.RDA Staff Report 2 17 Seal Beach, California October 28, 2002 The City Council of the City of Seal Beach met in regular session at 8:10 p.m. with Mayor Larson calling the meeting to order with the Salute to the Flag. ROLL CALL Present: Mayor Larson Councilmembers Antos, Campbell, Doane, Yost Absent: None • Also present: Mr. Bahorski, City Manager Mr. Barrow, City Attorney Mr. Whittenberg, Director of Development Services Mr. Dancs, Director of Public Works /City Engineer Chief Sellers, Police Department Mr. Vukojevic, Deputy City Engineer Mr. Cummins, Associate Planner Ms. Yotsuya, Assistant City Manager Ms. Yeo, City Clerk APPROVAL OF AGENDA Councilman Yost requested that Item "L" be removed from the Consent Calendar for separate consideration, Councilman t Doane noted that Item "N ", the proposed Resolution relating to the loan to the Agency for consultant services, was removed from the agenda, and Mayor Larson requested that Item "K" be removed from the Consent Calendar. Yost moved, second by Antos, to approve the order of the agenda as revised. AYES: Antos, Campbell, Doane, Larson, Yost NOES: None Motion carried ANNOUNCEMENTS There were none. PRESENTATIONS There were none. PUBLIC COMMENTS Mayor Larson declared the Public Comment period to be open. Mr. Doug Korthof, Seal Beach, agreed with the Agency Chair that there is a misunderstanding regarding redevelopment and as other members of the Agency said there is a lot of trepidation and worry about things. Mr. Korthof said the Trailer Park is good, the person who tried to buy them out is bad, the problem was getting through all of the troubles, a redevelopment agency is somewhat like a mini - Mello Roos which is a bet on future revenues which in his opinion is wrong, that puts one at the mercy of government regulations, when one looks back at what happened in Long Beach and Huntington Beach it is far better, as has been FILE COPY AGENDA REPORT DATE: September 23, 2002 TO: Chairperson and Members of the Redevelopment Agency THRU: John B. Bahorski, Executive Director FROM: Lee Whittenberg, Director of Development Services SUBJECT: CONSIDERATION OF CONSULTANT REPORT — DISSOLUTION OF REDEVELOPMENT AGENCY • SUMMARY OF REQUEST: Consider report from Keyser Marston Associates, Inc., and Murphy & Davis LLP regarding "Analysis of Redevelopment Agency Dissolution ", and provide direction to staff or receive and file staff report. BACKGROUND: • On April 22, 2002, the Agency directed staff to request proposals for potential dissolution of the Redevelopment Agency. On May 28, 2002, the Agency retained Keyser Marston Associates, Inc., and Murphy & Davis LLP to provide the requested analysis. The analysis of Keyser Marston Associates, Inc., and Murphy & Davis LLP has been received by the City and is presented to the Agency for consideration. As indicated in the transmittal letter from Greg Soo -Hoo and C. Nichole Murphy, "The analysis does not make a recommendation to dissolve or to retain the Agency. Such a decision will have to be based upon the -Agency addressing the broader questions governing redevelopment activities in the City." The transmittal letter also indicates "The City Council was also interested in knowing whether or not the County of Orange would consider assuming the administrative oversight of the Agency's outstanding Tax Allocation Bonds 2000 Series A and B. Various conversations and a letter to the County Executive Office have yielded no official consensus or decision 017 the County Executive Officer's part to-date."' • The document includes an "Executive Summary ", • that highlights the following major areas of discussion within the full report: ❑ Introduction ❑ Surfside Project Area Obligations 1 Transmittal Letter re: Analysis of Redevelopment Agency Dissolution, prepared by Keyser Marston Associates, Inc., dated September 18, 2002 Agenda Item _It C:\My Documents \RDA \Dissolution of Agency Report.RDA Staff Report.doc \LW \09 -18 -02 L•I „ Consideration of Report — 44 •viRdienItial Dissolution of Redevelopment Agency Redevelopment Agency Staff Report September 23. 2002 ❑ Riverfront Project Area Obligations ❑ Tax Allocation Bonds 2000 Series A and B ❑ Mobile Home Park Revenue Bonds, Series 2000A ❑ Zoeter Place Promissory Note (Purchase of Zoeter "Parcel A ") ❑ Zoeter Daycare Facilities Lease /Purchase Payments (Zoeter "Parcels B and D " . ❑ City General Fund Loan ❑ Loan and Grant Agreement for Seal Beach Trailer Park ❑ Regulatory Agreements for Seal Beach Trailer Park ❑ Funding of Excess Surplus Penalties ❑ County Executive Office Conversations Greg Soo -Hoo and C. Nichole Murphy of Keyser Marston Associates, Inc., and Murphy & Davis LLP, respectively, will be present to provide an overview of the report findings and respond to questions of the Agencymembers. Impacts of Potential Agency Dissolution on Current City Projects: . If the Redevelopment Agency were to consider a dissolution process, the following current City projects should be halted immediately, as the funding for these projects is provided by the Agency funds: ❑ West End Pump Station Project: The West End Pump Station does not have capacity adequate for the current standards and it lacks proper controls. In early 2001, the City retained AKM Consulting Engineers to prepare a Preliminary Design Report (PDR) for construction of a new Pump Station to replace the existing. The PDR evaluated the hydrology of the drainage site among other things and found that the existing pumps are not of sufficient capacity to handle the standard 25 -year stone -flow criteria. Actually, according to the PDR, the existing pumps can handle only 71 percent of 5 -year stone flow. Therefore, the PDR recommended replacement of the existing station with a brand new station. Funds in the amount of 52,300,000 were budgeted in the City's Capital Improvement Program from the City's Redevelopment Agency. To date the City has expended 5150,000 for the engine repairs and station improvements including engineering and the Preliminary Design Report. A low flow diversion system, and reconditioning of the existing engine and existing pumps is anticipated to cost up to 5200,000. The remaining balance will fund the environmental review process, design, construction and inspection of the new pump station. This project is to be funded with Redevelopment Agency tax increment funds, and will not be able to proceed if this funding source is removed. If the City were to determine to proceed with the project, it would be necessary to allocate the necessary funds, currently estimated at approximately 52,300,000, from the undesignated fund Dissolution of Agency Report.RDA Staff Report 2 • • Consideration of Consultant Report — Potential Dissolution of Redevelopment Agency Redevelopment Agency Staf Report • September 23, 2002 balance of $4,819,793; resulting in a 47.7% reduction in the undesignated fund balance, leaving an undesignated fund balance of $2,519,793. ❑ City Yard Project: The Seal Beach Municipal Corporation Yard was built in the late 1960's. It consists mostly of concrete tilt -up offices, maintenance shops and �W equipment and material storage areas. In the 2001/2002 budget process, it was ` � identified as a needed project to bring the Corporation Yard into compliance with C C current National Pollution Discharge Elimination System (NPDES), storm water pollution prevention, and best management practices. This may include the construction or modification of stone drains, wash racks, material bins, transfer stations, pavement, and storage areas. Funds are available from the Redevelopment Agency in the Capital Improvement Program in Project No. 50057 from fiscal year 2001 /2002. The total project budget including design, inspection, administration, and construction is $350,000. This project is to be funded with Redevelopment Agency tax increment funds, and will not be able to proceed if this funding source is removed. If the City were to determine to proceed with the project, it would be necessary to allocate the necessary funds, currently estimated at approximately $350,000, from the undesignated fund balance of $4,819,793; resulting in a total reduction of approximately 55% (including the West End Pump Station project discussed. above) in the undesignated fund balance, leaving an undesignated fund balance of $2,169,793. ❑ Lease negotiations on Zoeter day care properties: This property would need to be considered for possible sale to generate revenues to offset the Agency debts that would be incurred by the City if the Agency dissolution proceeds. This would also result in the loss of lease revenues to the Agency from the current day care providers located on the property. If this potential sale. occurs, it is highly unlikely that the current day care providers could remain on the property, as the existing lease rates are far below a general market rate. This would result in the probable loss of long-term day care service providers within the community. ❑ Potential Sale of Zoeter Place: This property would need to be considered for possible sale to generate revenues to offset the Agency debts that would be incurred by the City if the Agency dissolution proceeds. This would also result in the loss of lease revenues to the Agency from the current master lease holder for the commercial uses located on the property. There is a "option to purchase" period available to the master lease holder between July 1, 2004 and December 31, 2004. At this time, it is uncertain as to the legal ramifications of a potential sale of Zoeter Place prior to the "option to purchase" period available to the master lease holder. ❑ Potential Sale of Police/Maintenance Yard /Animal Shelter Facility: This property would need to be considered for possible sale to generate revenues to offset the Dissolution of Agency Report.RDA Staff Report 3 • Consideration of Consultant Report — Potential Dissolution of Redevelopment Agency Redevelopment Agency Staff Report September 23, 2002 • Agency debts that would be incurred by the City if the Agency dissolution proceeds. This would also result in the loss of critical operating facilities of the City, i.e., the Police Department and jail facilities, the City maintenance yard facilities, and the Animal Shelter facilities. If these properties were to be sold, the costs of acquiring additional and somewhere within the City to locate these facilities, and to construct the new facilities would be costs to the City general fund. As discussed above, there would only be approximately $2,170,000 in the undesignated fund balance. It is uncertain, and highly unlikely, that the necessary property acquisitions and new construction of these facilities could be accomplished with that amount of funds. If it could be accomplished with that amount of money, the City would then have no undesignated fund reserves for emergency situations or unanticipated costs that might arise in the future. A sale of this public property would probably result in the elimination of an Animal Care Facility within the community, as the costs to rebuild a new facility is anticipated to be beyond the means of the support groups that currently operate and maintain this important facility. within the community. The above discussion regarding potential sales of Agency - owned properties and assets could possibly be different depending on whether the County responds to our inquiries. FISCAL IMPACT: The study indicates a forfeiture of $27 million of revenue to the Agency between now and Fiscal Year 2023 -2024. This loss of Agency revenue could also result in significant impacts to the City General Fund if the Agency were to be dissolved, in addition to the possible selling of current Agency -owned properties, as discussed above. This would occur as a result of the potential City assumption of various debts of the Agency as discussed in the "Executive Summary" and within the body of the full Keyser Marston Report. RECOMMENDATION: Consider report from Keyser Marston Associates, Inc., and Murphy & Davis LLP regarding "Analysis of Redevelopment Agency Dissolution ", and provide direction to staff or receive and file staff report. NO • N'. :'PROVED• • re Whittenberg John ' .: ahorski Director of Development Service ��utive Director Dissolution of Agency Repon.RDA Staff Report 4 Consideration of Consultant Report — Potential Dissolution of Redevelopment Agency Redevelopment Agency Staff Report September 23, 2002 Attachments: (2) Attachment 1: Letter, Executive Summary, and Report regarding "Analysis of Redevelopment Agency Dissolution ", Keyser Marston Associates, Inc. and Murphy & Davis LLP, dated September 18, 2002 Attachment 2: Redevelopment Agency Minutes, May 28, 2002 Dissolution of Agency Report.RDA Staff Report 5 Consideration of Consultant Report — Potential Dissolution of Redevelopment Agency Redevelopment Agency Staff Report September 23, 2002 ATTACHMENT 1 LETTER, EXECUTIVE SUMMARY, AND REPORT REGARDING "ANALYSIS OF REDEVELOPMENT AGENCY DISSOLUTION ", KEYSER MARSTON ASSOCIATES, INC. AND MURPHY & DAVIS LLP, DATED SEPTEMBER 18, 2002 • Dissolution of Agency Repon.RDA Staff Report 6 KEYS ER MARSTON ASSOCIATES INC. ADVISORS IN: REAL ESTATE 500 SOUTH GRAND AVENUE, SUITE 1480 REDEVELOPMENT Los ANGELES, CALIFORNIA 90071 AFFORDABLE HOUSING PHONE: 213/622 -8095 ECONOMIC DEVELOPMENT FAX: 213/622 -5204 FISCAL IMPACT INFRASTRUCTURE FINANCE VALUATION AND LITIGATION SUPPORT Los Angeles Calvin E. Hollis, 11 Kathleen H. Head James A. Rabe Paul C. Anderson September 18, 2002 Gregory D Soo -Hoo San Diego Gerald M. Trimble Paul C. Marra Mr. Lee Whittenberg SAN FRANCISCO A. Jerry Keyser Director of Development Services Timothy C. Kelly Kate Earle Funk City of Seal Beach Robert J. Wetmore City Hall - 211 Eighth Street Debbie M. Kern Seal Beach, California 90740 -6279 Re: Analysis of Redevelopment Agency Dissolution Dear Mr. Whittenberg: Keyser Marston Associates, Inc. and Murphy and Davis LLP have been retained by the City of Seal Beach to analyze the dissolution of the Redevelopment Agency. The intent of the analysis is to provide the City with an objective review of the legal parameters, set forth under the California Redevelopment Law, that must be satisfied before any such dissolution can occur, as well as a summary of the Agency's existing financial obligations that must be transferred over to the City if such a dissolution were to occur. This analysis does not make a recommendation to dissolve or to retain the Agency. Such a decision will have to be based upon the Agency addressing the broader questions governing redevelopment activities in the City. These questions may include the following: ❑ Has the Agency achieved the stated goals and objectives set forth in the Redevelopment Plans? o Are there additional redevelopment projects, programs or activities of benefit to the community that will not be realized if dissolution were to occur? ❑ Are there other alternate funding sources available for these activities? ❑ To what degree is the City General Fund willing and able to absorb the Agency's fiscal obligations in the future? 0209030.SB:GSH:gbd 19054.001.001 Mr. Lee Whittenburg September 18, 2002 City of Seal Beach Page 2 ❑ Has the Agency adopted a financing plan to fully satisfy all of its mandatory fiscal obligations imposed upon it? (e.g. excess surplus penalty, outstanding indebtedness and other legally binding contractual obligations). ❑ If the County Housing Authority was to assume oversight of the Agency's Housing Set Aside moneys, then to what degree is the City willing to give up its decision making ability in deciding where and how these Housing Funds will be spent within the City? The City Council was also interested in knowing whether or not the County of Orange would consider assuming the administrative oversight of the Agency's outstanding Tax Allocation Bonds 2000 Series A and B. Various conversations and a letter to the County Executive Office have yielded no official consensus or decision on the County Executive Officer's part to- date. Enclosed you will find an Executive Summary highlighting the key considerations discussed more fully in the attached analysis. Sincerely, KEYSER MARSTON ASSOCIATES, INC. MURPHY & DAVIS LLP Greg Soo -Hoo C. Nicole Murphy Principal Attorney at Law 0209030.5B:GSH:gbd 19054.001.001 Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report February 28, 2005 ATTACHMENT 5 REDEVELOPMENT AGENCY STAFF REPORT RE: "CONSIDERATION OF CONSULTANTS REPORT - DISSOL UTION OF REDEVELOPMENT AGENCY', SEPTEMBER 23, 2002 • • Dissolution of Agency, Phase II.RDA Staff Report 2 18 ANALYSIS OF REDEVELOPMENT AGENCY DISSOLUTION CITY OF SEAL BEACH September 18, 2002 EXECUTIVE SUMMARY I. INTRODUCTION Keyser Marston Associates, Inc. (KMA) and Murphy and Davis LLP (M &D) have been retained by the City of Seal Beach to analyze the potential dissolution of the Seal Beach Redevelopment Agency. Dissolution of the Agency would require the termination of the Redevelopment Plans for both the Riverfront and the Surfside Redevelopment Project Areas, i.e., by amending both Redevelopment Plans to shorten their duration. Pursuant to Health and Safety Code Section 33141, the City Council may, by ordinance, deactivate the Agency if the Agency has no outstanding bonded indebtedness, no other unpaid loans, indebtedness, or advances, and no legally binding contractual obligations with persons or entities other than the City, unless the City assumes the bonded indebtedness, unpaid loans, indebtedness, and advances, and legally binding contractual obligations. Under Section 33333.8, the Redevelopment Plans cannot be terminated if the Agency has not complied with its obligations pertaining to replacement housing (Section 33413(a)), inclusionary housing (Section 33413(b)), or excess surplus housing funds (Section 33334.12). II. SURFSIDE PROJECT AREA OBLIGATIONS A. The Redevelopment Plan of the presently inactive Surfside Redevelopment Project may formally be terminated at the City's discretion. B. Tax increment revenues are not allocated to the Agency from the Surfside Project. • C. The balance of funds in the Surfside Housing Fund could be transferred to the City or to the County Housing Authority for use as required by Section 33334.2. In either instance, the Redevelopment Law requires that these funds be spent on low and moderate income housing activities within the City. Executive Summary Keyser Marston Associates, Inc. City of Seal Beach Page 1 0209028.SB.GSH:gbd 19054 001.001/09/18/02 III. RIVERFRONT PROJECT AREA OBLIGATIONS A. The Riverfront Project Area generates gross tax increment revenues of approximately $1.1 million per year. Twenty percent is deposited into the Riverfront Housing Fund and the remaining balance is used to pay debt service on tax allocation bonds, administrative costs and other on -going redevelopment projects, programs and activities of the Project Area. B. The termination of the Riverfront Project Area would result in the Agency's forfeiture of $27 million in cumulative gross tax increment revenues projected through FY 2023 -24. 1) The affected taxing agency distribution of this $27 million gross revenue aggregation (based upon the 1% tax levy allocations) can be expressed as follows: School Districts $13,153,000 State (Educational Revenue Augmentation Fund) 5,045,000 County Taxing Entities 4,571,000 City 4,240,000 Total (Gross Tax Increment before debt repayment) $27,009,000 2) However, if the Agency were to be dissolved a portion of this cumulative revenue would likely be required to service outstanding indebtedness obligations of the Agency. .The exact amount would be dependent upon the amount of other alternate funding sources available (i.e. unspent bond proceeds and /or land sale proceeds). These obligations are summarized below. C. Tax Allocation Bonds 2000 Series A and B 1) Outstanding obligations total $8,795,000 in principal and $5,165,499 in interest payments (as of June 30, 2002) 2) If the Agency were to dissolve, the Agency would have to assign to the City it's right to receive tax increments for the purpose of paying the bonds. 1 FY 2023 -24 represents the last fiscal year in which the Agency is permitted to receive tax increment revenues to repay indebtedness of the Riverfront Project (the Riverfront Annexation Redevelopment Plan will terminate March 3, 2014 and tax increments may be allocated for an additional 10 years to repay debt until March 3, 2024). Executive Summary Keyser Marston Associates, Inc. City of Seal Beach Page 2 0209028.SB:GSH:gbd 19054.001.001/09/18/02 • 3) The bond debt may be repaid from a combination of accumulated tax increment revenues, unspent bond proceeds and land sale proceeds of Agency -owned real estate which would be deposited into a special debt retirement fund administered by a bond trustee. 4) Tax increment revenues could continue to be allocated up to 10 years after the Project Area dissolution (per Health and Safety Code Section 33333.6). 5) During the period in which tax increment revenues are annually received to meet debt service, 20% of the tax increment receipts will continue to be required to be deposited in the Housing Fund. 6) Unspent bond proceeds amount to approximately $3.3 million, although these proceeds are slated to be used to fund the West End Pump Station Replacement project and other capital improvements in the Project Area. If these proceeds are used to repay bonds and if no other funding sources from the City are available, these capital improvement projects will not be funded. 7) Land sale proceeds could be generated from the sale of Zoeter Place, the Police /Maintenance Yard /Animal Center Facility and proceeds from the purchase and sale of Zoeter Daycare Facilities (assuming the value exceeds the purchase price balance and requiring Agency or City option exercise). 8) It will be necessary to retain legal bond counsel to opine on matters pertaining to early redemption and retirement of the bonds and arbitrage issues if the City pursues an Agency dissolution. . . D. Mobile Home Park Revenue Bonds, Series 2000A 1) The Revenue Bonds are secured by revenues from the Seal Beach Trailer Park. 1 FY 2023 -24 represents the last fiscal year in which the Agency is permitted to receive tax increment revenues to repay indebtedness of the Riverfront Project (the Riverfront Annexation Redevelopment Plan will terminate March 3, 2014 and tax increments may be allocated for an additional 10 years to repay debt until March 3, 2024). Executive Summary Keyser Marston Associates, Inc. City of Seal Beach Page 3 0209028.SB:GSH:gbd 19054.001.001/09 /18/02 E. Zoeter Place Promissory Note (Purchase of Zoeter "Parcel A ") 1) Repayment of the Note relies upon lease payments made on the property. If the Agency were to dissolve, the City would have to assume the Agency's liability in the event of a shortfall between lease income and debt service. 2) The outstanding principal totals $763,350 and outstanding interest totals $245,191, for a combined total of $1,008,541. 3) The lessee may exercise its purchase option to acquire the property, commencing from July 1, 2004 to December 31, 2004. The purchase price shall be the greater of either fair market value or the then - unpaid principal balance of the Note, whichever is greater. The balance of the outstanding principal on the Note could then be repaid from the land sale proceeds. 4) If the property is acquired by the lessee, the Agency or City would forfeit $5,864,000 in future lease payments (i.e. the sum of payments between FY 2004 -05 through FY 2023 -24). 'F. Zoeter Daycare Facilities Lease /Purchase Payments (Zoeter "Parcels B and D ") 1) If the Agency were to dissolve, the City General Fund would have to re- assume the lease /purchase obligation of the lease of the site from the Los Alamitos Unified School District. 2) The amount of base rent payable to the School District totals $988,000 and additional interest totals $473,693, for a combined total of $1,461,693. The annual payments required through FY 2011 -12 are approximately $146,000 per year. 3) Alternatively, the Agency could exercise a purchase option, pay the purchase price and the lease would terminate. The property could then be sold by the Agency. The purchase price would be $1,590,000 Tess all amounts paid as Base Rent through the closing date. As of June 30, 2001, the purchase price obligation would have been $1,052,000. 2 Third Amendment to the Master Lease entered into between the Agency and the Karl and Tina Rodi Family Trust.. Executive Summary Keyser Marston Associates, Inc. City of Seal Beach Page 4 0209028.SB:GSH:gbd 19054.001.001/09/18/02 G. City General Fund Loan 1) The Agency owes to the City General Fund to -date approximately $363,238 in principal and interest from a loan incurred July 1, 1993 for administrative services rendered by the City for the Agency. 2) If the Agency dissolves or if the City forgives this debt, the impact to the City General Fund will be $363,238. H. Loan and Grant Agreement for Seal Beach Trailer Park ,L 1) Agency annually provides a grant for rental assistance to the Seal Beach Trailer Park for a period of 20 years, to a maximum of $180,000 per year (a total commitment of $3.6 million). 2) If the City were to assume this obligation, the impact to the City General Fund would be a maximum $180,000 per year through the term of the obligation. _ 3) Repayment of a $1 million Housing Fund loan to LINC will be repaid over 30 years. As this loan is repaid, the payments received will be deposited into the Housing Fund and must be used for low and moderate income housing purposes within the City. 4) Repayment of a $1 million Housing Fund "bridge" loan to LINC will be repaid from a matching State loan or from residual receipts to be collected over a 30 -year period. As this bridge loan is repaid, the payments received will be deposited into the Housing Fund and must be used for low and moderate income housing purposes within the City. Regulatory Agreements for Seal Beach Trailer Park 1) The Agency has continuing non - monetary obligations under two (2) Regulatory Agreements applicable to the Seal Beach Trailer Park for a period of 30 years, one in connection with the Revenue Bonds and one in connection with the Loan and Grant Agreement. 2) These obligations can be assumed by the City. Executive Summary Keyser Marston Associates, Inc. City of Seal Beach Page 5 0209028.SB:GSH:gbd 19054.001.001/09/18/02 IV. FUNDING OF EXCESS SURPLUS PENALTIES A. The Agency has been penalized $668,000 for having an excess surplus in its Housing Fund as of June 2001. B. As additional monies are deposited into the Housing Fund (receipt of tax increment, Housing Fund loan repayments), future excess surplus penalties may be imposed if the excess surplus is not expended on low and moderate income housing uses in the City. C. Housing set aside monies cannot be used to fund the excess surplus penalty. The penalty must be paid from non - housing revenues. D. The excess surplus penalty will be paid from net tax increment revenues on a pay -as- you -go basis (i.e., net of the 20% housing set - aside, bond debt service and Agency administration). E. This liability would extend to the City General Fund if the City were to assume the Agency's obligations under an Agency dissolution. F. Once the excess surplus and excess surplus penalty are adequately funded, any remaining balance in the Housing Fund could be transferred to the City or to the County Housing Authority for use within the City as required by Section 33334.2. V. COUNTY EXECUTIVE OFFICE CONVERSATIONS A. The Executive Office of the County of Orange has been asked to consider whether the County would be willing and able to assume responsibility for payment of annual debt service on the Agency's Tax Allocation Bonds, 2000 Series A and B. B. No decision or response have been received as of this date. C. Housing set aside monies transferred to the County Housing Authority are required to be expended within the City per the requirements set forth in the Redevelopment Law. Executive Summary Keyser Marston Associates, Inc. City of Seal Beach Page 6 0209028.SB 19054.001.001/09/18/02 ANALYSIS OF REDEVELOPMENT AGENCY DISSOLUTION SEAL BEACH REDEVELOPMENT AGENCY Prepared for the CITY OF SEAL BEACH 211 Eighth Street Seal Beach, California 90740 Prepared by: Keyser Marston Associates, Inc. 500 South Grand Avenue, Suite 1480 Los Angeles, California 90071 And Murphy & Davis, LLP 300 Capitol Mall, Suite 1110 Sacramento, California 95814 September 18, 2002 Analysis of Redevelopment Agency Dissolution City of Seal Beach Table of Contents I. OVERVIEW 1 II. TAX INCREMENT REVENUE PROJECTION (TASK 1) 3 III. AGENCY OBLIGATIONS AND FUNDING OPTIONS (TASKS 2, 3 AND 4) 4 1. TAX ALLOCATION REFUNDING BONDS, 2000 SERIES A SUBORDINATE TAX ALLOCATION BONDS, 2000 SERIES B 5 2. MOBILE HOME PARK REVENUE BONDS, SERIES 2000A 6 3. ZOETER PLACE PROMISSORY NOTE (PURCHASE OF PARCEL A) 6 4. LEASE OF ZOETER PLACE 7 5. ZOETER DAYCARE FACILITIES LEASE /PURCHASE (PARCELS B AND D) 8 6. CITY GENERAL FUND LOAN 8 7. LOAN AND GRANT AGREEMENT FOR SEAL BEACH TRAILER PARK 9 8. REGULATORY AGREEMENTS FOR SEAL BEACH TRAILER PARK 10 IV. FUNDING OF EXCESS SURPLUS PENALTIES (TASK 5) 10 V. OTHER HOUSING REQUIREMENTS 11 1. REPLACEMENT HOUSING 11 2. INCLUSIONARY HOUSING 11 VI. DISPOSITION OF AGENCY OWNED PROPERTIES (TASK 6) 11 1. ZOETER PLACE 11 2. POLICE MAINTENANCE YARD FACILITY 11 VII. COUNTY EXECUTIVE OFFICE CONVERSATIONS 12 • Analysis of Redevelopment Agency Dissolution Keyser Marston Associates, Inc. City of Seal Beath Page i 0209027.SB:GSH:gbd 19054.001.001/09/18/02 Analysis of Redevelopment Agency Dissolution City of Seal Beach September 18, 2002 I. OVERVIEW Keyser Marston Associates, Inc. (KMA) and Murphy and Davis LLP (M&D) have been retained by the City of Seal Beach to analyze the potential dissolution of the Seal Beach Redevelopment Agency. The Agency was established in 1967 and has been vested with the responsibility for carrying out redevelopment in two adopted redevelopment project areas — Riverfront and Surfside. The Redevelopment Plan for the Riverfront Redevelopment Project was adopted in 1969 and territory was added to that Project in 1975. The Redevelopment Plan for the Surfside Redevelopment Project was adopted in 1982; that Project is currently inactive. Dissolution of the Agency would require the termination of both Redevelopment Plans, i.e., by amending both Redevelopment Plans to shorten their duration. Pursuant to Health and Safety Code Section 33141, the City Council of the City of Seal Beach may, by ordinance, deactivate the Seal Beach Redevelopment Agency (the "Agency ") if the Agency has no outstanding bonded indebtedness, no other unpaid loans, indebtedness, or advances, and no legally binding contractual obligations with persons or entities other than the City, unless the City assumes the bonded indebtedness, unpaid loans, indebtedness, and advances, and legally binding contractual obligations. Under Section 33333.8, the Redevelopment Plans cannot be terminated if the Agency has not complied with its obligations pertaining to replacement housing (Section 33413(a)), inclusionary housing (Section 33413(b)), or excess surplus housing funds (Section 33334.12). A. The currently inactive Surfside Redevelopment Project may be formally terminated now. The balance of funds in the Surfside Low /Moderate Income Housing Funds could be transferred to the City or to the County Housing Authority for use as required by Section 33334.2. In either instance, the Redevelopment Law requires that these funds be spent on low and moderate income housing activities within the City. B. The Riverfront Project cannot be terminated unless and until amounts sufficient to pay the 2000 Series A and Series B Tax Allocation Bonds when due can be deposited and combined with tax increments payable for the next 10 years after dissolution (per Health and Safety Code Section 33333.6). During this period in which annual tax increment revenues are collected to meet debt service, 20% of the tax increment allocations received will be required to be deposited in the 'All references are to the Health and Safety Code unless otherwise specified. 2 Excerpt from a letter dated August 2, 2002 from M &D. Analysis of Redevelopment Agency Dissolution Keyser Marston Associates, Inc. City of Seal Beach Page 1 0209027.SB:GSH:gbd 19054.001.001/09/18/02 Housing Fund. As of June 30, 2002, $8,795,000 in principal and $5,165,499 in interest payments remain outstanding on the 2000 Bonds. C. Outstanding Agency tax allocation bonds and other debt obligations that could not be serviced from unspent bond proceeds or uncommitted cash balances of the Agency, would have to be serviced from land sale proceeds. These may include the sale of the properties owned by the Agency (Zoeter Place and the Police /Maintenance Yard /Animal Center Facility) and proceeds from the purchase and sale of Zoeter Daycare Facilities (assuming the value exceeds the purchase price balance and requiring Agency or City option exercise). D. The Riverfront Project cannot be terminated unless and until the issue regarding excess surplus funds and the $668,000 penalty is resolved. If the penalty amount is adequately funded from net tax increment revenues (i.e. net of the 20% housing set aside, debt service payments and Agency administrative costs), as is the current plan per Agency staff, and all existing excess surplus is expended or encumbered, then any balance in the Riverfront Low and Moderate Income Housing Fund could be transferred to the City or to the County Housing Authority for use as required by Section 33334.2. Housing set aside monies cannot be used to fund the $668,000 penalty and would become a liability of the City General Fund under an Agency dissolution. Any excess surplus Housing funds would also have to be spent in the City. The following tasks outlined below were conducted by KMA and M&D, to determine what would be required to allow such a termination to occur: 1. Prepare a Tax Increment Revenue Projection Based upon a review of the Redevelopment Plan, the Implementation Plan and the Agency's audited financial statement, a projection of the potential tax increment revenue "loss" that would be re- allocated to the affected taxing entities was determined under a dissolution scenario. 2. Identify Outstanding Agency Obligations A review of existing Agency obligations and contracts was conducted, including a review of bonded indebtedness obligations and repayments of other Agency - identified financing mechanisms incurred by the Agency. • 2 Excerpt from a letter dated August 2, 2002 from M&D. Analysis of Redevelopment Agency Dissolution Keyser Marston Associates, Inc. City of Seal Beach Page 2 0209027.SB:GSH:gbd 19054.001.001/09/18/02 3. Identify How the Outstanding Agency Obligations will be Funded A determination of the fiscal requirements to fund outstanding Agency obligations was prepared so as to estimate the amount of monies that would be required from existing Agency and /or City resources. 4. Describe How the Unspent Bond Proceeds can be Spent M &D will review bond resolutions and provide a description of limitations imposed upon the $3.3 million in unspent tax - exempt net bond proceeds currently on deposit with the Agency. Note that further research with legal bond counsel will be required to review potential arbitrage issues if bond proceeds are held in reserve beyond the allowable time period under an Agency dissolution. 5. Describe How Existing Housing Penalties can be Funded City staff has indicated that there is a $668,000 affordable housing penalty imposed upon the Agency. KMA & M &D will state how this obligation will need to be funded from existing Agency and/or City resources. .6. Disposition of Existing Agency -Owned Properties M &D will state what will be required to dispose of existing Agency -owned properties if the Projects are terminated and the Agency is dissolved. Specific properties will be provided by City staff. • II. TAX INCREMENT REVENUE PROJECTION (Task 1) Property tax revenues in excess of the amount resulting from the valuation shown on the assessment roll for the base year of each Project Area is referred to as tax increment. The base year for the Project Area represents the fiscal year in which taxable property was last equalized prior to the effective date of the ordinance approving the Project Area's Redevelopment Plan. Under an immediate dissolution scenario summarized on Appendix Table 1.1, the cumulative amount of future tax increment revenues the Agency would forfeit amounts to approximately $27 million if the dissolution were to occur immediately. • 3 This projected amount is gross tax increment and does not reflect existing Agency obligations for repayment of outstanding debt. Analysis of Redevelopment Agency Dissolution Keyser Marston Associates, Inc. City of Seal Beach Page 3 0209027.SB:GSH:gbd 19054.001.001/09/18/02 The projection of tax increment revenue for the Riverfront Project Area (as shown on Appendix Table 1.2) is based upon the FY 2001 -02 assessed values reported by the Orange County Auditor - Controller. The application of a 2% inflationary increase to Real Property (i.e. land and improvement) values results in a relatively conservative estimate of future tax increment revenues up to the existing time limitations allowed under the California Redevelopment Law. The affected taxing agency distribution of this $27 million gross revenue forfeiture (based upon the 1% tax levy allocations) can be expressed as follows: Re- Distribution of Future Tax Increment % of Taxing Entity (cumulative to FY 2023 -24) Total City of Seal Beach $4,240,000 16% County of Orange 1,724,000 6% County Library 466,000 2% County Flood Control District 553,000 2% County Beaches, Harbors & Parks 428,000 2% County Vector Control . _ 31,000 0.1% County Sanitation 1,043,000 4% County Water 248,000 1 County Transit Authority 78,000 0.3% • Los Alamitos Unified School Dist 9,520,000 35% Coast Community College Dist 2,696,000 10% County Education 937,000 3% Education Revenue Augmentation Fund 5,045,000 19% Projected Total Forfeited Tax Increment $27,009,000 100% It is important to note that under a dissolution scenario, a portion of this cumulative revenue would likely be required to service outstanding indebtedness obligations of the Agency. The exact amount would be dependent upon the amount of other alternate funding sources available (i.e. unspent bond proceeds and /or land sale proceeds). III. AGENCY OBLIGATIONS AND FUNDING OPTIONS (Tasks 2, 3 and 4) The following represents a listing of the outstanding obligations the Agency is responsible for funding from tax increment revenues and the potential funding options, if any, available if the Agency is dissolved. The listing was the result of M &D's and KMA's review of Agency finance documents and consultation with bond counsel for the Tax Allocation Bonds. A complete review as prepared in a draft letter by M &D is attached as Appendix Letter A. 4 The Agency has elected to no longer receive tax_increment revenues from the Surfside Project Area. Therefore, no revenue projection was prepared for Surfside. Analysis of Redevelopment Agency Dissolution Keyser Marston Associates, Inc. City of Seal Beach Page 4 0209027.SB:GSH:gbd 19054.001.001/09/18/02 1. Tax Allocation Refunding Bonds, 2000 Series A Subordinate Tax Allocation Bonds, 2000 Series B Background: On December 20, 2000, the Agency issued the Series A and Series B Bonds secured by tax increment revenues generated by the Riverfront Project. The Agency used the proceeds of the Series A Bonds to purchase U.S. Government Securities in order to defease the 1986 Tax Allocation Bonds ($1,380,000) and the 1991 Tax Allocation Bonds ($3,715,000). The Series A Bonds have a maturity date through FY 2023 -24. The Agency used the proceeds of the Series B Bonds to finance various redevelopment activities of the Agency. The Series B Bonds have a maturity date through FY 2018 -19. At the present time, there are approximately $3.3 million in unspent bond proceeds, largely budgeted to be spent on the West End Pump Station Replacement and, to a lesser degree, to other capital improvement projects in the Project Area. Outstanding Obligation: $12,912,867 (Series A) + $1,047,632 (Series B) -- Based upon the Agency's financial statement as of June 30, 2001, and commencing with FY 2002- 03, the amount of Series A principal and interest outstanding is $12,912,866 and the amount of Series B principal and interest outstanding is $1,047,633 (see Appendix Tables 2 and 3). Funding Options: The bonds mature as late as FY 2023 -24, but can only be redeemed as early as 2004 (Series B Term Bonds) and 2008 (Series A Term Bonds). An early termination of the Riverfront Redevelopment Plan (say in 2003) would mean that tax increment revenues could continue to be received for an additional 10 years thereafter (say 2013) to meet debt service (as permitted under Health and Safety Code Section 33333.6). This is not long enough to pay debt service as required by the bonds. Under this scenario, over the 10- year period the Agency would have to assign to the City it's right to receive tax increments through 2013 for the purpose of paying the bonds. The County would then continue to allocate the maximum amount of tax increment revenues each year and these amounts would accumulate in a special debt retirement fund administered by a bond trustee (as was done with the 2000 Series A bond proceeds which were used to purchase U. S. Government securities and deposited with the Bond Trustee to defease the 1986 and 1991 Bonds). Twenty percent of these allocations would continue to be required for deposit into the Housing Fund. Analysis of Redevelopment Agency Dissolution Keyser Marston Associates, Inc. City of Seal Beach Page 5 0209027.SB:GSH:gbd 19054.001.001/09/18/02 In addition, if the Agency had sufficient revenue from other sources, such as unspent bond proceeds and land sale proceeds, which, when combined with the tax increment allocations made through 2013, was sufficient to assure payment of the bonds as required, it could be conceivable to have these additional funds deposited with the Bond Trustee. The $3.3 million in unspent bond proceeds could be an additional funding source for the deposit with a Bond Trustee. In doing so, however, the City and Agency would then have to abandon its plans for the funding of the pump station replacement project and any other capital improvement projects under consideration. Without such deposits being made with a Bond Trustee, the Riverfront Project Area • cannot be terminated and the Agency cannot be dissolved. The City is not permitted, under the Bond indentures, to pledge any other on -going alternative revenue streams it receives as an in -lieu funding source of tax increment to retire these bonds. If the Agency pursues dissolution, it will be necessary to retain legal bond counsel to further opine on any early redemption and retirement matters and other arbitrage issues. 2. Mobile Home Park Revenue Bonds, Series 2000A Background: These bonds are secured by the revenues from the Seal Beach Trailer Park, and all of the Agency's rights in and to those revenues have been assigned to the Bond Trustee. The Agency has certain continuing non - monetary rights and obligations under the bonds which could be assigned to the City. The Agency does not have any fiduciary responsibilities. Outstanding Obligation: The Agency has no outstanding fiscal obligation. Funding Options: Not Applicable - 3. . Zoeter Place Promissory Note (Purchase of Parcel A) Background: On September 1, 1987, the Agency executed a promissory note in favor of the Los Alamitos School District for the purchase of "Parcel A" or more commonly referred to as Zoeter Place. After a down payment of $76,334, the principal amount of the note was $1,832,052.60. The note is payable in annual installment of $76,334 plus interest at an annual rate to be determined from the average daily interest rate earned by funds in the General Fund of the Orange County Treasurer for the preceding calendar year, but shall not be less than 5.84 %. Analysis of Redevelopment Agency Dissolution Keyser Marston Associates, Inc. City of Seal Beach Page 6 0209027.SB:GSH:gbd 19054.001.001/09/18/02 Outstanding Obligation: $1,008,541 -- Based upon the Agency's financial statement as of June 30, 2001, and commencing with FY 2002 -03, the projected amount of principal outstanding totals $763,350 and interest outstanding totals $245,191, for a combined total of $1,008,541. The annual payments through FY 2011 -12 range from $80,792 to $120,914 (as shown on Appendix 5). Funding Options: The note is paid from lease payments made under the terms of the Third Amendment to the Master Lease entered into between the Agency and the Karl and Tina Rodi Family Trust (see Appendix Table 4). Projected lease payments could amount to $6,288,365 over the remaining 35 -year term of the Third Amendment. Section 5 of the Third Amendment to the Master Lease provides for a purchase option, commencing from July 1, 2004 to December 31, 2004, enabling the lessee to exercise it's option to acquire the parcel at fair_market value or the then - unpaid principal balance of the Promissory Note, whichever is greater. The balance of the outstanding principal could then be repaid with available land sale proceeds. However, if the lessee were to exercise its purchase option, the Agency would forfeit $5,864,000 in future lease income commencing from FY 2004 -05 through FY 2023 -24 (see Appendix 4). 4. Lease of Zoeter Place Background: The Agency entered into a Master Lease for Parcel A (Zoeter Place) on November 30, 1987. That Master Lease was subsequently amended, the latest of which was the Third Amendment to Master Lease, dated March 28, 1996, between the Agency and Trust "A" of the Karl and Tina Rodi Family Trust (Tenant). Projected rental income could amount to $6,288,365 over the remaining 35 -year term of the Third Amendment (as shown on Appendix Table 4). Section 5 of the Third Ame.ndment to the Master Lease also provides for a purchase option, commencing from July 1, 2004 to December 31, 2004, enabling the lessee to exercise it's option to acquire the parcel at fair market value or the then - unpaid principal balance of the Promissory Note, whichever is greater. The balance of the outstanding principal could then be repaid with available land sale proceeds. As stated in the previous section, if the lessee were to exercise its purchase option, the Agency would forfeit $5,864,000 in future lease income commencing from FY 2004 -05 through FY 2023 -24. Analysis of Redevelopment Agency Dissolution Keyser Marston Associates, Inc. City of Seal Beach Page 7 0209027.SB:GSH.gbd 19054.001.001/09/18/02 5. Zoeter Daycare Facilities Lease /Purchase (Parcels B and D) Background: The City of Seal Beach entered into a Lease with the Los Alamitos Unified School District on January 1, 1987, leasing "Parcels B and D ", more commonly referred to as the Zoeter Daycare Facilities. The lease provided for a purchase option to be exercised at any time during the term of the lease (the lease expires December 31, 2011). The purchase price for Parcels B and D would be $1,590,000 Tess all amounts paid as Base Rent through the closing date. As of June 30, 2001, the purchase price obligation would have been $1,052,000. The Agency's audited financial statements as of June 30, 2001, indicate that the City's rights and obligations under the Lease were assigned to the Agency 5 commencing with the twelfth year's payment. The lease /purchase payments are made in annual installments comprising a base rental payment plus inflationary interest. Outstanding Obligation: $1,461,693 -- Based upon the annual base rental payment schedule plus an assumed inflationary interest payment assumed at 7.84 %, the amount of remaining base rent due and payable to the School District as of July 1, 2002 totals $988,000 and the additional interest totals $473,693, for a combined total of $1,461,693. The annual payments through FY 2011 -12 are approximately $146,000 per year (as shown on Appendix 6). Funding Options: The lease /purchase payments on behalf of the City's obligation may be paid from any and all funds legally available to the Agency (e.g. tax increment revenue, land sale proceeds). The City may also elect to re- assume responsibility for making future lease /purchase payments (such an assignment would require the School District's consent). Alternatively, the Agency could exercise the purchase option, pay the purchase price and the lease would terminate. The property could then be sold by the Agency. 6. City General Fund Loan Background: Commencing on July 1, 1993, the Agency received a loan from the City in an amount totaling $215,000 for administrative services rendered by the City for the Agency. The loan bears an interest rate of 6% per year. 5 Other than what has been noted in the Agency's financial audit, Ivl &D and KMA have not received or reviewed other information or documents evidencing such assignment between the City and Agency or the School District's consent to the same. • Analysis of Redevelopment Agency Dissolution Keyser Marston Associates, Inc. City of Seal Beach Page 8 0209027.SB:GSH:gbd 19054.001.001/09/18/02 Outstanding Obligation: $363,238 -- based upon an assumed compounded interest rate of 6 %, the amount of principal and interest due and payable to the City as of July 1, 2002 is calculated to be $363,238 (refer to Appendix 7). Funding Options: The loan may be repaid from any and all funds legally available to the Agency (e.g. tax increment revenue, land sale proceeds) or the City may elect to forgive this outstanding debt. If the Agency does not have any funds available to repay this debt and /or the City forgives this debt, the impact to the City General Fund will be $363,238. 7. Loan and Grant Agreement for Seal Beach Trailer Park Background: This Agreement obligates the Agency to make continuing grants of funds for rental assistance to the Seal Beach Trailer Park. The amounts committed for rental assistance are a maximum of $180,000 per year for 20 years after the recording of the loan. This obligation could be assumed by the City, but the impact to the City General Fund would be a maximum of $180,000 per year through the term of the obligation. In connection with the acquisition and rehabilitation of the Seal Beach Trailer Park, the Agency made a $1,000,000 loan to LINC to be repaid over a 30 -year period from residual receipts from the Trailer Park (i.e., Net Operating Revenues Tess required debt service on the Revenue Bond Loan of $6,750,000 and the State Loan of $1,000,000). This loan was made from the Agency's Riverfront Low and Moderate Income Housing Fund, and funds repaid will therefore retain their character as housing funds that must be used in accordance with Section 33334.2. Also in connection with the Seal Beach Trailer Park project, the Agency made a $1,000,000 bridge loan to LINC to be repaid either from the proceeds of a $1,000,000 State Loan or from residual receipts over a 30 -year period. As of June 30, 2001, LINC had been approved to receive the $1,000,000 State Loan, and it is assumed that all or a majority of the Agency's bridge loan has since been repaid. To the extent that all of a part of the bridge loan was made from the Riverfront Low and Moderate Income Housing Fund, the repayment was required to be deposited back into the Housing Fund for future use in accordance with Section 33334.2. Analysis of Redevelopment Agency Dissolution Keyser Marston Associates, Inc. City of Seal Beach Page 9 - 0209027.SB•GSH:gbd 19054.001.001/09/18/02 8. Regulatory Agreements for Seal Beach Trailer Park Background: Two Regulatory Agreements applicable to the Seal Beach Trailer Park were entered into by the Agency, one in connection with the Revenue Bonds and one in connection with the Loan and Grant Agreement. The Agency has continuing non - monetary obligations under these Regulatory Agreements for a period of 30 years; however, those obligations could be assumed by the City. (In fact, the Regulatory Agreement pursuant to the Loan and Grant Agreement specifically contemplates enforcement by the City if the Agency is terminated or dissolved — Section 6.4 thereof.) These obligations pertain to the monitoring of the management and occupancy of the trailer park and enforcement of the borrower's obligations under these agreements. IV. FUNDING OF EXCESS SURPLUS PENALTIES (Task 5) Health and Safety Code Section 33334.12 requires that redevelopment agencies expend or encumber the amount in the Low and Moderate Income Housing Fund that exceeds the greater of $1 million or the aggregate amount deposited into the Housing Fund during the Agency's preceding four (4) fiscal years. If the Agency, after three (3) years have elapsed from the date that the moneys became excess surplus, has not expended or encumbered. the excess surplus, the Agency shall also be required to pay an excess surplus penalty. The excess surplus penalty is equal to 50% of the amount of the excess surplus that remains at the end of the three -year period. The penalty may not be funded from the 20% set aside, but must be used for low and moderate income housing purposes. The Agency has been penalized an excess surplus penalty in the amount of $668,000 as the result of excess surplus over three years old in the Housing Fund on June 30, 2001. According to Agency finance staff, it is anticipated that the excess surplus penalty will be paid from net tax increment revenues on a pay -as- you -go basis (Le., net of the 20% housing set - aside, bond debt service and Agency administration). The Agency will also be required to expend or to encumber the excess surplus within the three year time requirement. The Surfside Project Housing Fund has a balance of $176,844 and no excess surplus exists. Consequently, the Riverfront Project cannot be terminated until the excess surplus in the Housing Fund and the excess surplus penalty are expended or encumbered as required by Redevelopment Law. However, as additional monies are deposited into the Housing Fund (as a result of continued receipt of tax increment revenues or Housing Fund loan repayments), future excess surplus penalties may be imposed if the excess surplus is not expended on low and moderate income housing uses in the City. Funding of future excess surplus penalties will have to come from non - housing funds of the Agency or City as a result. Analysis of Redevelopment Agency Dissolution Keyser Marston Associates, Inc. City of Seal Beach Page 10 . 0209027.SB:GSH:gbd 19054.001.001/09/18/02 • V. OTHER HOUSING REQUIREMENTS 1. Replacement Housing This obligation requires that the Agency replace, on a one - for -one basis, low and moderate income dwelling units destroyed or removed from the Project Areas. Because the Riverfront Project was adopted prior to 1976, this requirement became applicable only as to dwelling units destroyed or removed from the Project Area on or after January 1, 1996. According to the Agency's Implementation Plan for 2000 -2005, no housing unit has been destroyed or removed from the Riverfront or Surfside Project Areas. Consequently, this requirement is satisfied for both Project Areas. • 2. Inclusionary Housing This obligation requires that certain percentages of housing newly constructed or substantially rehabilitated by the Agency or within the Project Areas by others be restricted for occupancy by low and moderate income households. It is applicable only to project areas adopted or areas added to an existing project area on or after January 1, 1976. The original Riverfront Project Area was adopted in 1969 and territory was added in 1975. Consequently, this requirement is not applicable to the Riverfront Project. According to the Agency's Implementation Plan for 2000 -2005, only limited residential construction has occurred in the Surfside Project Area and no housing unit has been substantially rehabilitated; the small affordable housing requirement is stated to be met by the 100 deed restricted units in the Seal Beach Trailer Park (located in the Riverfront Project Area) which can be counted on a two - for -one basis, for a total of 50 units. Consequently, this requirement is satisfied for the Surfside Project. VI. DISPOSITION OF AGENCY OWNED PROPERTIES (Task 6) 1. Zoeter Place As described above, this property is leased to a tenant and that tenant has an option to purchase, exercisable from July 1, 2004, through December 31, 2004. The Agency could sell the and or convey the property to the City subject to the terms of the Master Lease. 2. Police /Maintenance Yard /Animal Center Facility This property was acquired by the Agency in 1976. It appears that subsequent to the Agency's purchase, the roadway for Adolfo Lopez Drive was constructed through a portion of Analysis of Redevelopment Agency Dissolution Keyser Marston Associates, Inc. City of Seal Beach Page 11 0209027.SB:GSH:gbd 19054.001.001/09/18/02 the property, reducing its size from 7.113 acres to 5.791 acres. The Agency could sell or convey the property to the City or others. VII. COUNTY EXECUTIVE OFFICE CONVERSATIONS In addition to the aforementioned work scope, the Agency has requested that KMA investigate the possibility of having the County of Orange assume responsibility for payment of debt service on the Agency's Tax Allocation Refunding Bonds, 2000 Series A and the Subordinate Tax Allocation Bonds, 2000 Series B. A letter was prepared on behalf of the Agency and transmitted to the Orange County Executive Office (see Appendix Letter B). Although telephone conversations have taken place between KMA and various representatives of the County Executive Office, no decisions have been made by the County and as of this writing no response has been received. • Analysis of Redevelopment Agency Dissolution Keyser Marston Associates, Inc. City of Seal Beach Page 12 0209027.SB.GSH:gbd 19054.001.001/09 118/02 Appendix 1 Tax Increment Allocation From Affected Taxing Entities Appendix Table 1.1 — Tax Allocation Diversion from Taxing Entities Appendix Table 1.2 — Gross Tax Increment Projection (Riverfront Project) Appendix Table 1.3 — Weighted Average of 1% Levy (by Taxing Entity) W er N 0) o 0 0 CD N W N 0 M M W O W (0 O) N C W O 'TN 0 0 V O N (n W 0) O N (o r O O M O) W W CO 0 V (0 C W CO 1` (0 (D (() (() (n (n (O N- W O) O N V (O CD 0 V W N N MM O rj V (n (p N- oD O) O N M V (n N- W O) O O) O) O) O O N N 0 1-6 q! 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O (-) ,, 'c 7) ° o _ o a °' - °= O '" f0 y ° ~ ` ` x z o c? 41 a> 0 Ca A 0 U a I O m a (0 CO m • >. a) N o 4- U C N N 0 m a7 1 � o m I > ; o. v �, Eo�u = >cn3� ca.m LL = > 1- a , o . o a) ;° a) - 0 Q p o O C 2 E 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 q O L) '' 0 a .p d � cc m UU 0 E 000000000 UUcoODUUUC)U @ c>, -1 co > (o' o a) a) m m U a) a) a) a) a) a) a) a) m o .0 F' F- Q .0 cc O co 0) m Q O 0 CD 0) cD C cD C LL LL LL LL LL LL LL LL LL LL ^i X C co x } (a t o o N m m m to Ca m N 0 0. 0 'El m H LL OOcnBOOOOOOOOO wwwwwwwwww 1 pmm C --''" is U _ < m < m < < < < < < < Q w < m < < < Q < < < (n a u a 0) > d N N O O O 00 0 C) et O O N N I- O el et e0 O O O CO (f) O O O v CD 0 O O CD O r et r CO CD Q co O O O N M CO f` n f` N CA 0) O O O 0.1.- N t- 1- O) CA CA Appendices 2 & 3 Long Term Debt Debt Service Schedules Appendix Table 2 -- $8,520,000 Tax Allocation Refunding Bonds, 2000 Series A Appendix Table 3 -- $685,000 Subordinate Tax Allocation Bonds, 2000 Series B • Appendix 2 Long Term Debt - Tax Allocation Bonds $8,520,000 Tax Allocation Refunding Bonds, 2000 Series A Riverfront Redevelopment Project Area Seal Beach Redevelopment Agency Bond Series A FY Year Principal Interest Total 2001 -02 1 390,000 282,666 672,666 2002 -03 2 275,000 401,448 676,448 2003 -04 3 285,000 389,760 674,760 2004 -05 4 295,000 377,363 672,363 2005 -06 5 310,000 364,530 674,530 2006 -07 6 325,000 351,045 676,045 2007 -08 7 340,000 336,583 676,583 2008 -09 8 355,000 321,283 676,283 2009 -10 9 370,000 302,645 672,645 2010 -11 10 _ 390,000 283,220 673,220 2011 -12 11 410,000 262,745 672,745 2012 -13 12 430,000 243,885 673,885 2013 -14 13 450,000 223,675 673,675 2014 -15 14 470,000 202,075 672,075 2015 -16 15 495,000 178,575 673,575 2016 -17 16 520,000 153,825 673,825 2017 -18 17 545,000 127,305 672,305 2018 -19 18 575,000 99,238 674,238 . 2019 -20 19 605,000 69,338 674,338 2020 -21 20 160,000 36,819 196,819 , 2021 -22 21 165,000 28,219 193,219 2022 -23 22 175,000 19,350 194,350 2023 -24 23 185,000 9,944 194,944 Total 8,520,000 5,065,532 13,585,532 Outstanding after FY 2001 -02 8,130,000 4,782,866 12,912,866 Prepared by Keyser Marston Associates, Inc. Filename: TI_Proj_06 -25 -2002: TAB_A: 9/18/2002: GSH Appendix 3 Long Term Debt - Tax Allocation Bonds $685,000 Subordinate Tax Allocation Bonds, 2000 Series B Riverfront Redevelopment Project Area Seal Beach Redevelopment Agency Bond Series B FY Year Principal Interest Total 2001 -02 1 20,000 28,093 48,093 2002 -03 2 25,000 36,010 61,010 2003 -04 3 30,000 34,860 64,860 2004 -05 4 25,000 33,450 58,450 2005 -06 5 25,000 32,169 57,169 2006 -07 6 30,000 30,888 60,888 2007 -08 7 30,000 29,350 59,350 2008 -09 8 35,000 27,813 62,813 2009 -10 9 35,000 26,019 61,019 2010 -11 10 _ 40,000 24,225 64,225 2011 -12 11 40,000 22,175 62,175 2012 -13 12 40,000 20,125 60,125 2013 -14 13 45,000 17,825 62,825 2014 -15 '14 45,000 15,238 60,238 2015 -16 15 50,000 12,650 62,650 2016 -17 16 55,000 9,775 64,775 2017 -18 17 55,000 6,613 61,613 2018 -19 18 60,000 3,450 63,450 2019 -20 19 0 0 0 . 2020 -21 20 0 0 0 2021 -22 21 0 0 0 2022 -23 22 0 0 0 2023 -24 23 0 0 0 Total 685,000 410,725 1,095,725 Outstanding after FY 2001 -02 665,000 382,633 1,047,633 Prepared by Keyser Marston Associates, Inc. Filename: TI_Proj_06 -25 -2002: TAB_B: 9/18/2002: GSH Appendices 4 & 5 Zoeter Place ( "Zoeter Parcel A ") Receivable and Payable Schedules Appendix Table 4 — Lease Payments Receivable, Zoeter Place Appendix 5 — Promissory Note Payable, Zoeter Place Appendix 4 Lease Payments Receivable Under Operating Lease (Income used to Pay $1,832,026 Promissory Note - Parcel A) Riverfront Redevelopment Project Area Seal Beach Redevelopment Agency Annual FY Year Lease 1988 -89 0 60,000 1989 -90 1 180,000 1990 -91 2 180,000 1991 -92 3 180,000 1992 -93 4 180,000 1993 -94 5 180,000 1994 -95 6 180,000 1995 -96 7 180,000 1996 -97 8 180,000 1997 -98 9 180,000 1998 -99 10 189,000 1999 -00 11 207,000 2000 -01 12 207,000 2001 -02 13 207,000 2002 -03 _ 14 207,000 2003 -04 15 217,350 2004 -05 16 238,050 2005 -06 17 238,050 2006 -07 18 238,050 2007 -08 19 238,050 2008 -09 20 249,953 2009 -10 21 273,758 2010 -11 22 273,758 2011 -12 23 273,758 2012 -13 24 273,758 2013 -14 25 287,445 2014 -15 26 314,821 2015 -16 27 314,821 2016 -17 28 314,821 2017 -18 29 314,821 2018 -19 30 330,562 2019 -20 31 362,044 2020 -21 32 362,044 2021 -22 33 362,044 2022 -23 34 362,044 2023 -24 35 241,363 Total 8,778,365 Outstanding after FY 2001 -02 6,288,365 I Forfeiture if Acquired by Lessee (FY 2004 -05 to FY 2023 -24) 5,864,015 • Prepared by Keyser Marston Associates, Inc. Filename: TI_Proj_06-25-2002: ZoeterA_Income: 9/18/2002: GSH Appendix 5 Promissory Note Payable $1,908,360 Parcel A Acquisition Riverfront Redevelopment Project Area Seal Beach Redevelopment Agency Interest at Total Debt FY Year Principal 5.84% Service 1987 -88 0 76,334 111,448 187,782 1988 -89 1 76,334 106,990 183,324 1989 -90 2 76,334 102,532 178,866 1990 -91 3 76,334 98,075 174,409 1991 -92 4 76,334 93,617 169,951 1992 -93 5 76,334 89,159 165,493 1993 -94 6 76,334 84,701 161,035 1994 -95 7 76,334 80,243 156,577 1995 -96 . . 8 76,334 75,785 152,119 1996 -97 9 . 76,334 • 71,327 147,661 1997 -98 10 76,334 66,869 143,203 1998 -99 11 76,334 62,411 '138,745 1999 -00 12 76,334 57,953 134,287 2000 -01 13 76,334 53,495 129,829 2001 -02 14 76,334 49,038 125,372 2002 -03 15 76,334 44,580 120,914 2003 -04 16 76,334 40,122 116,456 2004 -05 17 76,334 35,664 111,998 2005 -06 18 76,334 31,206 107,540 2006 -07 19 76,334 26,748 103,082 2007 -08 20 76,334 22,290 98,624 2008 -09 21 76,334 17,832 94,166 2009 -10 22 76,334 13,374 89,708 2010 -11 23 76,334 8,916 85,250 2011 -12 24 76,334 4,458 80,792 2012 -13 25 10 1 11 Total 1,832,026 1,337,386 3,169,412 Outstanding after FY 2001 -02 763,350 245,191 1,008,541 • Prepared by Keyser Marston Associates, Inc. Filename: TI_Proj_06 -25 -2002: ZoeterA_Expense: 9/18/2002: GSH Appendix 6 Zoeter Daycare Facilities ( "Zoeter Parcels B & D ") Payable Schedule Appendix Table 6 — City Base Rent Payable Appendix 6 City Base Rent Payment Schedule - RDA Assumes City's Obligation Used to Acquire Parcels B & D from Los Alamitos USD $1,590,000 Riverfront Redevelopment Project Area Seal Beach Redevelopment Agency Total Payment Annual Interest at Base Rent FY Year Base Rent 7.84% + Interest 12/31/1987 0 23,000 124,656 147,656 12/31/1988 1 24,000 122,853 146,853 12/31/1989 2 26,000 120,971 146,971 12/31/1990 3 28,000 118,933 146,933 12/31/1991 4 30,000 - 116,738 146,738 12/31/1992 5 33,000 114,386 147,386 12/31/1993 6 35,000 111,798 146,798 12/31/1994 7 38,000 109,054 147,054 12/31/1995 "8 41,000 106,075 147,075 12/31/1996 9 44,000 102,861 146,861 12/31/1997 10 48,000 99,411 147,411 12/31/1998 11 _52,000 95,648 147,648 12/31/1999 12 56,000 91,571 147,571 12/31/2000 13 60,000 87,181 147,181 12/31/2001 14 64,000 82,477 146,477 12/31/2002 15 69,000 77,459 146,459 12/31/2003 16 74,000 72,050 146,050 12/31/2004 17 80,000 66,248 146,248 12/31/2005 18 86,000 59,976 145,976 12/31/2006 19 93,000 53,234 146,234 12/31/2007 20 100,000 45,942 145,942 12/31/2008 21 108,000 38,102 146,102 12/31/2009 22 117,000 29,635 146,635 12/31/2010 23 126,000 20,462 146,462 12/31/2011 24 135,000 10,584 145,584 Total 1,590,000 1,953,650 3,668,306 Outstanding after FY 2001 -02 988,000 473,693 1,461,693 Prepared by Keyser Marston Associates, Inc. Filename: TI_Proj_06 -25 -2002: Zoeter B &D: 9/18/2002: GSH Appendix 7 Loan Payable to the City Loan Amount Outstanding Appendix Table 7 — Loan Payable to the City of Seal Beach Appendix 7 Loan Payable to the City of Seal Beach $215,000 Loan Amount Riverfront Redevelopment Project Area Seal Beach Redevelopment Agency - - • Beginning Interest Ending FY Balance 6% Balance 1993 -94 215,000 12,900 227,900 1994 -95 227,900 13,674 241,574 1995 -96 241,574 14,494 256,068 1996 -97 256,068 15,364 271,433 1997 -98 271,433 16,286 287,718 1998 -99 287,718 17,263 304,982 1999 -00 304,982 18,299 323,281 2000 -01 323,281 19,397 342,677 2001 -02 342,677 20,561 363,238 Prepared by Keyser Marston Associates, Inc. Filename: TI_Proj_06 -25 -2002: City Co -Op Loan: 9/18/2002: GSH Appendix Letter A August 2, 2002 Draft Letter of Findings from Murphy & Davis LLP MURPHY & DAVIS, LLP Attorneys At Law C. NICOLE MURPHY 300 Capitol Mall, Suite 1110 Telephone (916) 446 -6462 MADELINE K. DAVIS Sacramento, California 95814 Facsimile (916) 446 www.m- mlaw.com August 2, 2002 VIA EMAIL Greg Soo -Hoo DRAFT Keyser Marston Associates, Inc. 500 South Grand Avenue, Suite 1480 Los Angeles, CA 90071 RE: Seal Beach Redevelopment Agency — Dissolution Analysis (Phase 1) • Dear Greg: In accordance with our Phase 1 Scope of Services for the Seal Beach Redevelopment Agency dissolution analysis, I am providing the information set forth in this letter for incorporation in your report to the Agency, as necessary and appropriate. Pursuant to Health and Safety Code Section 33141, the City Council of the City of Seal Beach may, by ordinance, deactivate the Seal Beach Redevelopment Agency (the "Agency ") if the Agency has no outstanding bonded indebtedness, no other unpaid loans, indebtedness, or advances, and no legally binding contractual obligations with persons or entities other than the City, unless the City assumes the bonded indebtedness, unpaid loans, indebtedness, and advances, and legally binding contractual obligations. The Agency was established in 1967 and has been vested with the responsibility for carrying out redevelopment in two adopted redevelopment project areas — Riverfront and Surfside. The Redevelopment Plan for the Riverfront Redevelopment Project was adopted in 1969 and territory was added to that Project in 1975. The Redevelopment Plan for the Surfside Redevelopment Project was adopted in 1982; that Project is currently inactive. Dissolution of the Agency would require the termination of both Redevelopment Plans, i.e., by amending both Redevelopment Plans to their duration. Under Section 33333.8, the City Council cannot terminate the Redevelopment Plans if the Agency has not complied with its obligations pertaining to replacement housing (Section 6 All references are to the Health and Safety Code unless otherwise specified. Greg Soo -Hoo August 2, 2002 Keyser Marston Associates, Inc. Page 2 33413(a)), inclusionary housing (Section 33413(b)), or excess surplus housing funds (Section 33334.12). These obligations are discussed below as they relate to each Redevelopment Project. Riverfront Redevelopment Project 1. Replacement Housing: This obligation requires that the Agency replace, on a one - for -one basis, low and moderate income dwelling units destroyed or removed from the Project Area. Because the Riverfront Project was adopted prior to 1976, this requirement became applicable only as to dwelling units destroyed or removed from the Project Area on or after January 1, 1996. According to the Agency's Implementation Plan for 2000 -2005, no housing unit has been destroyed or removed from the Riverfront Project Area. Consequently, this requirement is satisfied. 2. Inclusionary Housing: This obligation requires that certain percentages of housing newly constructed or substantially rehabilitated by the Agency or within the Project Area by others be restricted for occupancy by low and moderate income households. It is applicable only to project areas adopted or areas added to an existing project area on or after January 1, 1976. The original Riverfront Project Area was adopted in 1969 and territory was added in 1975. Consequently, this requirement is not applicable to the Riverfront Project. 3. Excess Surplus: According to the Agency's audited financial statements as of June 30, 2001, an excess surplus of $2,178,345 existed on June 30, 2001, and $1,546,312 of that amount was over three years old resulting in the imposition of a penalty of 50% of that amount to be expended from non - housing funds. (See Note 18 of audited financial statements as of June 30, 2001.) Consequently, the Riverfront Project cannot be terminated until the excess surplus housing funds and penalty amount are expended as required. However, in December 2000, the Agency made loans and grants to LINC Community Development Corporation in connection with the acquisition and rehabilitation of the Seal Beach Trailer Park — a loan of $1,000,000 from housing funds to be repaid from residual receipts; a grant of $294,531.58 for rental assistance, with a continuing obligation for 20 years thereafter to provide additional grants of up to $180,000 per year for rental assistance; and a bridge loan of $1,000,000 from housing funds, to be repaid by a State Loan or from residual receipts. The audited financial statements as of June 30, 2001, do not reflect the expenditure/ encumbrance of the housing fund for these amounts against excess surplus. This issue needs further clarification. Surfside Redevelopment Project 1. Replacement Housing: This obligation requires that the Agency replace, on a one - for -one basis, low and moderate income dwelling units destroyed or removed from the market in the Project Area. According to the Agency's Implementation Plan for 2000 -2005, no Greg Soo -Hoo August 2, 2002 Keyser Marston Associates, Inc. Page 3 housing unit has been destroyed or removed from the Surfside Project Area. Consequently, this requirement is satisfied. 2. Inclusionary Housing: This obligation requires that certain percentages of housing newly constructed or substantially rehabilitated by the Agency or within the Project Area by others be restricted for low and moderate income households. According to the Agency's Implementation Plan for 2000 -2005, only limited residential construction has occurred in the Surfside Project Area and no housing unit has been substantially rehabilitated; the small affordable housing requirement is stated to be met by the 100 deed restricted units in the Seal Beach Trailer Park (located in the Riverfront Project Area) which can be counted on a two- for -one basis, for a total of 50 units. Consequently, this requirement is satisfied. 3. Excess Surplus: According to the Agency's audited financial statements as of June 30, 2001, the Surfside Project Housing Fund has a balance of $176,844 and, therefore, no excess surplus exists. Outstanding Bonded Indebtedness 1. Tax Allocation Bonds, 2000 Series A and B These bonds mature as late as 2023, but may be redeemed as early as 2004 (Series B Term Bonds) and 2008 (Series A Term Bonds). The pledged revenues are tax increments from the Riverfront Redevelopment Project. An early termination of the Redevelopment Plan for the Riverfront Redevelopment Project in 2002 would mean that tax increment revenues could continue to be received only until 2012 (Health and Safety Code Section - 33333.6), not long enough to pay debt service as required by the bonds. If the Agency had sufficient revenue from other sources which when combined with tax increment receipts through 2012 was sufficient to assure payment of the bonds as required, I believe it would be possible to deposit those funds with the bond trustee and assign to the City the Agency's right to receive tax increments through 2012 for the purpose of paying the bonds, in which case the Redevelopment Plan could be terminated in 2002 and the Agency dissolved. (For example, proceeds of the 2000 bonds were used to purchase U. S. Government securities which were deposited with the bond trustees to defease the 1986 and 1991 bonds; see Note 8 of the audited financial statements as of June 30, 2001.) Without such a deposit, the Riverfront Project Area cannot be terminated and the Agency cannot be dissolved. No alternative revenue stream may be substituted in place of tax increments to retire the bonds. Greg Soo -Hoo August 2, 2002 Keyser Marston Associates, Inc. Page 4 The remaining bond proceeds available to the Agency may be used to repay the bonds or to finance other public facilities /redevelopment activities in the Project Area. The 2002 -03 budget for the Agency indicates that the majority of the remaining bond proceeds are proposed to be spent on the West End Pump Station Replacement. 2. Mobile Home Park Revenue Bonds, Series 2000A These bonds are secured by the revenues from the Seal Beach Trailer Park, and all of the Agency's rights in and to those revenues have been assigned to the bond trustee. The Agency has certain continuing non - monetary rights and obligations under the bonds which could be assigned to the City. Other Unpaid Loans, Indebtedness and Advances According to the Agency's Statement of Indebtedness for the 2001 -2002 Fiscal Year, the Agency has the following unpaidindebtedness in addition to the outstanding bonded indebtedness identified above: 1. Lease /Purchase, Zoeter Parcels B &D The City of Seal Beach entered into a Lease with the Los Alamitos Unified School District (the "School District ") on January 1, 1987, leasing Zoeter Parcels B &D. The Lease provides a purchase option to be exercised at any time during the term of the Lease (the Lease expires December 31, 2011); the purchase price for Parcels B &D is $1,590,000 less all amounts paid as Base Rent through the closing date. As of June 30, 2001, the purchase price obligation would have been $1,052,000.. The Agency's audited financial statements as of June 30, 2001, indicate that the City's rights and obligations under the Lease were assigned to the Agency, but I have no other information or documents evidencing that formal assignment or the School District's consent (required). Assuming the Agency did assume the City's obligations under the Lease, it would be necessary to make an assignment back to the City or some other party; such an assignment would again require the School District's consent. Alternatively, the Agency could exercise the option to purchase, pay the purchase price and the Lease would terminate. The property could then be sold by the Agency. 2. Promissory Note /Purchase Zoeter Place On September 1, 1987, the Agency executed a promissory note in favor of the School District for the purchase of Zoeter Parcel A. After a down payment of $76,334, the principal amount of the note was $1,832,052.60. Annual payments of the principal amount of $76,334 plus interest are due until September 1, 2011. The outstanding principal balance of Greg Soo -Hoo August 2, 2002 Keyser Marston Associates, Inc. Page 5 the note as of June 30, 2001, was $839,682. (See Note 9 of audited financial statements as of June 30, 2001.) 3. Advance from City According to the Agency's audited financial statements as of June 30, 2001, the Agency is indebted to the City in the amount of $215,000 plus interest at the rate of 6% per annum commencing July 1, 1993. Legally Binding Contractual Obligations 1. Lease of Zoeter Parcel A • The Agency entered into a Master Lease for Zoeter Parcel A on November 30, 1987. That Master Lease was subsequently amended, the latest of which was the Third Amendment to Master Lease, datediVlarch 28, 1996, between the Agency ( "Landlord ") and Trust "A" of the Karl and Tina Rodi Family Trust ( "Tenant "). Under the Master Lease, the Tenant has an option to purchase Zoeter Parcel A for a purchase price equal to the greater of the fair market value of the property or the then - unpaid balance of the Agency's promissory note to the School District ($839,682). It is believed that the fair market value of the property exceeds the balance due under the Agency's note, although I have insufficient information regarding the potential value of the property. The initial term of the Master Lease is 35 years (ending November 30, 2022), with four extension terms of 5 years each. 2. Loan and Grant Agreement for Seal Beach Trailer Park This Agreement obligates the Agency to make continuing grants of funds for rental assistance to the Seal Beach Trailer Park. The amounts committed for rental assistance are a maximum of $180,000 per year for 20 years after the recording of the loan. This obligation could be assumed by the City. 3. Regulatory Agreements for Seal Beach Trailer Park Two Regulatory Agreements applicable to the Seal Beach Trailer Park were entered into by the Agency, one in connection with the Revenue Bonds and one in connection with the Loan and Grant Agreement. The Agency has continuing non - monetary obligations under these Regulatory Agreements for a period of 30 years; however, those obligations could be assumed by the City. (In fact, the Regulatory Agreement pursuant to the Loan and Grant Agreement specifically contemplates enforcement by the City if the Agency is terminated or dissolved — Section 6.4 thereof.) Greg Soo -Hoo August 2, 2002 Keyser Marston Associates, Inc. Page 6 Disposition of Land Owned by the Agency From a review of the documents provided by the Agency, it appears that the Agency continues to own the following real property: • 1. Zoeter Parcel A As described above, this property is leased to a tenant and that tenant has an option to purchase, exercisable from July 1, 2004, through December 31, 2004. Although I do not have the complete Master Lease (I received only pages 9 through 15), the Agency should be able to sell or convey the property to the City or others, subject to the terms of the Master Lease. • 2. Police /Maintenance Yard Facility This property was acquired by the Agency in 1976. It appears that subsequent to the Agency's purchase, the roadway for Adolfo Lopez Drive was constructed through a portion of the property, reducing its size from 7.113 acres to 5.791 acres. The Agency could sell or convey the property to the City or others. Receivables to the Agency (Other than Tax Increments) 1. Lease Income, Zoeter Parcel A As indicated in the Agency's audited financial statements as of June 30, 2001, over the 35 -year initial term of the Master Lease of this property, the Agency can expect to receive approximately $6,495,365 in rental income, annually $200,000 plus. (See Note 12 of the audited financial statements as of June 30, 2001.) 2. . Loans to LINC Community Development Corporation In connection with the acquisition and rehabilitation of the Seal Beach Trailer Park, the Agency made a $1,000,000 loan to LINC to be repaid over a 30 -year period from residual receipts from the Trailer Park (i.e., Net Operating Revenues less required debt service on the Revenue Bond Loan of $6,750,000 and the State Loan of $1,000,000). This loan was made from the Agency's Riverfront Low and Moderate Income Housing Fund, and funds repaid will therefore retain their character as housing funds that must be used in accordance with Section 33334.2. Also in connection with the Seal Beach Trailer Park project, the Agency made a $1,000,000 bridge loan to LINC to be repaid either from the proceeds of a $1,000,000 State Greg Soo -Hoo August 2, 2002 Keyser Marston Associates, Inc. Page 7 Loan or from residual receipts over a 30 -year period. As of June 30, 2001, LINC had been approved to receive the $1,000,000 State Loan, and it is assumed that all or a majority of the Agency's bridge loan has since been repaid. To the extent that all of a part of the bridge loan was made from the Riverfront Low and Moderate Income Housing Fund, the repayment was required to be deposited back into the Housing Fund for future use in accordance with Section 33334.2. • Conclusion The Surfside Redevelopment Project may be terminated now. The balance of funds in the Surfside Low /Moderate Income Housing Funds could be transferred to the City or to the County•Housing Authority for use as required by Section 33334.2. . The Riverfront Redevelopment Project cannot be terminated unless and until: (1) the issue regarding excess surplus funds and penalty amounts is resolved; and (2) amounts sufficient to pay the Tax Allocation Bonds when due can be deposited and combined with tax increments payable for the next 10 years. Amounts available to pay the Tax Allocation Bonds could include the proceeds of the sale of the properties owned by the Agency (Zoeter Place and the Police /Maintenance Yard Facility), excess proceeds from the purchase and sale of Zoeter Parcels B &D (assuming the value exceeds the purchase price balance of approximately $1,052,000 and requiring Agency or City option exercise), as well as unspent bond proceeds and available /uncommitted cash balance of tax increments. If the excess surplus and penalty amount were adequately funded in December 2000 in connection with the Seal Beach Trailer Park, any balance in the Riverfront Low and Moderate Income Housing Fund could be transferred to the City or to the County Housing Authority for use as required by Section 33334.2. Lastly, until both Redevelopment Projects can be terminated, the Agency cannot be dissolved. If you have any questions, please do not hesitate to call me. Very truly yours, C. Nicole Murphy Appendix Letter B June 28, 2002 Letter to the Orange County Executive Office • K E Y S E R M A R S T O N ASSOCIATES I N C. ADVISORS IN: REAL ESTATE REDEVELOPMENT 500 SOUTH GRAND AVENUE, SUITE 1480 LOS ANGELES, CALIFORNIA 90071 AFFORDABLE HOUSING PHONE: 213/622 -8095 ECONOMIC DEVELOPMENT FAX. 213/622 -5204 FISCAL IMPACT INFRASTRUCTURE FINANCE VALUATION AND LITIGATION SUPPORT Los Angeles Calvin E. Hollis, 11 Kathleen H. Head James A. Rabe Paul C. Anderson Gregory D. Soo -Hoo San Diego Gerald M. Trimble Paul C. Marra June 28, 2002 SAN FRANCISCO A. Jerry Keyser Timothy C. Kelly Kate Earle Funk Mr. Paul Lanning _ Robert J. Wetmore Strategic Affairs Officer Debbie M. Kern County of Orange Executive Office 10 Civic Center Plaza, 3 Floor Santa Ana, California 92701 Re: Seal Beach Redevelopment Agency Dear Mr. Lanning: Keyser Marston Associates, Inc. (KMA) has been retained by the Redevelopment Agency of the City of Seal Beach to independently assess the financial feasibility of dissolving the Agency. The Agency was established in 1967 and administers two redevelopment project areas: the Riverfront Project adopted on March 3, 1969 and the Surfside Project adopted December 13, 1982 (the latter Project Area is now inactive and the Agency does not receive tax increment revenues from this Project). Under the dissolution scenario, a plan for the ongoing repayment of all of the Agency's existing and outstanding indebtedness would have to be created. At the recommendation of the Agency Board, KMA has been instructed to direct the following question to your office for your consideration and response: If the Agency were dissolved, would the County's Redevelopment Agency (or its equivalent) be able to take over receipt of future Riverfront tax increment revenues so as to ensure that debt service on the outstanding 2000 Series A and Mr. Paul Lanning June 28, 2002 County of Orange Executive Office Page 2 Series B Tax Allocation Bonds is paid each year until such time that the Bonds are fully repaid? On December 20, 2000, the Agency issued the following Tax Allocation Bonds secured by tax increment revenues generated by the Riverfront Project: ❖ $8,520,000 Tax Allocation Refunding Bonds, 2000 Series A ❖ $685,000 Subordinate Tax Allocation Bonds, 2000 Series B According to the Agency's FY 2000 -01 audited financial statement, the Agency used the proceeds of Series A Bonds to finance the refunding and defeasance of $1,380,000 of 1986 Tax Allocation Bonds and $3,715,000 of 1991 Tax Allocation Bonds previously issued by the Agency. The Agency used the proceeds of Series B Bonds to finance various redevelopment activities of the Agency. Under such a dissolution scenario, future year housing set aside monies would likely be transferred to the County Housing Authority and Riverfront tax increment revenues in excess of annual Bond debt service and housing set aside would be reallocated to the affected taxing entities. KMA knows of no historic precedent regarding this question. It is not presently known to KMA whether such an idea is permissible under existing redevelopment law or the 2000 Tax Allocation Bond covenants. This question has not yet been put forth to bond counsel or to the County Counsel's office. While KMA acknowledges that such an idea remains untested, we are nevertheless submitting this question to the County for your due diligence consideration and reply. I can be reached at (213) 622 -8095 to discuss the matter with you. Your attention to this matter is greatly appreciated. Sincerely, KEYSER MARSTON ASSOCIATES, INC. Greg Soo -Hoo cc: Bill Mahoney Consideration of Consultant Report — Potential Dissolution of Redevelopment Agency Redevelopment Agency Staff Report September 23, 2002 ATTACHMENT 2 REDEVELOPMENT AGENCY MINUTES, MAY 28, 2002 Dissolution of Agency Report.RDA Staff Report 7 • SELECTION OF VICE CHAIRMAN Agencymember Doane nominated Mr. Antos as the Vice Chairman for year 2002/2003. Agencymember Yost seconded the motion. AYES: Antos, Campbell, Doane, Larson, Yost NOES: Nona Motion carried RESOLUTION NUMBER 02 -2 - CONSULTANT SERVICES - DISSOLUTION OF REDEVELOPMENT AGENCY . The Director of Development Services noted that the report presented by staff is the result of a request to bring back to the Agency suggestions as to how to look at dissolving the Redevelopment Agency. He reported that Requests for Proposals were distributed, two proposals were submitted, also a letter from a firm that received a proposal indicating that unless the City was willing to take on the obligations of the Agency they did not see any reason for the City to even consider such an action therefore did not submit a proposal, that letter and both proposals provided with the agenda report. The Director mentioned that interviews were conducted with both firms, based thereon they were requested to submit a revised letter proposal that focused more on the issues of getting to the point of whether or not the City wanted to proceed to formal hearings to consider dissolving the Agency, should that be the determination a number of additional, more detailed studies will be required to take such action, both firms have sent back proposals for the limited scope of work that outlines what basic actions would be necessary to dissolve the Agency, the obligations of the Agency and how those obligations would be resolved, as well as the issue of what will happen to the assets that are owned by the Agency, properties, leases, etc. The Director noted that representatives of both firms were present, it is the opinion of staff that either firm is qualified to do the work, both have a clear understanding of Redevelopment Law, and although both indicated this type of action is not one that they have a number of requests to consider it is something that they feel they can deal with. The cost of the first phase of services are $11,500.00 for the firm of Keyser Marston Associates, Inc., and $17,500.00 for A. C. Lazzaretto & Associates, should the Agency determine -to retain one of these firms a Resolution has also been prepared to amend the Agency consultant budget to reflect a cost amount of up to $25,000.00, and noted that the interview panel consisted of the City Manager, City Attorney, and Director of Development Services. In response to a question of Agency, staff confirmed that it is felt that both firms have the expertise to handle this type of request. Agencymember Antos noted that a - suggestion was heard earlier that the City check with the County to see if they would be willing to assume the obligation of debt of the Agency, and should the Agency take an action to hire one of the consulting firms, he asked if it would be possible for the City Manager or City Attorney to check on that with the County as an alternative. Agencymember Yost said he too thought that was an interesting suggestion, it could be looked into. The Director said he felt certain those issues could be addressed with the County, it needs to be kept in mind • however that Redevelopment Agency actions are governed by State law and there needs to be certainty that those provisions are complied with. Chairman Campbell mentioned that prior to the last meeting she met with the Finance Administrator to obtain some bottom line facts, the City has an assessed valuation of $2.6 billion, it receives a little over $2.8 million in regular property taxes, that could be higher however there is a large percentage of pre - Proposition 13 residences, about thirty to thirty -five percent, which are not going away, the situation is that the second generation is moving back to the parents home, living there and taking advantage of the property tax benefits by being placed on the deed and the parents have moved to Leisure World with the second generation paying for the new residence. The City also received $1.38 million from the Riverfront Project Area, that is twenty - seven percent of the property tax received, the City can not afford to lose that money, the key issue is that those properties are in the Redevelopment Agency and it takes about $740,000 to $750,000 per year service the debt, the remainder of the tax increment is money that can be used on other projects, given that this is a City that is in need of recurring revenues that is important. She noted that Redevelopment funds in past have gone to build the Mary Wilson Library, bought land for the Public Works Yard, and about to build a pump station behind the Trailer Park which will keep Old Town from flooding. As a point of information, there are three libraries in the City, one in Leisure World where when the library system was in financial difficulty Leisure World purchased it from the County, there is the Mary Wilson Library in Old Town and the Rossmoor /Los Alamitos Library in the Rossmoor Shopping Center yet technically in Seal Beach, the people of College Park East use the Rossmoor /Los Alamitos Library yet the CPE property taxes do not go to service that library rather the Mary Wilson Library, to that she inquired of the Orange County librarian what would happen if the CPE taxes were to go to the library they use, the response was that the Mary Wilson Library would need to be closed, that she did not pursue further. Chairman Campbell said it is likely there are some cities that may abuse the Redevelopment Agency however Seal Beach is not one of them, the letter from the Davis Company basically states that the Agency could be dissolved if the Agency has no outstanding bonded indebtedness or unpaid loans, indebtedness or advances....if the City agrees to assume "all outstanding bonded indebtedness, unpaid loans and advances and legally binding contractual obligations it could be dissolved," however there is no way the City could take on $750,000 in loan services, and if the Agency were given to the County the City would then be giving up all of the additional money that is received, no additional land is being placed • into the Redevelopment Agency. Given the information she received from the Finance Administrator she could see no reason to spend $17,000 or $20,000 to hire a consultant to tell the City and Agency the same facts, the firm that did not submit a proposal has set forth what the guidelines are, which is what the others will also say, she can not support spending that kind of money for something that is already known, her feeling is that that money can be put to better use by helping the residents of this community. Yost moved, second by Antos, to allow the public to comment. There was no objection voiced. Mr. Jim Caviola, Seal Beach, said Chairman Campbell just provided the answer to this whole issue, it was mentioned that the Agency brings in $1 million in increment, the debt service is $750,000, that is a net of up to $300,000 remaining, the Agency needs to spend twenty percent on low income housing, that is the problem, that is $200,000 per year, that leaves $100,000, if the Agency were dissolved then the City would receive the regular property tax, about $150,000. Mr. Caviola claimed that in any debt situation there is always an end user that will assume the debt because the cash flow will always pay for the debt, this whole thing deprives the County of the incremental tax, that is why the County of Los Angeles is getting ready to sue the City of Los Angeles because the cities can not keep depriving the counties of this money, at present Long Beach can not pay its minimum-debt, in the case of Seal Beach it is paying $750,000 out of $1 million, that is a misuse. The people who come into town are taking the cities, Mr. Johnson as an example owned Seal Beach Affordable Housing fifteen months before Mr. Hall closed escrow. By the numbers stated this community would receive more money if they would - assume the debt based upon the cash flow, this would not require lawyers or consultants, and he personally intends to go to the County and talk to the Tax Assessor, it is common for people to assume debt, this City will net more money without the Agency. Agencymember Larson countered that the a previously stated that the City spends so much money on consultants why not hire a firm to find out if this is a good idea or not, now the argument is that the City should not spend the money, it is not understood. Mr. Caviola stated that he agreed with Agencymember Larson, said he is learning as he goes, he was pushed into this because the proposal was to put the low /moderate income housing next to his home, during the last month he took his personal time to get more educated so he is willing to change, he is witnessing what is going on, from the budget it is clear that the money is going out the door to lawyers. An unnamed member of the audience noted the $750,000 annual debt, and-if the Agency is dissolved, is it known how much the Agency assets will bring, would those resources then cure the debt. The response of Chairman Campbell was that the assets are not going to be sold. Ms. Reva Olson, Seal Beach, stated that the problem with the Redevelopment Agency is that the monies do not go into the City revenues, it is a slush fund for developers, the Agency continues to go into debt, it owes $9 million, the Agency and City are making the decisions as to how to spend the tax increment, it is not with a vote of the people, it also diverts money from schools, roads, and services. Ms. Joyce Parque, Seal Beach, noted the continued reference to the pump station keeping Old Town from flooding, yet her recollection was that the last flood was of the Bridgeport homes not Old Town, the flood of 1983 however flooded the areas of 14th to 17th Street, the pump station by the Trailer Park has nothing to do with keeping Old Town dry. Her feeling is that the talk about the libraries is dividing the City, the beachfront properties likely funds the majority of the City employees, the utility tax is about $4 million, the property taxes are only about $3 million. Ms. Sue Corbin, Seal Beach, said Old Town does not need a cure, it is not blighted, and continued with comments relating to recurring debt. Ms. Corbin said she took this issue to a constitutional researcher /scholar and that person took a cursary look at the issue, commerce is the overriding reason for the Constitution, redevelopment violates that even though it has not been tested, whenever the flow of commerce is stopped it is a violation of the Constitution, that is what redevelopment does. She said people have a right to petition their government, they have been prevented from gaining documents for years, this City government has not been properly managed, the City needs proper representation and protection. Chairman Campbell requested that the speakers address the issues under consideration. Ms. Karen Tarascio, Trailer Park, said if the payment for the Trailer Park was overpaid by $2 million, if that money could be recovered the low- income residents of the Park would not need subsidies. Agencymember Antos noted that the Agency owns the ballfield at Zoeter Place, he was uncertain whether it is the Agency or the City that owns the commercial parcel, and one of the items mentioned in the letter from the firm that did not submit a proposal was the selling of Agency assets, if however it is the Agency rather than the City that owns the commercial then that should be determined before retaining a consultant, evaluate what it might be worth, also determine whether any of the bonds that have been sold in the past have prepayment penalties, in some instances they may not, if those questions were answered then the Agency would be in a better position to determine whether to retain a consultant, that would provide information to balance out the Agency's books, and if a request is going to be proposed to the County as to their interest, if the Agency could sell something that is not a park or a library as an example, that could be used to gay down the bonds without a prepayment penalty, that could possibly put the Agency in a different position in talking with the County, suggesting that possibly this could be held over until the next Agency meeting. The Executive Director confirmed that it is the Agency that owns Zoeter field, there are notes in the audit that reflects the Zoeter debt, there is typically a prepayment penalty on all bonds, there is a leasehold on Zoeter by Rodi properties that comes due about 2004, the property is split between commercial and the two daycare centers, one of the things that the consultant would be requested to look at is Agency assets as well as the issues raised by the public and Council. Agencymember Yost asked if the consultants would possibly consider looking into whether the County would be willing to assume the Agency obligations as part of the RFP. An indication of the consultants from the audience was that that could likely be done. Chairman Campbell expressed her opinion that much of this the City could do in -house therefore save the proposed expenditure, which in turn could be used to assist residents. With regard to Zoeter she noted that at the time that Seal Beach joined the Los Alamitos School District the residents of the Bill and Old Town pushed for the City to acquire that entire property in that the Los Alamitos School District was going to sell the site, the City did purchase it, it will be of interest to see if the feelings remain the same. Mr. Caviola made the statement that his thought was to not get rid of any property. He proceeded with his explanation that the Redevelopment Agency incremental tax goes to the Agency, not the City General Fund, and if it is given to the County it will be in perpetuity, to that he would suggest going directly to the tax assessor and explain that the Agency wants to keep its property, have the County assume the Agency debt whatever it may be, and show the cash flow perpetuity that the County will receive, the debt will be paid in about ten years, then the County will be collecting the increment forever. Mr. Caviola said redevelopment agencies are not a favorite subject with the County, Seal Beach could be could be a pioneer in such a transfer if the County can be shown that they will receive the cashflow forever, this has nothing to do with giving up property. Councilman Yost pointed out that at present only $.13 on the dollar of sales tax comes back to this community, with the State budget coming up things may not look well for the counties as well, the State could look at • attacking their property tax too, the County gets a much larger share than does the City, and it is obvious that there is a positive cashflow although is subject to the whims of State law as well, however he would be willing to look at the concept. Mr. Caviola stated again that the incremental tax goes to the Agency, if the Agency is disbanded then the money that comes to the City will go to the General Fund, there will no longer be the obligation of the twenty percent setaside and the City will net more money long term, members of the Council merely need to go to the assessor, not staff as that is a conflict, the City should go back to natural progression. Ms. Sue Corbin spoke to the Zoeter Place frontage lease, said the lessor will have the ability to buy the frontage in 2004 for very little money, this agreement never should have been signed. Agencymember Larson said he did not know if any of the speakers are knowledgable of the law, 'he dislikes spending money for things that could be used for something else, yet these people will not believe the Agency if on its own brings forth-an answer to this situation, the only way this can be done is to have independent experts prepare answers to these questions, if the response were to be that there is no way to disband the Agency then the people would be as unhappy as they are at this meeting so he could not see that delaying this issue for a couple of weeks or even months is going to make any difference, the people do not believe the Agency or the staff so let the experts advise as to what can and can not be done. Agencymember Larson said the next issue that he would raise is that if the people do not have title to the Trailer Park, and if someone else owned it, sold it, the Agency helped the residents buy it by putting in $1 million, it did not work out, therefore he would speak for selling the property, getting the $1 million back, and if the Park residents want to buy it that would be fine, why should the Agency put up $1 million, treat it like a public debt when it is not. Larson moved, second by.Yost, to select the consulting firm of Keyser Marston Associates, Inc., authorize the Executive Director to negotiate and execute the contract in accordance with the proposal of the selected consultant, and adopt Resolution Number 02 -2 entitled "A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH AUTHORIZING BUDGET AMENDMENT NUMBER 28 FOR THE 2001/2002 FISCAL YEAR." By unanimous consent, full reading of Resolution Number 02 -2 was waived. • AYES: Antos, Doane, Larson, Yost NOES: Campbell Motion carried SEAL BEACH TRAILER PARK - RESPONSE TO ISSUES RAISED The Director of Development Services stated the staff report has tried to respond to various issues raised at previous Agency and City Council meetings, also offered to respond to questions from the Agency. The Director noted the one issue heard during public comments was who owns the Trailer Park, to that it is clear that the Trailer Park was acquired by LINC Housing, the terms of the agreements are that once the bonds are paid then the property reverts to ownership by the residents of the Park, yet until the bonds are paid it is LINC that owns the Park, and pointed out that certain language that was quoted from the AB 1290 Plan was somewhat different and incorrect. With regard to the question as to where the twenty houses have gone, Chairman Campbell explained that initially there were one hundred twenty -five units in the Park, one hundred twenty were low to moderate housing, five were not, under the new bonding' the requirement was for eighty percent to be low to moderate income housing, that is one hundred units, the units did not go away merely reclassified, that was twenty units. With regard to her understanding of the way the ownership of the Trailer Park is structured, LINC Housing bought the property and put it into one of their 501C -3 corporations, that was necessary because of the tax exempt status of the bonds, the issue was for municipal bonds, typically municipal bonds pay less than regular bonds, about 4.5 percent, regular bonds pay 5 percent and up, the reason is that the interest is tax free, in discussions with the bond consultants, and they looked over the income of the residents, the maximum they could qualify for bonding was about $6'.5 million, the City with the MPROP loan brought the amount to $7.5 $7.4 million was the purchase price, the City also paid the closing costs which was in the range of $900,000, that was all that could be done with the financing. Chairman Campbell mentioned that application has also been made for tax exempt status for the Seal Beach Affordable Housing Corporation, which takes some time, however once the tax exempt status is realized then title will be transferred from LINC Housing to the Seal Beach Affordable Housing Corporation. She used as an example the purchase of a condominium unit which allows a vote for that condominium for the Board of Directors, that is somewhat the same manner in which the Trailer Park has been structured, there will be a seven member Board, according to the Corporation and the MPROP loan it is necessary that two members be from the Trailer Park, two are from the community at large, and three are from the LINC Housing Board, once the bonds are paid, which LINC has said and it is in writing, LINC will be gone, then • the remaining four members will vote on those they want to Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report February 28, 2005 ATTACHMENT 6 REDEVELOPMENT AGENCY MINUTES - SEPTEMBER 23, 2002 Dissolution of Agency, Phase II.RDA Staff Report 2 19 Page Two - Redevelopment Agency Minutes - September 23, 2002 Permit for the Trailer Park has been located, that was part of the question and answer session in April. There being no further comments, Chairman Campbell declared Public Comments to be closed. CONSULTPSIT REPORT - DISSOLUTION OF REDEVELOPMENT P.GENCY The Director of Development Services noted that requests for proposals were distributed in April, the Agency approved the scope of work and retained Keyser Marston Associates on May 28th, the consultant report has been provided the Council, Mr. Greg Soo -Hoo and Ms. Nichole Murphy were present to provide information from that document, most likely addressing the issues set forth in the Executive Summary. The Director pointed out that the report does not make a recommendation as to the dissolution of the Agency, that being a policy decision of the Agency once this report and any other input has been received, also, the Agency had asked the consulting team co contact the County regarding their willingness to accept the debt of the Agency and receive the tax increment funds, pay off the bond issues and use the funds in accordance with the provisions of redevelopment law, and as pointed out in the communication from Keyser Marston to date there has been no written communication from the County on that proposal, and suggested that any questions of the Agency can be referred to the Keyser Marston representatives. Agencymember Yost arrived at 6:54 p.m. Mr. Greg Soo -Hoo, principal of Keyser Marston Associates, introduced Ms. Nichole Murphy, a partner of Murphy and ' Davis, a redevelopment law firm based in Sacramento. Mr. Soo -Hoo confirmed that their firm was retained by the City to analyze two items as they pertained to the dissolution alternatives of the Redevelopment Agency, the first was to provide an objective review of the legal parameters involved in a redevelopment agency dissolution as provided in California redevelopment law, the second area that they were to address was the identification of the various existing financial obligations of the Agency which would '. presumably be transferred to either the City or a third party entity such as the County or a bond trustee, to be able to look at what those identified outstanding indebtedness obligations were and then be able to identify what the possible alternatives for assumption of those responsibilities could be, the intent of the report is to identify those two matters and address the issue of the County and its willingness to assume responsibility for the tax allocation bond debt. Mr. Soo -Hoo mentioned that in July they had contacted Mr. Paul Lanning of the County Executive Office to analyze the situation and as the Director indicated as of their most recent transmittal to the Agency last week no written comment or response was received from the County Executive Office as to their interest or position or inclination to assume the debt, and in his last conversation with County staff they had indicated that it would require further legal counsel review on their part and asked that the Agency consider • assisting in paving for some of that cost inasmuch as it is Page Three - Redevelopment Agency Minutes - September 23, 2002 outside legal counsel. Mr. Soo -Hoo pointed out that the analysis is not intended to persuade or dissuade the City as to the decision of dissolution, as indicated in the cover letter to the Agency that decision is thought to be addressed on the broader question of has the Redevelopment Agency accomplished all of its stated goals and objectives in the Redevelopment Plan, would the City's General Fund be willing to assume some of the Agency's liabilities and obligations and at what cost to the City's General Fund revenues, and then, would the Redevelopment Agency by its dissolution with the City be willing to allow the County to essentially use the low and moderate income housing funds at its discretion throughout the City of Seal Beach, those being questions that are not addressed in the letter but are questions that need to be discussed on a much broader level amongst the City, Redevelopment Agency and the County. .Mr. Soo -Hoo said he would first like to address the legal parameters that Ms. Murphy identified in the report as part of their research and review of California redevelopment law, by way of introduction Health and Safety Code 33141 makes some provisions for an agency dissolution or deactivation, restated in the report to.read that 'agency deactivation may occur if the redevelopment agency has no outstanding bonded indebtedness, no unpaid loans, indebtedness or advances, and no legally binding contractual obligations with persons or entities other than the City, unless the City is willing to assume these obligations,' in addition, the redevelopment plans can not be terminated if there is no compliance with the obligations pertaining to replacement housing, inclusionary housing, or excess surplus housing funds. / Mr. Soo -Hoo directed attention to the Executive Summary of the report, said in their identification of the two redevelopment plans currently in place with the Redevelopment Agency, it is understood that the Surfside Project Area is currently not receiving any tax increment revenues however the Redevelopment Plan remains active and in effect, so'what would have to happen is that the balance of funds represented by the housing set aside monies set of the Surfside Project would have to be transferred either to the City for its distribution and use or to the County Housing Authority, once the balance of housing sec aside monies from the Surfside Project have been reallocated the Surfside Plan can be amended so that the Plan becomes essentially deactivated. With regard to the Riverfront Project Area, because of the identified existing bonded indebtedness as well as other indebtedness obligations of the Project Area it is a more complicated matter. As is known the tax allocation bonds have been financed out of the Riverfront tax increment revenues and obligate the tax increment monies to the total of about $14 million in both principal and interest out into the future, those bonds do not terminate for a number of years so one of the key objectives that the Agency will Page Four - Redevelopment Agency Minutes - September 23, 2002 have to fulfill is the way in which those principal and interest payments will have to somehow be satisfied in order for the deactivation of the Riverfront Project Area to occur. There are several other smaller obligations related to some payments associated with Zoeter Place, it is lease revenue bond financing that took place, and with the Zoeter Place promissory note what happens is that there is income coming in for Zoeter Place and as a result of those lease payments the Agency is then servicing a note to repay back on that debt, the amount of outstanding principal and interest on the Zoeter Place note would be approximately $1 million so it is not much relative to the tax allocation bond debt. Tied in with the Zoeter property there is another obligation that the Redevelopment Agency assumed over the City's initial obligation which is Zoeter daycare facilities and at this juncture the Redevelopment Agency is making payments for the purchase of that property originally purchased by the City from the Los Alamitos Unified School District, so that would again be another obligation that would ultimately revert back to the City if the Redevelopment Agency were to dissolve itself. The fourth major obligation would then be to the City General Fund, there is approximately $363,000 in debt, including interest, that is to be paid back to the City General Fund, that would either have to be allowed or the City would have to forgive that debt of the Agency. The final item is an obligation of excess surplus penalties which were incurred by the Redevelopment Housing Fund and that is in an amount of approximately $688,000 from 2001 when the $688,000 of penalties were assessed to the Housing Fund, those have to be satisfied and according to the Agency Finance Department those are going to be satisfied out of net tax increment monies after debt service, after administration, after housing setaside, of about $70,000 per year. These are the obligations that he will walk through with the Agency. Mr. Soo -Hoo noted that the gentleman before him had indicated what the'obligations would be if the Agency were to dissolve itself and what the net benefit to the General Fund would be. Proceeding to speak in more detail about the Riverfront Redevelopment Project Area, Mr. Soo -Hoo said at present the gross tax increment dollars of about $1.1 million per year are being generated by the Riverfront Project, from that twenty percent is placed in the setaside housing fund, the balance is used for a combination of uses whether that be the repayment of debt on the Tax Allocation Bonds, secured by revenues from Riverfront, as well as Agency administration and some of the other obligations mentioned. If the Agency were to terminate this Redevelopment Project Area, on a gross tax increment basis they estimated conservatively that it would be about $27 million that the Agency would forfeit from the current fiscal year until the Plan termination which is 2023/2024 fiscal, with that cumulative amount of $27 million a portion would be paid to the housing setaside fund, a portion would be paid to debt Page Five - Redevelopment Agency Minutes - September 23, 2002 service obligations on the bonds, nevertheless, the issue is that conservatively, conservatively meaning in their initial projections they assumed a two percent growth reflecting Prop 13 increases every year off of the reported values of the project in 2001/02, escalated those every year by two percent, this did not assume any new development activities, transfers of ownership, simply Prop 13 increases at a maximum of two percent, and they cumulated the resulting gross tax increment amounts which • is about $27 million. On page two of the Executive Summary it should be noted that approximately seventy percent of all of that money would revert back to the unified school districts, whether that be Los Alamitos Unified, the Coast Community College, or the State Educational Revenue Augmentation Fund, school district allocations of the $27 million would be about $13.1 million, State ERAF would be $5 million, the County taxing entities, the General Fund, Flood District, Water District, etc., would receive about $4.5 million, and the City General Fund would be $4.2 million for the period from now to 2023, therefor the largest diversion of tax increment dollars is the impact to the unified school districts. If the Agency were to dissolve itself one of the issues that relates to the $27 million is that the Agency would need to figure out a way to satisfy the outstanding debt obligation of the 2000 Tax Allocation Bonds, Series A and Series B, as mentioned earlier about $8.8 million of debt remains outstanding in principal and another $5 million in interest, those debt payment obligations when they come to their termination are approximately $14 million, that by far is the biggest 'obligation, for this Project Area to close itself down the $14 million obligation would somehow have to be satisfied. Mr. Soo -Hoo stated that based upon Ms. Murphy's review of the bond documentation as well as their understanding of the legal parameters involved, the Agency can use tax increment financing in terms of the Tax Allocation bonds to service this debt, the Agency can also consider land sale proceeds. Thus they have indicated a strategy that if it were the desire of the Agency to pay off the Tax Allocation Bond debt, what it would theoretically do is deactivate the Redevelopment Plan possibly in 2003, under existing Redevelopment law it indicates that the Agency has an additional ten years after Plan termination to collect tax increment dollars, if the Agency were to receive those tax increment dollars and accumulate them in a revolving fund held by a bond trustee, the Agency would annually deposit all of the tax increment it collect within the ten year time frame, the Agency would then have to include land sale proceeds or existing bond proceeds that have remained unspent in the Agency, a combination of those types of funds, those three funding sources, could theoretically satisfy the Tax Allocation Bond debt obligations until they terminate. Mr. Soo -Hoo said they had not worked out a cash flow analysis because they did not have enough information on what the potential land sale proceeds would be, it is known that approximately $3.3 million in outstanding bond debt remains, it would then require some very hard decisions of the Agency and City with respect to the Page Six - Redevelopment.Agency Minutes - September 23, 2002 intended use of the initial bond proceeds, because if you use the bond'proceeds to pay down the debt service of future bonds the Agency /City will not be able to accomplish some of the capital improvement projects that were originally slated with the use of those proceeds. He offered that those are some of the considerations that have to be discussed and analyzed before the Agency actually makes this particular decision. As indicated, as the Agency continues to receive the tax increment dollars for ten years it would still need to continue to set aside the twenty percent of the collected dollars in the housing setaside fund and use those setaside monies within the City for low to moderate income housing purposes. Mr. Soo -Hoo said his understanding of the unspent bond proceeds is that there is approximately $3.3 million that they were able to identify with the Agency finance staff of unspent proceeds today, $2.3 million of the $3.3 total is now slated for use for the West End Pump Station Replacement, as he understands, the money out of the existing bond proceeds then the money will have to come from some other funding source, most likely the City General Fund. The balance of $1 million is also available for other various capital improvement projects, City Yard improvements, and other discretionary capital activities that the Agency may choose to pursue, again, as with the West End Pump Station some serious decisions have to be made as to whether the Agency will proceed or not proceed with these capital improvement projects and the use of the existing bond proceeds if the Agency was to pursue the dissolution scenario. Another funding source they identified, as it related to the Tax Allocation Bonds, would be land sale proceeds, one of the options available to the Agency would be the sale of Zoeter Place, the existing tenant does not have the option to purchase that property until July through December 2004, but at that juncture when they elect and possibly pursue that option that may be another potential source of proceeds, not being appraisers their firm does not know what the appraised value of Zoeter Place would be, but potentially another funding source. Another property mentioned in the report is the Police /Maintenance Yard facility, that again is an Agency owned property that could potentially be sold, there would be the dilemma however of selling that piece of land and finding a replacement property, the question would be would the City incur additional costs by trying to find another parcel in which to relocate the Police /Maintenance Yard facility. Mr. Soo - Hoo said another caveat that they suggest is that legal . bond counsel should be retained as there are questions that are yet to be resolved related to bond arbitrage considerations, the fact that the City is not spending the proceeds within a set period of time and in fact depositing them into a fund that would then pay down future debt service, there may be some legal restrictions that need to be explored further in this analysis as to whether or not under bond or federal tax laws are legally acceptable, so Page Seven - Redevelopment Agency Minutes - September 23, 2002 they would suggest that if the Agency were to consider this pursuit thac'the opinion of legal bond counsel be retained as to whether or not that would be an appropriate alternative for the Agency to pursue. Before moving on to some of the other debt obligations Mr. Soo -Hoo asked if there were any questions relating to the Tax Allocation Bond financing options. Agencymember Yost noted the comments relating to sale of several different resources, Zoeter Place is very emotional to a lot of people yet something he might think about as using as a resource, he would not sell City Hall or the Police Department or the Yard, but is there a way to separate those and have the time frame moved further out such that that could be repaid or is it still necessary to have bond counsel in order to do that. Mr. Soo -Hoo said the Agency would do well to retain legal bond counsel to ask that particular question, there are other funding sources that he had mentioned, one would be that the City does have discretionary bond proceeds that are available, at this juncture is approximately $3.3 million, that would pay for a portion of the remaining outstanding debt, it would not be enough however, the City would also need to rely on the only other funding source to secure bonds which would be tax increment revenues that would continue to be collected over the remaining ten years after dissolution. It must be kept in mind that Agency dissolution or the Project Area termination can occur at any juncture in time that the Agency chooses to pursue that if that is the alternative that the Agency wants to go with, he used the year 2003 as an example if there was the need to proceed rather quickly, then after 2003 there would be an additional ten years of tax increment collection in order to accumulate into this fund. Agencymember Yost noted comments about the County taking over the property tax rolls, it seemed as if the comments reflected two different scenarios, one where the County would take over the Agency then use the tax increment money for low to moderate income housing and make that decision versus dissolving the Agency completely and going to the usual form of distribution in which case there would not be a twenty percent set aside, and inquired if those were two different scenarios. In response, Mr. Soo - Hoo explained that under current law if the Agency gave its setaside money, just the twenty percent, to be used by the County Housing Authority, they could legally receive those allocations and spend the funds appropriately, however the law, as it is understood, would still restrict the expenditure by the County Housing Authority to the City of Seal Beach, they can not spend it in another city, it must be within the legal boundaries of Seal Beach, the City is bound by redevelopment law for those expenditures whether it is the City, Agency, or the County Housing Authority. • He stated that the second question related to an issue that arose early on when they were retained which was if the County was willing to pursue assumption of the Tax Allocation Bond debt the only scenario that he could understand where the County potentially could do that would be in which the County Redevelopment Agency assumes the responsibility of the Agency's debt service, the County Page Eight - Redevelopment Agency Minutes - September 23, 2002 would continue to collect the tax increment that would otherwise go 'to the Redevelopment Agency in Seal Beach, and they in turn would.pay the debt service, the County Redevelopment Agency would be responsible for the Tax • Allocation Bond debt, the problem is that the County is not sure that legally they can even do that under existing redevelopment law as well as under the covenants set forth in the bond documents when the 2000 bonds were issued so they have deferred decisions until there is a legal opinion and further review and research can be conducted on that matter, it has been about three months since he initially contacted the County on this matter, and he has not been successful even as of last week to get an official commitment one way or another from them. Agencymember Yost inquired as to any type of time frame where an answer could be anticipated for clarification. Mr. Soo -Hoo said as he mentioned earlier one of the proposals is that they would ask the City to pay for some of their legal costs to help defray the outside legal opinion that they would need to get, that was according to conversation with the County Executive Office, therefore if the Agency wants to pursue this further the County would be willing to talk provided that to a degree the Agency or City is willing to help pay for some of their legal expenses, again, that is because they retain outside legal counsel when it comes to redevelopment matters. Agencymember Yost asked if the Surfside Redevelopment Agency could be dissolved independently from the Riverfront Redevelopment Agency. Mr. Soo -Hoo responded that the answer would be yes provided that the Various parameters of both indebtedness as well as satisfaction of the Housing Element, inclusionary housing and excess surplus funds are satisfied, they can be done separately. Chairman Campbell asked if there is an up or down side to dissolving the Surfside Redevelopment Agency. Mr. Soo -Hoo stated that if there are no other redevelopment projects, programs, or activities that the Agency wishes to pursue in Surfside then it would actually be a neutral issue because the Agency is not collecting any tax increment and there are really no outstanding indebtedness obligations incurred by the Surfside Plan therefore at this juncture it would be neutral, the dollars would just revert back to the affected taxing entities in the County, the school districts and the City. Mr. Soo -Hoo stated that the Zoeter Place promissory note, as he had mentioned, represents a lease note repayment in which income is received by the Agency, that income in turn is used to service the debt, in theory that would actually be neutral in terms of impact to the City General Fund, however, if the Agency were to dissolve itself and if the Zoeter Place properties were to be sold there would be a • potential loss of future revenues obviously because the lease income would no longer come in, the debt obligation on Zoeter Place's promissory note would be satisfied of course by the sale however any excess income in excess of the debt service would no longer be realized by the City, they estimated that, if the property were sold at the Page Nine - Redevelopment Agency Minutes - September 23, 2002 lessees option in 2004 the City or Agency would actually forfeit about $5.8 million in cumulative income potentially. The Zoeter Place promissory note is again one of the neutral issues in which the City and the Redevelopment Agency would not be fiscally hurt if the City were to incur the responsibility of paying the promissory note, tied in with that is the Zoeter daycare facilities, this again is where the City acquired the property from Los Alamitos Unified, the annual payments made by the Redevelopment Agency are approximately $146,000 per year, presumably then if the City were to assume that responsibility back the General Fund would be responsible for that debt payment obligation. Another option was addressed whereby'the Agency could exercise its purchase option to acquire the property and of course the lease would then terminate and the responsibility of making debt payments to the Unified School District would cease, the Agency could then theoretically take that property and sell it again to another third party, and as mentioned in the staff memo there are some considerations because theoretically the City could lose the use of the facility as daycare, again, that would be a consideration before making a decision in that direction. Mr. Soo -Hoo mentioned again the General Fund loan obligation, his understanding is that the original incurrence of the City General Fund was to cover Redevelopment Agency debt early in the Redevelopment Project Area formation, with interest payments that cumulative is now about $363,000 that is owed back to the City General Fund and it would either need to be repaid from available tax increments or would need to be forgiven by the General Fund if the City Council were to provide such forgiveness, again, the reason is that these are loans or advances incurred by the Redevelopment Agency. Chairman Campbell made reference to page nine of the report for the purpose of clarification, the last paragraph, relating to the repayment of the $1 million bridge loan to the City, to which she stated that as yet Linc has not received the funds. Agencymember Yost made reference to page five, paragraph H -5 of the Summary, his understanding being that there was the $1 million bridge loan and the other $1 million was a grant. Chairman Campbell said she believed that the $1 million was the bridge loan and there was $900,000 of closing costs for the Trailer Park. Mr. Soo -Hoo stated that was not clear co them upon review of the documents, it appeared there was the $1 million bridge loan and another $1 million loan on a bridge loan basis, that is something that probably needs to be further clarified with the Agency finance staff as co whether it is actually a loan or a grant. Chairman Campbell explained that the Trailer Park was like any other closing, in this case the residents of the Park did not have the money for the closing costs, the bonds that they could qualify were maxed at six and a half, that is where the MPROP brought them up to the purchase price and the Agency paid the closing costs, it was an acceptable use for that money. Mr. Soo -Hoo said if it was in fact a grant then it would not be repaid back to the housing fund, the only element would be the $1 million bridge loan. Page Ten - Redevelopment Agency Minutes - September 23, 2002 Mr. Soo -Hoo said he wished to bring some closure to their initial presentation by dealing with the excess surplus, as mentioned previously $668,000 of excess surplus penalties were assessed as a result of the excess identified in 2001 of June, his understanding that the plan for repayment of that penalty is coming out of available tax increment revenues for the next ten years at $70,000, at this juncture there are, to their knowledge, no other excess issues that are surrounding this Project however the $668,000 would have to be obligated or committed prior to the Redevelopment Plan closing itself down. One of the things outlined in the staff memo is that if the Agency were to pursue these considerations the obligations would have to revert back to the City General Fund, particularly the funding of the West End Pump Station as well as the improvements to the City Yard, this is something that can not be fully addressed in just one session of the Agency but it is something that should be seriously considered because as he understands it these improvements are necessary in order for the replacement to take place of the Pump Station in particular. Agenc_vmember Antos said he wished to pose a question, it may be a reason for the recommendation to retain a bond counsel, the bonds are to be paid off over a period of time with principal and interest involved, is it known if there are prepayment penalties, if there was a proposal to pay them off today would all of the interest over the long period of time be due, or is there a way to pay them off early. Mr. Soo -HOO said at the time the Agency issued the bonds there were likely some redemption provisions set forth and agreed to when the bonds were issued, there are specific provisions as to when the Agency could, at the earliest, make provision for repayment, his understanding is, and he can confirm, that it would be 2004, if that is the case the City can not really take action in terms of repayment of the early retirement of the bonds until that time actually transpires, at that juncture a decision can then be made as to whether or not the Agency chooses to fully retire the bonds, the proposal that their firm is setting forth is simply saying that everything is status quo, that the Agency continues to receive the tax increment regardless of the effectiveness of the Redevelopment Plan, with the combination of the use of unspent proceeds, possibly land sale proceeds, and the tax increment monies there should be enough monies available to be able to retire the bonds at their appropriate time, obligations, and periods. With regard to Zoeter Place the Executive Director said he has reviewed the Zoeter Place documents, an issue has been raised as to how the Rodi Family Trust issue of purchase rights came about, and clarified that it started about August of 1995, well before City Manager Till was involved, the issue at hand was the option to purchase provision and why it was in the document, review of the records indicate that it was put forth because it would help the Rodi Family to finance the property, that has been made an issue a Page Eleven - Redevelopment Agency Minutes - September 23, 2002 number of times and there needs to be a clear record of how it occurred.• Agencymember Yost inquired if they do actually have a first right of refusal. The Executive Director confirmed that they do, the consultant is correct that the time period is June through December of 2004. Agencymember Yost then asked if it is possible to sell the site prior to that period of time. Chairman Campbell offered that there could be legal- repercussions as you could not take his right to purchase from him. The Executive Director offered that someone could look at that issue. Ms. Murphy pointed out that the City could sell the property but it would be subject to the Rodi Trust option to purchase. Agencymember Antos made reference to the staff report in which it stated the City Yard was built in the 1960's, the property was purchased about 1976 so the Yard and Police Station could not have been built before that time, that needs to be corrected. Councilman Antos said before decisions are made he had some questions. In reference to page six of the Executive Summary he noted that the Agency has been penalized $668,000 for having excess monies in its housing fund as of June, 2001, on page five it states that the Agency and Linc provide a grant for rental assistance to the Trailer Park for a period of twenty years to the maximum of $180,000 per year, his question is if that money could be from the housing setaside, if it could then how could the Agency would be penalized if $180,000 is being used per year to preserve low and moderate income housing within the City. The City Attorney pointed out that the City is no longer being penalized, the penalty was set in 2001, and the way that staff has determined to come up with the money to pay the penalty is the $180,000 per year, that is how the penalty established in 2001 is being satisfied. Agencymember Antos offered that before the Agency can make any final decisions on this matter as far as how to proceed, more needs to be known about the ramifications for payoff of any bonds, an appraisal of the Zoeter property, specifically the commercial frontage, the value needs to be known given the option in 2004 or go forward to purchase it, if sold then the ramifications would be known on any payoffs and if there would be any money left over to do some of the other capital projects, these things need to be known 'before any rational decision can be made. Agencymember Larson said in his opinion this needs to be studied much more before any decision is made, there are a lot of figures, some are puzzling, he would want to know what the net cost to the City General Fund will be, example would be that if the Agency is dissolved then General Fund money would be needed for the pump station, they have measured that from the reserves yet when the budget was adopted it was known that the reserves would be gone by next year, if the Pump Station was funded that would be from a non - existent reserve, then there would be the issue of raising money where the Council no longer has a legal way to raise more money. Agencymember Larson said he would like to analyze this more, ask questions, and determine what the net result will be when this is done, the other side of the issue is the County, assuming the County Page Twelve - Redevelopment Agency Minutes - September 23, 2002 • Redevelopment Agency could take over the Agency obligations,'as was suggested by a member of the audience, if they were to do that then the Redevelopment Agency of the County, far away from Seal Beach, would be making the decisions on low cost housing in this City, the residents find it easy to make their wishes known at Council meetings but if decisions are being made elsewhere it will not be easy, he would like those answers before anything is done. He reminded that the City has had an Agency for many years, if the determination is to dissolve the Agency then it needs to be known what it is going to cost, if it is going to cost General Fund money that will take away from those things that it is known that General Fund money will need to be spent on like Police, Fire, Lifeguards, recreation, parks, streets, sidewalks, etc., his feeling is that then it has to be looked at to see if it is something that the City really wants to do. Agencymember Larson said under other laws, as he understands them, the City would still need to provide low to moderate cost housing whether there is a Redevelopment Agency or not. Agencymember Larson said he would move that this matter be continued for a month at least. Agencymember Yost agreed, seconded the motion, possibly obtain some opinions, also see what options are available from the County, not just in terms of them taking over the Redevelopment Agency but also exploring the option of them absorbing the debt service in return for the tax formula being reinstated on those properties. Chairman Campbell asked where the money is coming from for the consultants and future bond counsel to pursue this issue further, she does not want General Fund money spent. The response was that it will be Redevelopment Agency money. Being a numbers person, Chairman Campbell said in looking at the numbers she can not get optimistic, nor was she optimistic going in as she met with the Finance Director, looked at the numbers and determined that there was no way that this could be done, she would not support pursuing it, this should be a receive and file item. She stated she would not object to dissolving the Surfside Project but as far as the Riverfront Redevelopment Agency is concerned there will be a significant loss of revenue, what is the General Fund going to gain, it will be nothing, now it needs to be determined how all of this is going to be paid for, she objects to spending any more money pursuing this, she can not see how it can be done. Agencymember Larson said his first reaction was that maybe that is true but there is considerable money that has gone into this and he would like to know for sure. Agencymember Yost requested that the motion to do additional study and continue the Riverfront Project item for a month be amended to pursue the dissolution of the Surfside Redevelopment Project as a matter of good faith provided that that would not have any negative financial repercussions. Agencymember Larson accepted the amendment. Page Thirteen - Redevelopment Agency Minutes - September 23, 2002 Agencymember Doane mentioned that there are some small bungalows in 'Surfside that would qualify for low to moderate housing rehabilitation. Chairman Campbell suggested that possibly the Surfside Project should be held up until the housing stock can be looked at. With that the amendment to the original motion was removed. The original motion was restated, that the Riverfront Redevelopment Project issue be continued for approximately one month, and separately, that the issue of the Surfside Project Area be looked into with a report back to the Agency. The Executive Director inquired if the motion would include retaining the necessary consultants to work with the County and look further at dissolution, the response was yes. As a point of clarification the issues to be looked at further would be can the bonds be called, paid off early, is there an arbitrage problem. Added to that list was the value of the Zoeter property, and to that it was pointed out that that will require the hiring of an appraiser, etc. AYES: Antos, Doane, Larson, Yost NOES: Campbell Motion carried Chairman Campbell clarified that her no vote was for the reason that she is against spending any more money because she does not see that it will be positive. Chairman Campbell stated that there are other issues regarding the Redevelopment Agency that she would like to pursue, recently there were two letters to the editor in the local paper, she would like to clear up some of the comments, basically the Agency members were accused of being crooks, the Agency was referred to as being a slush fund for developers, investors, consultants, etc., a comment was that Seal Beach is the only one left for redevelopment to ravage, the response was that there is no desire to ravage Seal Beach, it was said the members of the Agency should be investigated, question was for what, and stated that the referenced letters contained a lot of erroneous statements. A member of the audience responded that there are people who think the members of the Agency are crooks because of the Trailer Park by stating that the residents would own the Park, that should have been in writing, a slush fund is money that does not go into the City coffers, the tax increment is taxpayer money, that money should be going to the City General Fund, people voted for Prop 218 and would be outraged if they knew that their tax dollars were not being voted on, and claimed to not be the author of the letters. APPROVAL OF MINUTES Yost moved, second by Larson, to approve the minutes of the April 22nd and May 28th, 2002 minutes. AYES: Antos, Campbell, Doane, Larson, Yost NOES: None Motion carried • Status Report re: Dissolution of Redevelopnzent Agency Redevelopment Agency Staff Report February 28, 2005 ATTACHMENT 7 MEMORANDUM TO KEYSER MARSTON RE: PROVISION OF DOCUMENTS - DISSOLUTION OF AGENCY STUDY, JUNE 12, 2002 Dissolution of Agency, Phase II.RDA Staff Report 2 20 L c w L ; • PLANNING DEPARTMENT *lc CO 21.0 • U" �� memorandum To: Greg Soo -Hoo, Keyser Marston Associates, Inc. Nichole Murphy, Murphy & Davis LLP Attention: John B. Bahorski, City Manager Pam Arends -King, Director of Administrative Services From: Lee Whittenberg, Director of Development Services Date: June 12, 2002 SUBJECT: PROVISION OF DOCUMENTS - DISSOLUTION OF REDEVELOPMENT AGENCY STUDY Provided are the following requested documents, based on your review of Agency and City files on June 11, 2002: ❑ REDEVELOPMENT AGENCY DEED and EASEMENT DOCUMENTS ❑ Corporation Grant Deed —City of Seal Beach to Redevelopment Agency of the City of Seal Beach, executed on March 30, 1972 and recorded on April 13, 1972 (Electric Avenue Greenbelt). ❑ Cancellation of Taxes Letter, dated June 15, 1976 ❑ Grant Deed — Southern Pacific Transportation Company to Redevelopment Agency of the City of Seal Beach, executed on November 1, 1974, and recorded on November 27, 1974 (Electric Avenue Greenbelt) ❑ Cancellation of Taxes Letter, June 15, 1976. ❑ Grant Deed — Seal Pacific Company, Ltd., to Redevelopment Agency of the City of Seal Beach, executed on November 8, 1974, and recorded on November 27, 1974 (Electric Avenue Greenbelt) ❑ Cancellation of Taxes Letter, June 15, 1976. ❑ Grant of Easement - Redevelopment Agency to Southern California Edison Company, executed on September 29, 1975. No recording date indicated (Electric Avenue Greenbelt). C:\My Documents\RDA\Dissolution Study Documents Memo.doc\LW \06 -12 -02 Provision of Documents Memorandum Dissolution of Redevelopment Agency June 12, 2002 ❑ Corporation Grant Deed - Rockwell International Corporation to Redevelopment Agency of the City of Seal Beach, executed on February 23, 1976 and recorded on February 27, 1976 (Police/Maintenance Yard Facility). ❑ Cancellation of Taxes Letter, June 15, 1976. ❑ Grant of Easement - Redevelopment Agency to Southern California Edison Company, executed on January 24, 1977 and recorded on March 10, 1977 (Electric Avenue Greenbelt). ❑ Grant of Easement - Redevelopment Agency to Southern California Edison Company, executed on April 25, 1977 and recorded on May 6, 1977 (Electric Avenue Greenbelt). ❑ Grant Deed, executed on May 8, 1978 and recorded on June 30, 1978, (Portion of Seal Beach Trailer Park Land, granted from City to Agency, and subsequently conveyed to Riverbeach Associates, owner of Trailer Park). .❑ Grant of Easement - Redevelopment Agency to Southern California Edison Company, executed on October 31, 1989 and recorded on November 9, 1989 (Zoeter Place). ❑ Redevelopment Agency Resolution No. 90 -2, Authorizing Conveyance of Certain Property to the City of Seal Beach, adopted on November 26, 1990 and recorded on March 7, 1991 (Electric Avenue Greenbelt) ❑ Exhibit A - Corporation Grant Deed. ❑ OLD CITY HALL - PURCHASE OF LEASEHOLD INTEREST ❑ City Council Staff Report re: Purchase of Leasehold Interest, Old City hall, dated April 9, 2001. ❑ Recorded Assignment of Lease and Subleases, recorded on August 27, 2001. ❑ Assignment of Leasehold Interest, dated August 27, 2001. ❑ Transmittal Document from First American Title Insurance Company, dated August 28, 2002, including: ❑ Certified Copy of Buyer's Statement. ❑ Certified Copy of Order Authorizing Sale. ❑ Certified Copy of Assignment of Lease and Subleases. ❑ ELECTRIC AVENUE GREENBELT RECONVEYANCE ❑ Redevelopment Agency Resolution No. 90 -2, Authorizing the Conveyance of Certain Property to the City of Seal Beach, adopted November 26, 1990, recorded on March 7, 1991. ❑ Exhibit A, Corporation Grant Deed. ❑ City Council Resolution No. 3997, Authorizing the Acceptance of Certain Property Conveyed by the Redevelopment Agency of the City of Seal Beach, adopted -- November 26, 1990, recorded on March 7, 1991. ❑ Exhibit A, Corporation Grant Deed. ❑ Transmittal Letter from Richards, Watson & Gershon, dated May 13, 1991, providing: ❑ Substitution of Trustee and Full Reconveyance, dated April 19, 1991. ❑ Installment Note Secured by Deed of Trust, executed November 26, 1974, stamped "Paid in Full ". 2 Dissolution Study Documents Memo Provision of Documents Memorandum Dissolution of Redevelopment Agency June 12, 2002 • ❑ MARY WILSON LIBRARY, ORANGE COUNTY LEASE ❑ City Manager's Note re: Library Lease, Agenda Item # D( B, no date. ❑ Transmittal letter from County of Orange, dated August 18, 1976, providing: ❑ Minutes of the Board of Supervisors, dated August 10, 1976. ❑ Lease — Seal Beach Library, dated August 10, 1976. ❑ Exhibit A — Library Site, City of Seal Beach. ❑ ZOETER PLACE — PURCHASE AND LEASE DOCUMENTS ❑ Memorandum of Lease between Los Alamitos Unified School District and City of Seal Beach, dated January 1, 1987: ❑ Promissory Note Secured by Deed of Trust, dated September 1, 1987. ❑ Agreement between Los Alamitos Unified School District and City of Seal Beach, dated January 1, 1987. ❑ Master Lease, Redevelopment Agency of City of Seal Beach and Gemtel Corporation, dated November 30, 1987: ❑ Exhibit A — Legal Description of Premises. ❑ Exhibit B — Site Plan of Premises. ❑ Exhibit C — Legal Description of Parking Lot. ❑ Exhibit D — Parking Easement Agreement, executed, but no date on agreement. ❑ Transmittal Letter from Richards, Watson & Gershon to City Clerk re: Purchase and Sale Agreement and Escrow Instructions, letter dated December 4, 1987: ❑ Purchase and Sale Agreement and Escrow Instructions, dated September 1, 1987. ❑ Letter from Richards, Watson & Gershon to Parker and Covert re signatures on Coastal Commission Deed Restriction (condition of Coastal Development Permit), dated March 9, 1989. ❑ Deed Restriction pursuant to Coastal Commission condition of Coastal Development Permit, unexecuted copy. ❑ First Amendment to Master Lease, dated August 31, 1989. ❑ Transmittal Letter from City Clerk to Richards, Watson & Gershon re: Subordination Agreement, letter dated October 3, 1989: ❑ Redevelopment Agency Staff Report re: Subordination Agreement, Zoeter Place Associates, Coastal Permit # 5 -88 -731, dated September 21, 1989. ❑ Subordination Agreement, dated May 5, 1989. ❑ Second Amendment to Master Lease, dated January 29, 1992 ❑ Third Amendment to Master Lease, dated March 28, 1996 ❑ Exhibit A — Amendment to Parking Easement Agreement (Not Executed) o SEAL BEACH TRAILER PARK ACQUISITION/FINANCING DOCUMENTS ❑ $6,750,000 City Of Seal Beach Redevelopment Agency Mobile Home Park Revenue Bonds (Seal Beach Mobile Home Park Project) Series 2000A ❑ Closing Index o Indenture of Trust between the Agency and the Trustee. o Loan Agreement among the Agency, the Borrower and the Trustee. 3 Dissolution Study Documents Memo Provision of Documents Memorandum Dissolution of Redevelopment Agency June 12, 2002 ❑ Regulatory Agreement and Declaration of Restrictive Covenants among the Agency, the Borrower and the Trustee. ❑ Administration Agreement among the Agency, the Borrower and the Oversight Agent/Program Administrator. ❑ First Deed of Trust of the Borrower. ❑ Loan and Grant Agreement between the Agency and the Borrower. ❑ Agency Regulatory Agreement between the Agency and the Borrower. ❑ Bridge Loan Agreement between the Agency and the Borrower. ❑ Resolution No. 00-4 of the City of Seal Beach Redevelopment Agency adopted November 13, 2000, Authorizing the Issuance of its Not to Exceed $7,000,000 aggregate principal amount of Mobile Home Park Revenue Bonds (Seal Beach Mobile Home Park Project) and Approving Certain Documents and Authorizing Certain Actions in Connection Therewith. ❑ Resolution No. 00 -5 of the City of Seal Beach Redevelopment Agency adopted November 13, 2000, approving as to Form and Authorizing the Execution and Delivery of Certain Documents, Making Certain Findings and Authorizing Other Matters Relating Thereto (Seal Beach Mobile Home Park Project). ❑ Issuer's Instructions to Trustee. ❑ Tax Certificate of Issuer and Borrower, together with Certificates of Underwriters, Investment Agreement Provider and Investment Agreement Broker; IRS Form 8038. ❑ Bridge Loan Note. ❑ Continuing Disclosure Agreement between the Borrower and the Trustee. ❑ Specimen Note Given Pursuant to the Loan Agreement. ❑ Agency Deed of Trust ❑ Official Statement. ❑ Title Insurance Policy in favor of Trustee. * * * * • 4 Dissolution Study Documents Memo Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report February 28, 2005 ATTACHMENT 8 REDEVELOPMENT AGENCY STAFF REPORT RE: "CONSIDERATION OF CONSULTANT SERVICES - DISSOLUTION OF REDEVELOPMENT AGENCY", MAY 28, 2002 Dissolution of Agency, Phase II.RDA Staff Repoli 2 21 r r o ti AGENDA REPORT DATE: May 28, 2002 • . • • TO: Chairperson and Members of the Redevelopment Agency • • THRU: John B. Bahorski, Executive Director FROM: Lee Whittenbere, Director of Development Services SUBJECT: CONSIDERATION OF CONSULTANT SERVICES — DISSOLUTION OF REDEVELOPMENT AGENCY SUMMARY OF REQUEST: If Agency determines to proceed with consideration of dissolution, select preferred firm and authorize the Executive Director to negotiate and execute the contract in accordance with the proposal of the selected consultant; adopt Resolution No. C m - , A Resolution of the Redevelopment Agency of the City of Seal Beach Authorizing Budget Amendment Number 23 for the 2001 -2002 Fiscal Year. BACKGROUND: On April 22, 2002, the Agency directed staff to request proposals for potential dissolution of the Redevelopment Agency. On April 23 and 25, 2002 the Director of Development Services distributed several letter requests for proposal to evaluate the benefits and detriments of the dissolution of the Redevelopment Agency. The requested scope of services was to include the process, financial impacts, and other issues of concern regarding the potential dissolution of the Agency. Excerpts of the California Redevelopment Law are provided as Attachment 1 that directly relates to the contemplated action of the Agency. The Davis Company submitted a letter response indicating "we think that unless the City is willing to assume the financial obligations of the agency as set forth in Health & Safety Code Section 33141 and the housing obligations stated in Section 33333.8'a) the study • you requested is not needed and therefore not recommended." A copy of the Davis Company Letter is provided as Attachment 2. Agenda Item 3 C:\tvly Documents \RDA \Dissolution of Aeencv.RDA Statt Repor:.doc\LW\O5 -23 -02 Consideration of Consultant Services — Dissolution of Redevelopment Agency Redevelopment Agency Staff Report May 28, 2002 The following firns responded to the targeted RFP (See Attachments 3 and 4, respectively,.. for a copy of the complete proposal), with proposed budget noted in parenthesis: • ❑ Keyser Marston Associates, Inc. (S 14,000.00) • ❑ A. C. Lazzaretto & Associates (S 25,000.00) Interviews were held with the two responding firms on May 21, 2002. Based on those interviews staff has requested submission of letter proposals from each finn reducing the scope of work in the initial stage to an evaluation of potential fiscal impacts to the Agency and/or City relating to: ❑ Projected loss of tax increment revenues to the A gency. ❑ Identify outstanding Agency obligations. ❑ Identify how the outstanding Agency obligations are to be funded. ❑ Determine how unspent bond proceeds can be spent. ❑ Determine how existing excess surplus housing penalties can be funded. ❑ Disposition of existing properties owned or leased by Redevelopment Agency. Both firms have submitted letter proposals for the above - indicated scope of work and those are provided with the initial proposals for the infonnation of the Agency Board members. The revised scope of work budgets set forth in the letter proposals are: p Keyser Marston Associates, Inc. ($ 11,500.00, first phase: $20,600 total) ❑ A.. C.Lazzaretto & Associates ($ 17,500.00, first phase) In the opinion of the interview board, either of the responding firms can prepare the requested analysis regarding potential dissolution of the Agency. If the Agency determines to proceed with consideration of dissolution, the Agency should determine which firm would be appropriate to provide the requested analysis for future Agency consideration, and authorize the Executive Director to negotiate and execute the contract in accordance with the proposal of the selected consultant. Representatives of both firms are present and available to respond to questions of the Agency. Reauested Budget Amendment: If the Agency determines to proceed with consideration of dissolution it will be necessary for the Agency to authorize a budget amendment for the unanticipated consultant expense. Funds are available in the Redevelopment Agency Fund Balance, Account Number 063- 000 -30420 and will be spent out of the Redevelopment Agency contract professional services account. Staff has prepared the appropriate resolution and it is provided as Attachment 6. The resolution has been prepared to reflect the maximum proposal amount under consideration, assuming the Agency determines to proceed to the stage of formal public hearings and dissolution of the,Redevelopment Agency. FISCAL IMPACT: Dissolution of Agency.RDA Staff Report 2 Consideration of Consultant Services — Dissolution of Redevelopment Agency Redevelopment Agency Staff Report May 28, 200 The proposed study would determine if adverse impacts to the City General Fund would. be created if the Agency were to be dissolved. RECOMMENDATION: If Agency determines to proceed with consideration of dissolution, select preferred firm and authorize the Executive Director to negotiate and execute the contract in accordance with the proposal of the selected consultant; adopt Resolution No. G&.- - , A Resolution of the Redevelopment Agency of the City of Seal Beach Authorizing. Budget Amendment Number 28 for the 2001 -2002 Fiscal Year. NOTED AND APPROVED: At 1 1111, Whittenberg Jo i. Bahorski Director of Development Servi cutive Director Attachments: (6) • Attachment 1: Health and Safety Code — Applicable Sections Attachment 2: Dissolution of Redevelopment Agency, The Davis Company, letter dated May 15, 2002 Attachment 3: Letter Proposal dated May 22, 2002 and Proposal for Dissolution Services, Keyser Marston Associates, Inc., dated May 2002 Attachment 4: Letter Proposal dated May 23, 2002 and Evaluation of Proposed Redevelopment Agency Dissolution, A. C. Lazzaretto & Associates, dated May 10, 2002 Attachment 5: Request for Proposal re: Dissolution of Redevelopment Agency, City letter dated April 25, 2002 Attachment 6: Resolution No. 402 — �', A Resolution of the . Redevelopment Agency of the City of Seal Beach Authorizing Budget Amendment Number 28 for the 2001 - 2002 Fiscal Year ' . Dissolution of Aeency.RDA Staff P,eport 3 Consideration of Consultant Services — Dissolution of Redevelopment Agency Redevelopment Agency Stag Report May 28, 2001 ATTACHMENT 1 HEALTH AND SAFETY CODE - APPLICABLE SECTIONS § 33141. Upon the motion of the legislative body or upon recommendation of the agency, the legislative body of the community may, by ordinance, order the deactivation of an agency by declaring that there is no need for an agency to function in the community, if the agency has no outstanding bonded indebtedness, no other unpaid loans, indebtedness, or advances, and no legally binding contractual obligations with persons or entities other than the community, unless the community assumes the bonded indebtedness, unpaid loans, indebtedness, and advances, and legally binding contractual obligations. A legislative body shall not adopt an ordinance declaring that there is no need for the agency, if in one or more project areas, the agency has not complied with subdivision (a) of Section • .3.»x.).8. An ordinance of a legislative body declaring there is no need for an agency to function in the community shall be subject to referendum as prescribed by law for the ordinances of the legislative body. § 33333.8. (a) Every redevelopment agency shall comply with and fulfill its obligations with regard to the provision of affordable housing as required by this part prior to the time limit on the effectiveness of the redevelopment plan established pursuant to Sections x.3.3.3.3.2 and .3i.3.3.3.6. A legislative body shall not adopt an ordinance terminating a redevelopment project area if the agency has not complied with • subdivision (a) of Section 33413 with respect to replacement housing, subdivision (b) of Section 33413 with respect to agency developed housing and project area housing, and Section 33333.12 with respect to excess surplus funds. (b) If, on the date of the time limit on the effectiveness of the redevelopment plan, a redevelopment agency has not complied with subdivision (a), the time limit on the effectiveness of the redevelopment plan shall be suspended and the agency shall use all tax increment funds that are not pledged to repay indebtedness to comply with subdivision (a). If, on the date of the time limit on the repayment of indebtedness, the agency has not complied with subdivision (a), the time limit on the repayment of indebtedness shall be suspended and the agency shall receive and use tax increment funds to comply with subdivision (a). Dissolution of Agrncy FDA stab' .. °.epon 4 Consideration of Consultant Services — Dissolution of Agency Redevelopment Agency Staff Report May 28, 2002 (c) If on the date of the time limit on the repayment of indebtedness,- - the agency has complied with its obligations under subdivision (a) and has . moneys remaining in the Low and Moderate Income Housing Fund, the agency shall transfer the remaining moneys to a low and moderate income • housing fund for a different project area within the agency's jurisdiction, if one exists, or if a different project area does not exist, the agency shall either transfer the remaining moneys to a special fund of the community or to the community or county housing authority. The community or county housing authority to which the remaining moneys are transferred shall utilize the moneys for the purposes of, and subject to the same restrictions that are applicable to, the redevelopment agency under this part. (d) If a redevelopment plan provides a limit on the total amount of tax increment funds that may be received by a redevelopment agency for any project area, and if that limit is reached prior to the agency complying with its obligations pursuant to subdivision (a), that limit is suspended and the agency shall receive and use tax increment funds until the agency has fully complied with its obligations. • (e) If an agency fails to comply with its obligations pursuant to this section, any person may seek judicial relief. The court shall require the agency to take all steps necessary to comply with those obligations, • including as necessary the adoption of ordinances, to incur debt, to obtain tax increments, to expend tax increments, and to enter into contracts as necessary to meet its housing obligations under this part. • * * * * Dissolution of Ag:ncy.RDA Staff Report 5 Consideration of Consultant Services — Dissolution of Redevelopment Agency Redevelopment Agency Staff Report May 28, 2002 • ATTACHMENT 2 • DISSOLUTION OF REDEVELOPMENT. AGENCY, THE DAVIS COMPANY, LETTER • DATED MAY 15, 2002 • • Dissolution of Aeency.RDA Stab' Report 6 S The Davis Company MICIIAEI. DAVIS AMrs D. WILLIAMS OF SEAL BEACH': MAY 2 0 2002 May 15, 2002 DEPARTMENT OF DEVELOPMENT SERVICES Mr. Lee Whittenberg Director of Development Services City of Seal Beach 211 Eighth Street Seal Beach, CA 90740 -6379 DISSOLUTION OF REDEVELOPMENT AGENCY Dear Lee: Regarding the dissolution of the Redevelopment Agency we have reviewed the applicable statutes which are summarized below as well as the Implementation Plan and other materials which were sent to us. Auencv Dissolution/Deactivation • Article 4 of the Redevelopment Law (Health and Safety Code sections 33140 et seq.) sets forth the procedure for dissolving and deactivating a redevelopment agency. In order to deactivate the agency, (a) the legislative body must adopt an ordinance making certain findings regarding the redevelopment agency; and (b) the agency must have complied with Health and Safety Code section 33333.8(a). 1. Adoption of Ordinance with Findings. The Agency must assemble evidence sufficient to support the findings that must be made prior to deactivating the agency, as set forth in Health and Safety Code Section 33141, namely that: 1. there is no need for the agency to function in the conununity; 2. the agency has no outstanding bonded indebtedness, or unpaid loans, indebtedness, or advances; 3. the agency has no legally binding contractual obligations with persons or entities other than the community. As an alternative to the findings set forth above, the agency may deactivate itself if the city agrees to assume all outstandin• bonded indebtedness unpaid loans indebtedness and advances and all ]esally binding contractual obligations. 2. Compliance with Section 33333.8(a). Pursuant to Section 33333.8(a), every redevelopment agency must comply with and fulfill its obligations with respect to the provision of affordable housing prior to the expiration of the redevelopment plan. Further, an agency may not terminate a project area or deactivate the agency unless the agency has fully complied with Section 33413 with respect to replacement housing, and agency developed housing and project area housing; and with Section 33334.12 with respect to excess surplus funds. DOCS OC \895 566x2\29999.0000 160] Response Road. Suite 380. Sacramento. CA 95315 916.56 7.9510 TEL. 916.567.9540 FA) •11111 T .... A......1.... rA nnrrK 2tn A - 4 1 ,57 •■■, 41n 1174 0114.1 r. ,. • Redevelopment Plan Termination Before terminating the redevelopment plan, it will be necessary to carefully examine the project implementation documents to ensure that no outstanding debts are impaired. If there is.any outstanding debt, the Agency will need to review the agreements accompanying the debt to determine whether there is any implied or express covenant to keep the project intact, and to continue receiving tax increment. There may also be statutory requirements regarding outstanding debt, although there do not appear to be any provisions in the redevelopment law which specifically tell agencies how to treat outstanding indebtedness upon the termination of an active redevelopment plan; however, in the present case, we assume that along with the concurrent agency deactivation, the city would assume the debt of the redevelopment project after the project is terminated. While the Redevelopment Law does not specifically describe a procedure for terminating a redevelopment plan, it does set forth procedures for amendment of redevelopment plans. One procedure may be used for the modification of a redevelopment plan which would change the boundaries of the project area to exclude land from the project area (Health and Safety Code Section 33450 et seq.). Arguably, the termination of a redevelopment plan is the equivalent of deleting all of the territory from a redevelopment project, so the Redevelopment Agency would anticipate utilizing this procedure for the plan termination. The "Report to City Council" which is required for plan adoptions must also be prepared for the plan amendment and made available to the public prior to the public hearing (Health and Safety Code Section 33457.1). This report includes a wide range of information, including an environmental analysis, fiscal analysis, and other date with respect to the impacts of the proposed plan amendment. The plan amendment must adopted by ordinance of the City Council (Health and Safety Code Section 33450) which contains the applicable findings required for plan adoption ordinances (Health and Safety Code Section 33457.1), and must be transmitted to the County Auditor, County Assessor, affected taxing agencies, and the State Board of Equalization (Health and Safety Code Section 33457). The ordinance should contain the City Council's findings as to why the redevelopment project is no longer necessary, and should specifically direct how any outstanding indebtedness will be assumed. Conclusions Having reviewed the Implementation Plan and the associated documents we think that unless the city is willing to assume the financial obligations of the agency as set forth in Health & Safety Code Section 33141 and the housing obligations stated in Section 33333.8(a) the study you requested is not needed and therefore not recommended. Should you decide that you want to consider the impact of these requirements further we would be pleased to submit a proposal for such services to you. Sincerely, 419i711 James D. Williams DOCSOC1895 5 GGv2129999.0000 Consideration of Services — Dissolution of Redevelopment ,4gencv Redevelopment Agency Staff Report May 28, 2002 • ATTACHMENT 3 LETTER PROPOSAL DATED MAY 22, 2002 AND PROPOSAL FOR DISSOLUTION SERVICES, KEYSER MARSTON ASSOCIATES, INC., DATED MAY 2002 Dissolution of Aaency.RDA Staff Report 7 CITY OF SEAL BEACH K E Y S E R M A R S T O N ASSOCIATES INC. ADVISORS /N: REAL ESTATE - 500 SOUTH GRAND AVENUE, SUITE 1480 MAY ?UV_ REDEVELOPMENT - Los ANGELES, CALIFORNIA 90071 AFFORDABLE HOUSING PHONE: 213/622 -8095 ECONOMIC DEVELOPMENT Fax: 213/622 -5204 DEPARTMENT OF FISCAL IMPACT DEVELOPMENT SERVICES INFRASTRUCTURE FINANCE VALUATION AND LITIGATION SUPPORT • Los Angeles Calvin E. Hollis, II Kathleen H. Head May 22, 2002 James A. Rabe y + Paul C. Anderson Gregory D. Soo -Hoo San Diego Gerald M. Trimble Paul C. Marra Mr. Lee Whittenberg Director of Development Services SAN FRANCISCO A. Jerry Keyser City of Seal Beach Timothy C. Kelly Eighth Street - Kate Earle Funk 211 Ei g Robert J. Wetmore Seal Beach, California 90740 -6379 Debbie M. Kern Re: Supplemental Proposal Dear Mr. Whittenberg: We appreciated the opportunity to meet you and the interview panel yesterday and found it beneficial to have you clarify the City's request for proposals. Pursuant to your request and based upon the additional scope of services requested by the City, Keyser Marston Associates, Inc. (KMA) and Murphy & Davis LLP (M &D) are providing for your review this Supplement Proposal to our original May 10, 2002 proposal for the dissolution of the redevelopment agency. As described below, our team proposes to provide a Phase 1 scope of services outlined in this Supplemental Proposal for a total cost of $11,500. If the Council decides to move forward with - the termination of the redevelopment projects and dissolution of the Agency (referred to as Phase 2), these additional services would be the same as those defined in our original scope of services dated May 10, 2002. The exception would be the exclusion of Task 2, Financial Feasibility Analysis that is now being incorporated in the supplemental work scope described below. In addition, M &D would be reviewing the documents and conclusions contained in this Phase 1 Supplemental Scope that will reduce review and consultation time for the Task 4, Report to the City Council outlined in the May 10 proposal. In total, the budget from the original May 10 proposal would be reduced from $8,000 for KMA to $4,500, and for M& D from $6,000 to $4,500. The combined total for both scopes of work (Phase 1 and Phase 2) would be $20,500 as summarized below: PA0205013 KMA:PA'gbd 99900.000.002 Mr. Lee Whittenberg May 22, 2002 City of Seal Beach Page 2 KMA M &D Total Phase 1 — Supplemental Proposal 1 $7,000 $4,500 $11,500 Phase 2 — Termination of Projects and Agency (May 10, 2002 proposal, as modified to remove Task 2) $4,500 $4,500 $9,000 Total Budget $11,500 $9,000 I $20,500 Supplemental Work Scope (Phase 1 Services) KMA and M &D will provide the following Phase 1 scope of services as requested by the City: 1. Prepare a Tax Increment Revenue Projection KMA would conduct a review and analysis of the Agency's two Redevelopment Plans, the Implementation Plan and the Agency's audited financial statements for the most recent fiscal year to analyze the effect of the termination of the Redevelopment Plans. KMA will identify potential tax increment that would not be accrued if the Plans were terminated. This would include identifying future tax increment that would accrue to the City and other taxing agencies in the absence of the redevelopment projects. The tax increment revenue projection will incorporate assumed future year valuation increases due to new development or property transfers of ownership (if specifically identified by City staff), as well as consideration of plan limitations set forth under existing Redevelopment Law. The projected tax increment revenues will also identify the amount of Housing Set Aside funds that would not accrue under such a scenario. 2. Identify Outstanding Agency Obligations KMA and M &D will review existing Agency obligations and contracts, including bonded indebtedness obligations or repayment of any other financing mechanisms that may be incurred within the Project Area. City staff must provide all background information related to such obligations, including such documentation as the Agency's CIP and annual budgets, audited financial statements, statements of indebtedness, bond debt service payment schedules, owner participation agreements or development and disposition agreements, etc. in which tax increment revenues are obligated. 3. Identify How the Outstanding Agency Obligations will be Funded Upon such review under Task 2 above, KMA and M &D will state how such outstanding Agency obligations will need to be funded from existing Agency and /or City resources. PA0205013. KMA:PA:gbd Mr. Lee Whittenberg May 22, 2002 City of Seal Beach Page 3 4. Describe How the Unspent Bond Proceeds can be Spent M &D will review bond resolutions and provide a description of limitations imposed upon the $2.3 million in unspent tax - exempt net bond proceeds currently on deposit with the Agency. 5. Describe How Existing Housing Penalties can be Funded City staff has indicated that there is a $600,000 affordable housing penalty imposed upon the Agency. KMA & M &D will state how this obligation will need to be funded from existing Agency and /or City resources. 6. Disposition of Existing Agency -Owned Properties M &D will state what will be required to dispose of existing Agency -owned properties if the Projects are terminated and the Agency is dissolved. Specific properties will be provided by City staff. Deliverables KMA and M &D will require a minimum of four (4) weeks to complete the memorandum of conclusion related to the scope of services outlined above, the timing of which will commence at such time that all of the required background documentation is provided to KMA and M &D by the City staff and a signed authorization to proceed letter is transmitted by the City, whichever is later. Fee Amount (Phase 1) KMA and M &D propose to complete the Phase 1 tasks outlined above for a fixed -fee of $11,500, including expenses. This includes a budget of $7,000 for KMA and $4,500 for M &D. The fee amount includes attendance at two (2) meetings: (a) a first meeting with City /Agency staff to review the process and obtain background information, and (b) a second meeting to present the conclusions of the specific items noted in the scope of services above. Additional Services Any additional research, document review, analysis, or meeting time not included in the scope of services outlined above, will be billed as Additional Services at the hourly rates listed below. PA0205013.KMA:PA.gbd 99900 000.002 Mr. Lee Whittenberg May 22, 2002 City of Seal Beach Page 4 KEYSER MARSTON ASSOCIATES, INC. HOURLY FEE SCHEDULE 2002 A. JERRY KEYSER * $ 210.00 MANAGING PRINCIPALS* $ 200.00 PRINCIPALS* $ 185.00 MANAGERS* $ 155.00 SENIOR ASSOCIATES $ 140.00 ASSOCIATES $ 120.00 SENIOR ANALYSTS $ 105.00 ANALYSTS $ 90.00 TECHNICAL STAFF $ 72.50 ADMINISTRATIVE STAFF $ 57.50 Directly related job expenses not included in the above rates are: auto mileage, air fares, hotels and motels, meals, car rentals, taxies, telephone calls, delivery, electronic data processing, graphics and printing. Directly related job expenses will be billed at 110% of cost. Monthly billings for staff time and expenses incurred during the period will be payable within thirty (30) days of invoice date. A charge of 1% per month will be added to all past due accounts. * Rates for individuals in these categories will be increased by 50% for time spent in court testimony. MURPHY & DAVIS, LLP HOURLY FEE SCHEDULE Attorneys $ 175.00 Paralegals $75.00 - $95.00 Extraordinary expenses, such as courier services and express mail, are separately itemized and billed. Routine expenses, such as long distance telephone calls, copying, postage, etc., are not separately itemized but are covered by a two percent (2 %) administrative charge added to each billing. • PA0205013 KMA:PA gbd new-Inn MAIN Mr. Lee Whittenberg May 22, 2002 City of Seal Beach Page 5 As stated in our original proposal, our team will work with City staff to ensure the process will proceed in a timely manner. We appreciate the opportunity to submit this Supplemental Proposal and are - available to answer any questions you may have regarding the scope of services outlined'herein: • Sincerely, K YSER ARSTON ASSOCIATES, INC. MURPHY & DAVIS, LLP • 4 • A reg Soo -Hoo : C. Nicole Murphy . Principal Attorney at Law • • P.A0205013. K1v1A: PA.:gbd KEYSER M A R S T O N ASSOCIATES I N C. ADVISORS IN: REAL ESTATE - 500 SOUTH GRAND AVENUE, SUITE 1480 REDEVELOPMENT Los ANGELES, CALIFORNIA 90071 AFPORDAELE HOUSING . ?HONE: 213/622 -8095 ECONOMIC DEVELOPMENT FAX : 213/622.5204 FISCAL IMPACT INFRASTRUCTURE FINANCE VALUATION AND LITIGATION SUPPORT Los Angeles May 10, 2002 Calvin E. Hollts, II Kathleen. Head James A. Rabe Paul C. Anderson Gregory D. Soo -Hoo Mr. Lee Whittenberg - Son Diego Director of Development Services Gerald M. Trimble Robert J. Wetmore City of Seal Beach Paul C. Marra 211 Eight Street - SAN FRANCISCO Seal Beach, California 90740 -6379 A. Jerry Keyser Timothy C. Kelly Re: Proposal Services for Dissolution of Redevelop ment A enc Fate Earle funk p p g y Debbie M. Kern Dear Mr. Whittenberg: Keyser Marston Associates, Inc. (KMA) and Murphy & Davis, LLP (M &D) are pleased to submit this team proposal to provide services to the City of Seal Beach. The proposed "scope of services provides for feasibility impact analysis and "full" services to assist the City in terminating the City's two redevelopment projects and dissolving the City's Redevelopment Agency. Our team will work closely with staff to ensure the process will proceed in a timely manner,. . which we anticipate to be completed in three months. We appreciate the opportunity to submit this proposal and hope to work with the City. Feel free to call us with any questions or comments at (213) 622 -8095. Sincerely, KEYSER MARSTON ASSOCIATES, INC. MURPHY & DAVIS, LLP .......) . C- 7/(n_:,.4._; Pa e: Anderson C. Nicole Murphy rincipal Attorney at Law • CITY OF SEAL BEACH MAY 1 R 2002 CEF'ARTMENT OF DEVELOPMEiyT CERVICES P 4020 500 3. K M L.:? A:a c 99900.000.0C2/5/10/02 TABLE OF CONTENTS L QUALIFICATIONS AND EXPERIENCE 1 A. KEYSER MARSTON ASSOCIATES 1 • B. MURPHY & DAVIS, LLP 2 • II. SCOPE OF SERVICES : 4 A. BENEFIT/ DETRIMENT FEASIB!LTIY ANALYSIS OF TERMINATION AND DISSOLUTION 4 Task 1 — Blight Analysis - KMA 4 Task 2 — Financial Feasibility Analysis - KMA 5 B. DOCUMENT PREPARATION AND REVIEW 5 Task 1 — Schedule of Actions - M &D 5 Task 2 — Resolutions, Notices, Ordinance, and Responses to Written Objections — M &D and KMA 5 Task 3 — Mailing Notices and Labels - KMA 6 Task 4 — Report to City Council - KMA 6 C. MEETING ATTENDANCE 6 III. SCHEDULE 7 IV. BUDGET 8 • Agency Dissolution Services Proposal City of Seal Beach Page i I. QUALIFICATIONS AND EXPERIENCE A. KEYSER MARSTON ASSOCIATES Keyser Marston Associates, Inc. (KMA) is a full service real estate financial, redevelopment and economic consulting firm specializing in real estate advisory and evaluation services, redevelopment services, and financial analyses. KMA has been serving public agencies and private clients for over 25 years and has one of the largest real estate and redevelopment advisory practices on the West Coast. The majority of KMA assignments involve long- standing client relationships with city and county, governments, including many of California's largest redevelopment agencies. KMA's services fall within the following general areas: • • Real Estate • Redevelopment • Economic Development • Infrastructure Finance • Affordable Housing • Fiscal Impact • Valuation & Litigation Support Since 1973, KMA has been providing redevelopment plan adoption, economic and real estate consulting assistance to cities and redevelopment agencies throughout California. The increased complexities of redevelopment and public/private real estate transactions demands strong technical skills in real estate, economics, redevelopment implementation and public finance. The firm uniquely possesses this combination of skills. • We believe that our firm is uniquely qualified to assist the City of Sacramento through bringing state -of- the -art knowledge concerning project implementation and real estate development into the process. Some of the reasons include: Over 20 years experience in assisting all levels of public sector clients throughout the State in redevelopment project implementation services, public financing, real estate market and evaluation services, and developer selection and negotiation. A unique integration of real estate expertise, redevelopment practice, and a strong public finance background, resulting in fiscal and economic analyses appropriate for redevelopment plan feasibility studies, implementation, fiscal consultant due diligence analysis, and affordable housing financial services. Commitment of principals who are recognized leaders in redevelopment throughout California. The philosophy and structure of our firm results in clients having maximum direct contact with principals. Agency Dissolution Services Proposal City of Seal Beach KMA's ability to be cost effective for our clients given our ability to provide comprehensive services relating to market and financial feasibility, economic analysis, direct implementation experience and public finance without the need for multiple consultants. The increased complexities of redevelopment and real estate transactions demand a strong technical understanding of real estate, redevelopment finance and a keen understanding of California Community Redevelopment Law. The firm possesses this unique combination of skills. The combined knowledge and expertise in these areas has resulted in KMA's ability to provide services, which not only comply with the current policies and practices pertaining to redevelopment, but also are based on a fundamental understanding of real estate markets, valuations and financing. B. MURPHY & DAVIS, LLP Murphy & Davis, LLP (M &D) was established in 1999 to provide legal services to public and private clients in the greater Sacramento area and throughout the State of California. Building on years of experience in Sacramento area law firms and local government, the partners of Murphy & Davis, LLP provide their clients the benefits of seasoned expertise and a thorough understanding of their practice areas. As a small firm, they are able to provide such expertise with a level of responsiveness and flexibility that is uncommon in larger firms. The attorneys at M &D are active in their respective professional associations and trade groups, and contribute as speakers and officers, or publish in trade journals and legal publications. M &D represents redevelopment agencies in both northern and southern California. The practice of one of the firm's partners, C. Nicole Murphy, is focused in redevelopment and related fields such as affordable housing, CEQA, eminent domain, general municipal and local agency law, and residential and commercial real estate development. Before founding the firm in 1999, C. Nicole Murphy worked in redevelopment for over 20 years, first at the Sacramento law firm of McDonough, Holland and Allen, and then in the Law Offices of C. Nicole Murphy. Ms. Murphy's background and experience covers virtually all aspects of redevelopment and related activities, beginning with the creation of redevelopment agencies and the adoption, amendment, or merger of redevelopment projects. The breadth and depth of Ms. Murphy's experience allows her to be sufficiently responsive to provide daily advice and opinions concerning procedural and substantive activities, including Brown Act and . Public Records Act issues affecting the daily operation of agencies. Ms. Murphy has successfully assisted in the implementation of hundreds of redevelopment projects and programs from the negotiation and preparation of acquisition and disposition - agreements with owners and developers for housing, retail, office and industrial Agency Dissolution Services Proposal City of Seal Beach Pane developments (both new construction and rehabilitation projects, and ranging from a single housing unit to major catalyst projects) to workouts and enforcement for troubled projects. Ms. Murphy is also experienced in litigation involving the validity of redevelopment plans, project activities and environmental determinations; condemnation actions; and assessment district foreclosure proceedings. Representative redevelopment clients include Cupertino, Folsom, Hawthorne, Sacramento and San • • Pablo. • • • Agency Dissolution Services Proposal City of Seal Beach Pang - II. SCOPE OF SERVICES Keyser Marston Associates, Inc. (KMA) and Murphy & Davis, LLP (M &D) propose to provide redevelopment plan services to the City of Seal Beach to identify the financial impacts and affects on the remaining blighting conditions (if any) resulting from the termination of the City's two redevelopment projects -and dissolution of the City's Redevelopment Agency. Assuming the City determines to proceed with the termination of the redevelopment projects and dissolution of the Agency, KMA_and M&D will also provide the documentation and assist the City in the legal process related to these actions. KMA and M &D have worked successfully together in the past on redevelopment plan adoptions and amendments, and as such can provide the City with well- integrated documents within a timely manner. The California Community Redevelopment Law does not contain specific procedures for the • early termination of a redevelopment plan, but does contain procedures for amending a redevelopment plan. The early termination of a redevelopment plan is akin to an amendment shortening the life of the plan M &D would be responsible for the overall coordination of the study and termination /dissolution process including preparing and monitoring a schedule of actions, reviewing the report accompanying the, proposed termination of the projects and preparing resolutions and ordinances required in connection with terminating the redevelopment projects and dissolving the Agency. KMA would analyze the financial impacts of terminating the redevelopment projects including addressing remaining blight. A. BENEFIT/ DETRIMENT FEASIBILTIY ANALYSIS OF TERMINATION AND DISSOLUTION Task 1 — Blight Analysis - KMA Based upon the findings in the Implementation Plan and discussions with Agency staff KMA will prepare a description of the remaining blighting conditions in the Project Areas and how these remaining blighting conditions are anticipated to be alleviated following the termination of the redevelopment projects the existing implementation plan. This analysis will be presented to staff at the completion of the feasibility analysis. Assuming that the Council determines to proceed with the termination of the Redevelopment Plans and dissolution of the Agency, this analysis will be incorporated into a report to be considered by the Agency and Council in connection with their actions. • • Agency Dissolution Services Proposal City of Seal Beach Gr,■ A Task 2 — Financial Feasibility Analysis - KMA KMA would conduct a review and analysis of the Agency's two Redevelopment Plans, the Implementation Plan and the Agency's audited financial statements 'for the most: ost• : • recent fiscal year to analyze the effect of the termination of the Redevelopment Plans. • KMA will identify potential tax increment that would not be accrued if the Plans were terminated. This would include identifying future taxes that would accrue to the City in • the absence of the redevelopment projects. The tax increment revenue projection will • incorporate assumed future year valuation increases due to new development or property transfers of ownership specifically identified by Agency staff, as well as consideration of plan limitations set forth under existing Redevelopment Law. The projected tax increment revenues will also be subject to set asides for Low and Moderate Income Housing and allocations to affected taxing entities. KMA would also identify remaining obligations and contracts. This may include repayment of bonded indebtedness or repayment of any other financing mechanisms that may be incurred within the Project Area. Agency staff must provide all background information related to such obligations, including such documentation as the Agency's CIP and annual budgets, audited financial statements, statements of indebtedness, bond debt service payment schedules, owner participation agreements or development and disposition agreements, etc. in which tax increment revenues are obligated. B. DOCUMENT PREPARATION AND REVIEW Task 1 — Schedule of Actions - M &D M &D will prepare a schedule of actions identifying all activities required by law leading to the termination of the Redevelopment Plans and the dissolution of the Agency. The schedule lists actions, responsible parties, scheduled dates and documents to be prepared. This includes schedule updates as necessary. Task 2 — Resolutions, Notices, Ordinance, and Responses to Written Objections — M&D and KMA M &D would prepare all required resolutions and ordinances, together with affidavits of mailing and a procedural outline for the conduct of joint and concurrent public hearings to consider termination of the Plans. M &D will prepare these documents for staff's use. Together M &D and KMA will prepare responses to written objections to the proposed terminations of the Plans and dissolution of the Agency (if any). Agency Dissolution Services Proposal City of Seal Beach Page 5 Task 3 — Mailing Notices and Labels - KMA • KMA will prepare required public notices and provide Agency staff with mailing labels for mailing public notices to property owners, taxing agencies and others, as appropriate, to be notified of the termination of the redevelopment plans and dissolution of the Agency. Using the County Assessor data for the Project Areas, KMA will prepare mailing labels and the associated list to be used for the distribution of the joint public hearing notice for owners. Existing Agency occupant lists or Assessor site addresses-will be used for the occupant mailing list. For staffs reference and use, KMA will also provide staff with a hard copy of the list of taxing agencies, owners and occupants and an electronic file. • Task 4 — Report to City Council - KMA . KMA would prepare a report of the Agency to the City Council describing the reasons for terminating the Redevelopment Plans and dissolving the Agency, as well as information and analysis necessary to support determinations by the City Council that the conditions precedent to termination of the Plans and dissolution of the Agency have been satisfied (Le., no outstanding indebtedness or contractual obligations, completion of all required affordable 'housing activities). M &D will consult with KMA concerning the preparation of the report, including review of background materials and review of a draft of the report, as appropriate. C. MEETING ATTENDANCE Both KMA and M &D would attend an initial meeting with City /Agency staff to review the process and obtain background information and materials and would attend the joint and concurrent public hearings. • Agency Dissolution Services Proposal �cnrh Pane. F • _ III. SCHEDULE It is anticipated that the process could be accomplished within a three -month time period: • . . • Month 1 would involve the initial meeting with staff, review and analysis of background information and materials, and preparation of the feasibility analyses and report of the Agency to the City Council. • Month 2 would involve actions of the Planning Commission (reporting on the proposed Plan terminations), Agency and City Council (approving /receiving the Agency's report and setting joint and concurrent public hearings to consider the Plan terminations). • Month 3.would involve noticing and conducting the joint and concurrent public hearings, and the final actions on the ordinances terminating the Plans and dissolving the Agency. • • Agency Dissolution Services Proposal rJty of SPAT Raarh p.^� 7 N. BUDGET KMA and M &D propose to complete the tasks outlined in Section I for a fixed fee of $14,000, including expenses. This includes a budget of $8,000 for KMA and $6,000 for M &D. Additional services beyond those identified in the scope would be billed at the hourly rates listed below. KEYSER MARSTON ASSOCIATES, INC. • HOURLY FEE SCHEDULE 2002 A. JERRY KEYSER ` $ 210.00 MANAGING PRINCIPALS* $ 200.00 • PRINCIPALS* $ 185.00 MANAGERS* $ 155.00 SENIOR ASSOCIATES $ 140.00 ASSOCIATES $ 120.00 SENIOR ANALYSTS $ 105.00 ANALYSTS $ 90.00 TECHNICAL STAFF $ 72.50 ADMINISTRATIVE STAFF $ 57.50 Directly related job expenses not included in the above rates are: auto mileage, air fares, hotels and motels, meals, car rentals, taxies, telephone calls, delivery, electronic data processing, graphics and printing. Directly related job expenses will be billed at 110% of cost. Monthly billings for staff time and expenses incurred during the period will be payable within thirty (30) days of invoice date. A charge of 1 % per month will be added to all past due accounts. " Rates for individuals in these categories will be increased by 50% for time spent in court testimony. MURPHY & DAVIS, LLP HOURLY FEE SCHEDULE Attorneys $ 175.00 Paralegals $75.00- $95.00 Extraordinary expenses, such as courier services and express mail, are separately itemized and billed. Routine expenses, such as long distance telephone - calls, copying, postage, etc., are not separately itemized but are covered by a two percent (2 %) administrative charge added to each billing. Agency Dissolution Services _ Proposal City of Seal Beach o , o KEYSER MARSTON EXPERIENCE A complete description of KMA's experience is provided on the following pages. 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City of Hawthorne, Hawthorne Redevelopment Agency Plan Amendment Evaluation. KMA was called upon by the Agency's special legal counsel to provide an evaluation of economic blight in the wake of a ruling by the Superior Court in San Bernardino County that the blight analysis prepared by an earlier consultant to the Agency was defective, resulting in invalidation of an amendment to the Redevelopment Plan (Centinela Valley Union High School District, et al., vs. Community Redevelopment Agency of the City of Hawthorne, et al). 2. City of San Diego, Centre City Development Corporation, Merged /Expanded Redevelopment Project. KMA assisted the CCDC in the two -year plan amendment adoption process for a merged /expanded Centre City Redevelopment Project. Adopted in April 1992, the +1,500 -acre project encompasses virtually all of downtown San Diego, including three existing project areas. KMA's role in the plan adoption process included preparation of market demand and land use absorption forecasts for office, hotel, retail, and multi- family; detailed analysis of economic blight conditions in the expansion area; and participation in fiscal review with affected local taxing agencies. The plan amendment and merger was adopted in April 1992. 3. City of San Diego, San Diego Redevelopment Agency, City Heights Project . Adoption. KMA worked closely with the Redevelopment Agency of the City of San Diego td adopt a redevelopment plan for the 2,062 -acre City Heights project. KMA prepared fiscal impact analysis for the affected local taxing agencies and responded to the agencies' impact statements and comments on the Draft EIR. KMA also participated closely in fiscal review and assisted the Agency in negotiations with the taxing agencies. The redevelopment plan was adopted in April 1992: 4. City of Stockton, Stockton Redevelopment Agency, Eastland Plaza Feasibility Study. KMA evaluated the feasibility of adopting a redevelopment plan for a depressed area east of downtown Stockton. The area was proposed for development of a large supermarket anchored retail center. KMA's assignment was to define the market context for revitalization of the surrounding area's run -down housing stock, which was negatively impacted by adjacent industrial uses. The redevelopment plan was adopted in 1990. 5. City of South San Francisco, South San Francisco Redevelopment Agency, El Camino Corridor. KMA was the lead consultant in providing full plan adoption services. Key in the blight determination was the effect of irregular, shallow, and narrow parcel configurations had on development opportunities. Additionally, market analysis techniques were employed to establish the range of land uses to be permitted under the redevelopment plan. The redevelopment plan was adopted in 1993. 6. City of Los Angeles, Los Angeles Community Redevelopment Agency, Crenshaw CD -8, Broadway- Manchester, CD -9 Corridors, Watts Corridor, Mid City, Western /Slauson, Wilshire Center /Koreatown, Westlake Recovery Redevelopment _ Plan Adoption Economic Blight Assessments for Civil Disturbance Disaster Projects. KMA was retained to provide support to LACPA staff in plan adoption of a Agency Dissolution Services Proposal City of SAW Paar..h Pang 1n major amendment to an existing redevelopment plan and adoption of eight new projects in central and south - central Los Angeles. KMA prepared the economic blight analysis, documenting high levels of vacancy, high crime rates, stagnant property values, and the general economic decline in the area. KMA also advised Agency staff in matters . pertaining to the impacts of AB 1290 on plan adoption procedures and documents, the Agency's earthquake recovery projects, and other matters. The redevelopment plans . were adopted in 1995 and 1996. • 7. City of Santa Rosa, Santa Rosa Redevelopment Agency, Railroad Square Redevelopment Feasibility Analysis. KMA conducted a feasibility analysis for the use of redevelopment within an old industrial area near the Railroad Square commercial district of . Santa Rosa. The area under study consisted of an old railroad station, brick warehouses in need of structural upgrades, property contaminated with hazardous wastes from past uses, inadequate infrastructure, and older residential pockets. The key question was whether sufficient increment would be generated to substantially contribute to solving the problems in the area, particularly in light of the AB 1290 mandatory tax - sharing schedule. The results of the survey indicated that the project was not financially feasible and was not pursued. 8. City of Los Angeles, Redevelopment Agency of the City of Los Angeles, Assess- ment of Barriers to Earthquake Recovery. KMA assessed the potential economic barriers to a general economic recovery within the San Fernando Valley and Hollywood areas following the Northridge earthquake. The study included information regarding the general state of the local economy prior to and since the earthquake, existing •market trends Within the affected areas, and specific economic problems that emerged as a direct result of the earthquake. This information was compiled to assist the LACRA in focusing their efforts to stimulate reconstruction in heavily impacted areas, including the ultimate. adoption of five recovery projects in January 1995. 9. Sacramento Housing and Redevelopment Agency, Mather Air Force Base. KMA acted as lead consultant to the Sacramento Redevelopment Agency to undertake redevelopment of their Mather Air Force Base site, as proposed under special legislative authorization. Specific responsibilities include an analysis of economic blighting conditions in the proposed project area, financial feasibility analysis and coordination of document preparation by the plan adoption team of consultants. The redevelopment plan was adopted in 1995. 10. City of Oakland, Oakland Redevelopment Agency, Coliseum Redevelopment Project. KMA lead a large -scale effort to define and quantify the blighting conditions for a +6,000 -acre Project in a mixed -use area of Oakland. Analysis included physical and economic blight, utilizing geographic information system graphics to demonstrate the incidence and prevalence of blight. KMA also analyzed the financial feasibility of the Redevelopment Plan. The Project was adopted in August 1995. 11. City of Fresno, Fresno Redevelopment Agency, Roeding Business Park Redevelopment Project. KMA was lead consultant assisting and advising in the adoption of the Redevelopment Plan for the Roeding Business Park Redevelopment Project. The Project Area includes a large underutilized area (1,200 acres) which has long been designated as a Tight industrial area of the City. Responsibilities included Agency Dissolution Services Proposal •itu ni S =al Raarh �nc 11 overall coordination, scheduling and management of adoption activities, preparation of required reports including preliminary report and report to city council, review of documents, and consultations with taxing entities. The redevelopment plan was adopted in July 1996. 12. City of San Diego /Southeastern Economic Development Corporation, Central • Imperial Amendment No. 2. KMA assisted in an amendment to the Central Imperial • Redevelopment Plan. The amendment proposed to add territory to an existing redevelopment project with the objective of facilitating development of underutilized land for neighborhood - serving commercial uses to benefit a large undeserved community. KMA's role involved a market assessment for commercial uses, scheduling adoption activities, conducting physical and economic blight studies, preparing tax increment projections, conducting the financial feasibility analysis, and advising on project area committee expansion. The plan amendment was adopted in November 2000. 13. City of Fresno, Fresno Redevelopment Agency, Redevelopment Plan Adoption and Merger (Merger #1 and Merger #2). KMA assisted the City of Fresno with the adoption of two new redevelopment plans and the merger of 10 existing redevelopment projects into two separated merged project areas. Redevelopment efforts are intended to assist the City with plans to achieve revitalization of the downtown area and position it as a vital regional center serving both Fresno and the San Joaquin Valley. Merger #1 was adopted in 1998 and Merger #2 was adopted in 1999. 14. City of Oxnard, Oxnard Community Development Commission, Historic Enhancement and Revitalization of Oxnard (HERO) Redevelopment Project. KMA assisted the City of Oxnard with adoption of a 2,400 -acre redevelopment project that encompasses much of the older commercial and industrial areas of the City. The objective of the redevelopment project is to facilitate the revitalization of key commercial corridors and older industrial areas suffering from incompatible adjacent uses and economic decline. KMA prepared the economic and physical blight analysis, the Preliminary Report, the Report to Council, and provided scheduling, project coordination and consultation to the agency on issues related to project feasibility and implementation. The redevelopment plan was adopted in 1996. 15. City of San Francisco, San Francisco Redevelopment Agency, Transbay Redevelopment Project. In an assignment for the Agency, KMA worked on the adoption of the proposed Transbay Redevelopment Project in downtown San Francisco. Consultation services included review of blight issues impacting the Transbay area, preparation of a Blight Report, analysis of the private sector economics for the Concept Plan, and evaluation of the proposed project's financial feasibility. Plan adoption is pending. 16. City of Novato, Novato Redevelopment Agency, Hamilton Army Airfield. KMA's experience in affordable housing strategies and military base conversion and disposition played a key role in the conveyance process of 1,500 homes on the Hamilton Army Airfield from military to civilian use, KMA's role continued into the adoption of a redevelopment plan for the Airfield. While the reuse of the historic military installation presented the City with opportunities, existing facilities were obsolete and has limited reuse potential. The base infrastructure didn't comply with city requirements or typical Agency Dissolution Services Proposal City of Seal Beach Papa 1 urban standards. KMA was able to assist the. City in developing a financially feasible redevelopment plan while guiding the City through the redevelopment adoption process under the military conversion chapter of the California Redevelopment Law. The redevelopment plan was adopted in March 1998. 17. City of Citrus Heights, Community Redevelopment Agency Commenced Corridor Redevelopment Project. KMA assisted in adoption of the City's commercial corridors as a redevelopment project area. The Project Area contained approximately 557 acres. and included commercial, residential and light industrial uses. Following incorporation in 1997, the City had assumed responsibility of providing basic government services to the community. Due to the City's relatively low portion of the basic one- dollar tax rate (less than 10 percent), the City relied heavily on its main revenue source, sales tax revenue to support service costs. This revenue source had declined in resent years and was threatening the City's economic health and development. Because of the City's significant reliance on sales tax revenue and challenges to the City's existing commercial infrastructure from existing and proposed malls, it was critical to the City's long -term financial health that the existing revenue from commercial development be preserved and enhanced. The redevelopment plan was adopted in June 1998. 18. City of Commerce, Commerce Community Development Commission, Project No. 4. The Commerce Community Development Commission selected KMA to conduct a series of studies to examine the possibility of establishing a fourth redevelopment project to continue Commerce's strong redevelopment efforts aimed at converting old manufacturing facilities into modern industrial sites. KMA conducted a market • assessment examining the greater Los Angeles industrial region. The assessment of the local market included a rental survey and examination of industrial building inventory by classification and quality. KMA conducted a financial feasibility analysis and blight survey and presented staff with a boundary recommendation. Following the conclusion of the feasibility study, KMA assisted the Commission with the adoption project including preparing the major documents including, Preliminary Report and Report to Council, and assisting in project management. The redevelopment plan was adopted in July 1998. • 19. City of San Francisco, San Francisco Redevelopment Agency, South Bayshore Redevelopment Plan Feasibility Study. Keyser Marston assessed the feasibility of adopting a redevelopment project area in the South Bayshore area of San Francisco. The study included documenting physical and economic blight conditions, • recommending project area boundaries, developing a multi -year financial model for the project, preparing an implementation plan and documentation and plans necessary for adoption of the project area. The plan adoption is still pending. 20. City of San Francisco, San Francisco Redevelopment Agency, Bayview /Hunters Point Redevelopment Plan Amendment. KMA assisted the Aoency with assessing ' the feasibility of the proposed Bayview /Hunters Point Amendment. In coordination with . • the Agency, KMA conducted a large -scale effort to define, quantify, and document economic blight conditions for a 2,538 -acre residential, commercial, and industrial area in San Francisco. In addition, Keyser Marston prepared the tax increment projections and analyzed the financial feasibility of the proposed plan. The plan amendment is pending. Agency Dissolution Services Proposal City of Seal Beach Page 13 21. City of San Jose, San Jose Redevelopment Agency, Civic Plaza Redevelopment Project. KMA assisted the San Jose Redevelopment Agency with the adoption of a redevelopment plan encompassing a seven -block area with the downtown area selected as the location for the return of the City's civic center to the downtown core as a catalyst to downtown revitalization within a blighted area. KMA analyzed project area physical and economic conditions and the financial feasibility of establishing a redevelopment • plan. KMA's plan adoption services included preparation of the Preliminary Report, coordination of the overall adoption process, scheduling, assistance with Project Area Committee formation, and support to Agency staff. The redevelopment plan was adopted in June of 1999. 22. City of Los Angeles, Redevelopment Agency of the City of Los Angeles, Northeast San Fernando Valley Redevelopment Project. KMA assisted the Agency with preparation of the blight analysis for the 6,700 -acre redevelopment project which largely overlays the existing Pacoima /Panorama City Earthquake Disaster Assistance Project. The purpose the Project was to assist the City in revitalizing major commercial corridors and redeveloping underutilized industrial areas of the San Fernando Valley. KMA also conducted the blight field survey, prepared and managed the project area database, and preparing the Preliminary Report. KMA's work was completed in October 1999. Due to a lack of political support, the adoption of the redevelopment plan was not pursued. 23. City of Indio, Indio Redevelopment Agency, Redevelopment Plan Adoption and Merger. KMA assisted the City of Indio with the merger of two existing redevelopment projects within the City and the addition of over 2,800 acres to create a merged project area. The merged redevelopment project will assist the City in achieving its goal of supporting the development of new industrial and commercial businesses, creating jobs, and alleviating stagnant business conditions within City boundaries. KMA's services included performing an initial feasibility study to evaluate whether the territory to be added would meet the blight and urbanization requirements in the redevelopment law. Subsequent services included project coordination, scheduling, preparation of all key documents (redevelopment plan, preliminary report and report to city council), blight analysis for both the added area and the existing projects, and preparation and coordination of the EIR. The amendments were adopted in November 1999. 24. City of Sacramento, Sacramento Housing and Redevelopment Agency, Northgate Feasibility Study. KMA completed an economic feasibility study to assist the Agency in determining whether or not to move forward with a plan adoption. The area being considered includes commercial corridors primarily developed with strip center uses and adjacent residential areas. A key factor in the analysis was the potential development that could be generated from a vacant area that would provide the revenues to rehabilitate the larger project area. KMA prepared a tax increment projection based upon historic .. • assessed value growth trends and anticipated development projects. The potential projects included auto mall, retail power center and light industrial development. The Agency is in the process of adopting the redevelopment plan. Aoency Dissolution Services Proposal City of Seal Beach Page 14 25. City of Santa Rosa, Santa Rosa Redevelopment Agency, Southwest Redevelopment Project. KMA assisted the Santa Rosa Redevelopment Agency with the adoption of the Southwest Redevelopment Project. The Southwest Project Area consisted of two noncontiguous areas totaling approximately 2,006 acres of primary residential uses with a corridor of commercial uses and a few pockets of industrial development. In an attempt to move forward with revitalization of the Southwest Area, the City and County agreed to work cooperatively in a joint redevelopment project to bring about a comprehensive redevelopment plan for Southwest Area. • In addition to preparing the major documents supporting the blight and financial feasibility findings, KMA worked extensively with Agency staff in the community participation process. Community outreach meetings were held before the adoption process was formally started. Also, the Agency formed a Project Area Committee. KMA prepare the materials necessary to form the PAC as well as conducted the PAC election. The Project was adopted in June 2000. • 26. City of. Cupertino, Cupertino Redevelopment Agency, Repositioning of the Vallco Fashion Park. KMA assisted the City of Cupertino in the adoption of a redevelopment project to revitalize the 1.4 million square foot Vallco Fashion Park. KMA prepared the blight and financial analysis to determine the eligibility and financial benefit of including the mall in a redevelopment project. The 22- year -old mall for the most part has become functionally obsolete. The mall began to decline in 1996 with the closing of the Emporium department store, one of the mall's three anchors. Following the departure of the Emporium the vacancy rate of the mall climbed to 25% while retail sales declined by 20 %. This is a particular problem for the City of Cupertino because the Vallco Fashion Park has historically generated 30% of the City's total retail sales tax. Redevelopment is being considered as the gap financing source to insure that the mall we be renovated in a comprehensive manner that will not only stop retail sales leakage but will again establish Vallco as a competitive first class mall. The redevelopment plan was adopted in July 2000. 27. City of Sacramento, Sacramento Housing and Redevelopment Agency, McClellan Air Force Base. KMA was retained by the Sacramento Housing and Redevelopment Agency to evaluate the feasibility of establishing a redevelopment project at the McClellan Air Force Base and the adjacent Watt Avenue commercial corridor. Key issues considered included whether the commercial corridor should be included in the redevelopment project and the impact of its inclusion on the plan adoption procedural requirements and schedule. KMA conducted a windshield survey of the base and the commercial corridor, analyzed the pros and cons of including the commercial corridor, prepared tax increment and possessory interests projections, and a preliminary assessment of the economic incentives that could'be offered to private development teams redeveloping the military base. KMA also projected time frames and preliminary schedules for adoption of the redevelopment project under different scenarios. At the conclusion of the feasibility phase, the Agency decided to proceed with the Plan adoption. KMA prepared the key documents in the adoption process including the Aoency Dissolution Services Proposal City of Seal Beach Page 15 Preliminary Report and Report to Council. The redevelopment plan was adopted in November 2000. 28. City of Long Beach, Long Beach Redevelopment Agency, Re- Adoption of the Central Long Beach Redevelopment Project. KMA assisted the Long Beach Redevelopment Agency in readopting the Central Redevelopment Project. The Project was originally adopted in 1993 as a "disaster project" following the civil disturbances in April and May of 1992. Due to numerous assessment appeals the total assessed value of the Project declined below the base year value and was not anticipated to generate tax increment in the reasonable future. For this reason, the Agency rescinded the original adoption ordinance and readopted the Project. KMA prepared the Preliminary Report reaffirming the prevalence of blighting conditions in the 2,600 acre Project Area and identified a financially feasible project based on future tax increment. KMA also • prepared the Report to City Council for the readoption of the proposed Project. The Plan was readopted in December 2000. • 29. . City of San Jose, San Jose Redevelopment Agency, Business Clusters Project. KMA was asked by the San Jose Redevelopment Agency examining the feasibility and latter to project plan adoption services to establishing a non -tax increment redevelopment project area incorporating seven non - contiguous shopping centers located throughout the City of San Jose. These older neighborhood centers have. experienced a decline in retail activity, with private sector attempts to revitalize these areas proven to be unsuccessful. It is the Agency's intent to revitalize the shopping centers with redevelopment programs such as facade improvements and landscaping. No residential uses were included within the seven clusters. It was found that six of the seven retail clusters met the legal test of a blighted area. The San Jose Retail Clusters Blight Assessment was presented to the Agency in July 1998. In August 1998, the Agency requested the plan adoption services to assist with the proposed adoption of the Retail Clusters Redevelopment Project. The redevelopment plan was adopted in March 2001. 30. City of San Jose, San Jose Redevelopment Agency, Eminent Domain Amendments for West San Carlos and The Alameda Redevelopment Projects. Keyser Marston assisted the Redevelopment Agency prepared key components of the Report to City Council in support of the amendments to extend eminent domain in the • West San Carlos and The Alameda Redevelopment Projects. This included describing the need for extension of the eminent domain authority and impacts on residents within and adjoining the Project Areas. The West San Carlos Street and the Alameda Redevelopment Plans were both adopted on March 5, 1991. The Redevelopment Agency's eminent domain was currently set to expire on July 1, 2001. The Agency amended the Redevelopment Plan to extend eminent domain authority for 10 -years to coincide with the durations of the plans. Both the West San Carlos Street and the Alameda Projects can be characterized as strip commercial corridors encompassing approximately 108 and 51 acres respectively. •- Both project areas included some residential units interspersed among the commercial businesses and additionally a few units above the ground floor retail. However, the Agency did not have or propose to adopt eminent domain authority over residential uses so there was no requirement to form a Project Area Committee (PAC). The reasons for extension of the amendment domain authority was to provide the Agency with the ability Agency Dissolution Services Proposal City of Seal Beach Pan= iR to assembly small parcels to create sites large enough to meet contemporary business needs. The amendments were adopted in June 2001. 31. City of Healdsburg, Community Redevelopment Agency of the City of Healdsburg, .. Amendment No. 2 to the Sotoyome Community Development Project Area. KMA assisted in the adoption of an amendment to the Sotoyome Community Development Plan. The 1,432 acre Project Area included the downtown area. The purpose of the amendment was to. amend and increase the tax increment limit for the Development Plan from $100 million to $307 million for the Project Area, amend and increase the bonded indebtness limit from $50 million to $100 million, and extend the time limit to incur debt from 2011 to 2014. KMA also assisted the Agency in developing an updated project and programs list to address the changing needs of the community. KMA's role in the adoption of the amendment included the preparation of the adoption schedule activities, the physical and economic blight analysis, the financial feasibility, the Amended Development Plan, the Preliminary Report, and the Report to the City Council. The plan amendment was adopted in July 2001. 32. City of Arcadia, Arcadia Redevelopment Agency, Amendment No. 5 to the Central Redevelopment Project KMA assisted the City of Arcadia with an amendment to the existing Central Redevelopment Plan to add 75 acres of territory. The area to be added, generally know as the South Arcadia Business District, is an older commercial corridor along the southern edge of the City. Originally developed in the 1950's, business activity had declined in South Arcadia, in part, due to the small lot sizes, and age and substandard design of the buildings. The goal of the City is to implement redevelopment programs that had been successful used in the City's downtown area in South Arcadia commercial area. Programs contemplated for the Amendment Area include key public improvements, commercial rehabilitation program and business attraction and retention programs to assist property owners and local businesses in improving the area's image, physical condition, and economic conditions. The Plan Amendment was adopted in July of 2001. 33. City of Novato, NovatoRedevelopment Agency, Second Amendment to the Hamilton Field Redevelopment Project. The Agency requested KMA to assist in the adoption of an amendment to the 371 acre original project area of the Hamilton Field Redevelopment Project. The purpose of the amendment was to amend and increase the tax increment limit for the original project area from $137 million to $400 million and amend and increase the bonded indebtness limit from $101.8 million to $120 million. KMA's role in the adoption of the amendment included the preparation of the adoption schedule activities, the physical and economic blight analysis, the financial feasibility, the Amended Redevelopment Plan, the Preliminary Report, the Report to the City Council, and responses to written objections. The plan amendment was adopted in December 2001. 34. County of Monterey, Monterey County Redevelopment Agency, Adoption of the Fort Ord Redevelopment Project KMA was retained by Monterey County to assist with the adoption of a redevelopment plan for the portions of the former Fort Ord that are under the County's jurisdiction (and not within the limits of any incorporated,cities in Monterey County). The Project Area is comprised of approximately 19,300 acres and is largely undeveloped. Major portions of the Project Area were used by the Army for live - fire training exercises and are contaminated with unexploded ordnance. KMA's role was to prepare key documents, prepare an analysis of the physical and economic blighting conditions present on the former military base, and analyze the financial feasibility of the proposed Redevelopment Plan. While general conditions on the base had been Agency Dissolution Services Proposal City of Seal Beach Page 17 analyzed during the preparation of the reuse Plan, data on specific conditions in the • County portion of For i Or was limited. In addition. due to the present limited available of v.'ater resources, the extent of potential future development is uncertain, thus making the analysis of future revenues and expenditures more complicated. Through field surveys, document review, and careful coordination with the Fort Ord Reuse Authority, other consultants, and County staff, KMA.was able to document existing conditions and project future development scenarios that allowed analysis of the feasibility of the project. The Redevelopment Plan was adopted in February 2002. 35. City of Boise, Capital City Development Commission, Adoption of the Gateway East Urban Renewal Project. Keyser Marston prepared an eligibility report for the proposed Gateway East Urban Renewal Project for the Capital City Development Corporation pursuant to Chapter 20 Urban Renewal Law of the Title 50 Municipal Corporations of the Idaho Statues. The purpose of the report is to provide support that the Project Area is "deteriorated" or "deteriorating" which is one of the required findines that the City Council must make before further consideration to approve an Urban Renewal Plan. The 1,070 Project Area is located within both the City of Boise and Ada County unincorporated territory. The City Council is interested in redeveloping the Project Area to facilitate the development of light industrial, research and development, technology and manufacturing uses, as well as related commercial uses and to create an attractive identifiable entry point to the City. A lack of adequate access was the primary factor inhibiting redevelopment and development of the area which is blighting condition under Idaho Urban Renewal law. The project is currently in the adoption process with project approval anticipated by the end of 2002 or beginning of 2003. 36. • City of Henderson, Henderson Redevelopment Agency, Amendment to.Project Area No. 1. KMA is assisting the Landwell Corporation and the City of Henderson in adding certain underutilized land owned by the corporation totaling approximately 2,500 acres to the existing Henderson Redevelopment Area. The U.S. Government during World War II developed the BMI facility for the processing of magnesium used in the U.S. military arsenal. Following the end of World War II the U.S. Government sold the facilities to the private sector. Much of the underutilized land includes extensive evaporation ponds covering over 1,000 acres, which are no longer used. Landwell is looking to the redevelopment agency for assistance in consolidating and relocating the ponds so that the site can be developed in a manner consistent with the City's long -term goals for residential, commercial and public uses. KMA's role has been threefold: 1) to prepare financial projections on tax increment revenues which could be generated from the project; 2) to prepare an existing conditions report (blight analysis) on the proposed added area; and 3) to act as a liaison between Landwell and the City in discussing the benefits of the project and plan amendment procedures. Plan amendment adoption is anticipated for fall 2001. Agency Dissolution Services Proposal City of Seal Beach ✓a rc ' R - KEYSER MARSTON REFERENCES San Jose Redevelopment Agency • Ms. Susan Shick Executive Director 50 West San Fernando Street • Suite 1100 San Jose, California 95113 (408) 277 -4744 City of Santa Rosa Mr. Stephen Burke Executive Director 90 Santa Rosa Avenue Santa Rose, California 95404 (707) 543 -3300 Long Beach Redevelopment Agency Mr. Otis Ginoza Redevelopment Administrator Long Beach Redevelopment Agency 333 West Ocean Boulevard, Third Floor Long Beach, California 90802 (565) 570 -5093 McDonough, Holland & Allen Dave Beatty, Esq. 555 Capitol Mall, Suite 950 Sacramento, California 95814 (916) 444 -3900 Kane, Ballmer & Berkman Murray D. Kane, Esq. 515 South Figueroa St. Suite 1850 Los Angels, CA 90071 -3301 (213) 617 -0480 Agency Dissolution Services Proposal City of St:al n-nrh :•arc C, • KMA Team Members A unique strength of KMA is the depth, continuity and availability of our principals. The firm`s principals bring years of practical experience in working with business and government, and provide convenient and personal service to our clients. KMA has offices in San Francisco, Los Angeles, and San Diego with a staff of over 40 employees. While each principal has a broad background in all aspects of real estate consulting, each has a specific area of expertise related to their education, experience, and interest. The following KMA staff members will provide the services required under this assignment. More detailed resumes for each staff member are also included in the proposal. Mr. Paul Anderson will oversee the blight assessment and document preparation services services. Mr. Anderson manages KMA's plan adoption services. Mr. Anderson has been active in the redevelopment field for fifteen years and has been involved in the preparation and adoption of numerous redevelopment plans, amendments, feasibility studies and implementation plans for cities throughout California. Mr. Greg Soo -Hoo will prepare the financial feasibility analysis including tax increment projection and identification of remaining obligations. Mr. Soo -Hoo is a Principal with the Los Angeles office and provides project management for the fiscal and financial consulting assignments. He has over fifteen years of experience in redevelopment and public finance. Mr. Soo -Hoo is experienced in the preparation of tax increment revenue and cash flow analyses and has participated as financial consultant in the preparation of tax increment revenue and cash flow analyses for nearly 40 bond issues totaling nearly $900 million. He has assisted redevelopment agencies in providing technical assessed valuation analyses, the preparation of tax increment revenue projections for a variety of redevelopment project areas and the State. reporting requirements for redevelopment agencies. He previously worked for five years as . budget and fiscal analyst in the County's Chief Administrative Office and provides familiarity with key County staff and knowledge of County systems. Agency Dissolution Services Proposal City of Seal Beach Pans 9r1 KEYSER MARSTON ASSOCIATES INC. PAUL ANDERSON • ;• :: ;71.6K,`= ' � �: '` .• —,. `+ ' ' Key Role Mr. Anderson's work experience in • ', ;. ;" �. advance planning for the City of 1 . ;�,; ~r 1`;� � �� �: �M � Over sees KMA's redevelopment Manhattan Beach, redevelopment :��� p + ; , effort in Southern California. His plan adoption for the Los Angeles ur,_. , , background in planning and urban Community Redevelopment ` .' {moo„ 2`� ; d ' �` v design provides specialized Agency, and urban design for a ; , =� ,° „ ,� � ' . insights into the redevelopment private sector design firm in San , r r; ' s. adoption process. Francisco makes him uniquely ,� g ,� L qualified to assist cities in their A ' - x - a; i Specializatio redevelopment efforts. . il It, a .._ 4 i t a Redevelopment Specialist i � , d � , q ` +" Professional Credentials ry„9'' k , ,f P � Mr. Anderson has extensive s+ Mr. Anderson received his II , 4-e.... 0. .,U ex erience in mana in and ft ` F � . • i� ' . directing redevelopment plan bachelor's degree in architecture -,.` = "' � '^ from the University of Southern fit'= •��,a13`,i '4+ _} adoptions and amendments ; ` =" " _ f throughout California. He is California and is a member of the lit '' ?, :' . "' -: ` American Planning Association. ;i W experienced in all aspects of plan adoption services and providing a Mr. Anderson is a principal at full range of plan adoption Keyser Marston Associates' Los services, as well as preparing Angeles office. Prior to joining technical documents, providing KMA, Mr. Anderson managed ongoing staff support to clients, plan adoption services at Katz working with community groups Hollis. Mr. Anderson has over 15 and the formation of Project Area years-of experience in Committees (PACs). redevelopment, land use planning - and urban design. Mr. Anderson has assisted in the adoption and amendment of broad range of large complex projects including the adoption of the 12,000 -acre North Long Beach Redevelopment Project and the merger of seven redevelopment projects in the City of Seaside. He has assisted in the adoption of many small and specialized projects including the Olivehurst Community Plan in Yuba County and the Flood Control Disaster Project for the City of Roseville. • • KEYSER MARSTON ASSOCIATES I NC. GREGORY D. SOO -HOO • • {, �, • 7, , . r', ' ,i K ey R and redevelopment program costs s,- r Economic feasibility models have "" - �, ;�': Mr. Soo -Hoo has managed been incorporated in all plan • ,,,. _' ' redevelopment tax increment adoption or plan amendment ris rz . ' c services for KMA clients. These Reports to Council prepared by ;Atil- - ' _,, r i f t , services include long range KMA. On -going cash flow services Irr projections of redevelopment have been provided to the various ---,-.= -,- '' v. a, project area taxable values and tax redevelopment agencies, including , x l.• 0 . ` revenues, estimation of Brea, Long Beach and Glendale. y .. �. ,•, ' N assessment appeal valuation and • N�4` t'p` tax refund impacts, preparation of Assessed Valuation Services ti � , y agency financial reports and • M .4,7" •._Yy;7" •- r t a : . :, %. plan adoption and The assessed valuation services • ,� r,._ ..� .. _� ; � ,•, w *� ,�,. ' ,, • plan amendment financial Mr. Soo -Hoo has provided to cities At ' •!•'; ¢ ; .�� � m feasibility studies. Mr. Soo -Hoo is and redevelopment = ri .;._.._ also experienced with local agencies include review of `' i "s '' " ' government.finance having worked assessment appeal filings and an Vin::;'. ' :re • 1 "P -':., 's..n.f r: with the Los Angeles County Chief estimation of fiscal impacts to local • Administrative Office as a taxing entities, parcel by parcel • •• redevelopment and budget analyst verification of base year and Mr. Soo-Hoo is a principal in Keyser for six years. current year assessed values and Marston Associates' Los Angeles the identification of misallocation of office. Mr. Soo-Hoo joined KMA in Fiscal Consultant annual tax revenues. The 1991 and has over 17 years of assessment appeal analyses have Mr. Soo -Hoo has been a fiscal also been supplemented with experience as a consultant to consultant assisting redevelopment estimations of site - specific values California redevelopment agencies. agencies in the issuance of tax to project the likelihood of future . allocation financings totaling nearly reductions in assessed values due S2 billion. He has managed a wide to appeals. range of fiscal consulting services including the verification of Financial Reporting redevelopment project area taxable values, review of historic Mr. Soo -Hoo has assisted valuation patterns, identification of agencies in the preparation of major property owners, annual disclosure reports required determination of assessment to bond rating agencies on agency appeal impacts, and the projection valuation impacts and changes. of current and future year tax Mr. Soo -Hoo has also assisted • increment revenue flow. Mr. Soo- redevelopment agencies with Hoo has also assisted bond • compliance reports required under • underwriting teams in the State law. preparation and review of bond offering documents and has been Professional Credentials an active participant in presentations to bond insurance Mr. Soo -Hoo has conducted and bond rating agencies. Redevelopment Institute financial training courses sponsored by the Financial Feasibility Studies California Redevelopment Association. Mr. Soo -Hoo specializes in the preparation of financial and He is a graduate cum laude of the ri economic feasibility analyses University of Southern Califomia required for the adoption or • and holds a master's degree in amendment of redevelopment public administration, with a project areas. The analyses specialization in public finance. typically consist of a multi -year _ _ comparison of tax increment and other revenue resources vis -a -vis • anticipated capital improvement MURPHY & DAVIS, LLP, REPRESENTATIVE EXPERIENCE AND REFERENCES Representative projects over the past eight years have included the following: • • Two amendments to increase time limits, increase tax increment cap, extend eminent domain and update land uses in Sacramento (Oak Park and Del Paso Heights). • Contact: Dan Moellenberndt • • . Sacramento Housing & Redevelopment Agency (916) 440 -1399 • An amendment to delete territory in Sacramento (Sacramento Army Depot). .Contact: Amy Marshall Sacramento Housing & Redevelopment Agency (916) 440 -1399 • • The adoption (pending) of a new redevelopment project area in Sacramento (Northgate Boulevard). Contact: Kelly Korver Sacramento Housing & Redevelopment Agency (916) 440 -1399 • • The adoption of a new 7,000 -acre project area in Long Beach. Contact: Otis Ginoza Redevelopment Administrator Long Beach Redevelopment Agency . (565) 570 -5093 • An amendment to increase time limits, increase the tax increment cap and merge projects in San Mateo. Contact: Diana Whitecar Economic Development and Business Assistance Manager City of San Mateo (650) 522 -7242 Agency Dissolution Services Proposal City of Seal Beach Pace 21 • An amendment to extend the time limit on the use of eminent domain in Hawthorne. Contact: Michael Goodson Planning Director City of Hawthorne • (310) 970 -7939 • The adoption of a new project area for the revitalization of an aging regional shopping center in Cupertino. Contact: Steve Piasecki Community Development Director City of Cupertino (408) 777 -3236 • • • Agency Dissolution Services Proposal City of Seal Beach P =moo �� C. NICOLE MURPHY MURPHY & DAVIS, LLP 300 Capitol Mall, Suite 1110 Sacramento, California 95814 . www.m - mlaw.com Facsimile (916) 446 -6489 Telephone (916) 446 - 6462E -Mail cnmurphy @m - mlaw.com PROFESSIONAL EMPLOYMENT June 1999 Partner, Murphy & Davis, LLP, to Present: Sacramento, California March 1997 Principal, Law Offices of C. Nicole Murphy, to June.1999: Sacramento, California August 1993 to Attorney, McDonough, Holland & Alien, March 1997: Sacramento, California May 1978 to Legal Analyst, McDonough, Holland & Allen, August 1993: Sacramento, California PROFESSIONAL EXPERIENCE • Ms. Murphy's redevelopment background and experience extends over 20 years and includes: (a) the creation of numerous redevelopment agencies; (b) the adoption, amendment and merger of innumerable redevelopment plans; (c) the negotiation and preparation of owner participation agreements, disposition and development agreements, and documents and agreements related thereto, for all types of projects (commercial, residential, industrial); (d) the preparation, adoption and amendment of implementation plans; (,e) the preparation and /or review of loan agreements and other financing documents; (f) the review and analysis of environmental documents for various . redevelopment activities; (g) the preparation and /or review of .affordable housing plans, projects and programs, including replacement and inclusionary housing plans,. for -sale and rental housing development project agreements, and downpayment assistance and other subsidy programs; and (h) litigation concerning the validity of redevelopment projects, tax increment financing, affordable housing requirements and other issues related to project implementation. Current redevelopment clients include the Cupertino, Folsom, Hawthorne, Rocklin, Sacramento, San Mateo and San Pablo Redevelopment Agencies. Representative projects within the last several years have included the following: • Adoption of a redevelopment plan and negotiation /preparation of an owner ' participation agreement for the rehabilitation and upgrade of an outdated regional shopping center; • • • Negotiation and preparation of multiple disposition and development agreements for a mixed -use project including retail, public and residential uses; _ C. Nicole Murphy Page 2 • Negotiation and preparation of a disposition and development agreement for a 70- room hotel with a potential 30 -room second phase; • • Consultation and advice concerning relocation and replacement housing issues • related to the acquisition and development of various projects; • Negotiation and preparation of disposition and development agreements for a -major hotel and commercial project involving two separate developers in a joint • development project and including major public facilities (parking, plaza, etc.); • Negotiation and preparation of a number of acquisition agreements for both "opportunity" and development- necessary acquisitions, including acquisition of a mobilehome park; • Consultation and advice concerning, low and moderate income- housing issues, including the preparation of documents to establish and implement loan programs • and the negotiation and preparation of a disposition and development agreement and related covenants for a low and moderate income housing project; • Consultation and advice concerning owner participation issues and the preparation of owner participation agreements for the expansion of two commercial developments; • The•adoption of a new 7,000 -acre redevelopment project area; • Various redevelopment plan amendments to add new territory, increase time limits, increase the tax increment cap, merge projects, extend eminent domain and update land uses. In addition to representing redevelopment agencies, Ms. Murphy has advised numerous cities and private developers on a variety of public law matters, including: (a) general plan amendments; (b) condemnation; (c) land use litigation; (d) the preparation of public works contracts and statutory development agreements; (e) assessment district delinquency collections, including judicial foreclosure actions; and (f) opinions and advice on CEQA, employment, Brown Act, Political Reform Act, land use, relocation and other issues. Ms. Murphy has also participated as a speaker at seminars and conferences of the California Redevelopment Association and the League of California Cities on various topics, including "Tax- Sharing Agreements /Mandatory Payments to Taxing Entities" (California Redevelopment Association, Financial Management Seminar), "Redevelopment Update Briefing" (League of California Cities, City Manager's Conference), "Plan Adoption Best Practices" (California Redevelopment Association, Legal Issues Symposium) and "Critical Elements of the DDA/OPA" (California . Redevelopment Association, Redevelopment Institute). PROFESSIONAL EDUCATION Juris Doctor, 1993 McGeorge School of Law, Sacramento, California - C. Nicole Murphy Page 3 PROFESSIONAL AFFILIATIONS Member, State Bar of California Member, American Bar Association • • Member, Sacramento County Bar Association • Member, California Redevelopment Association • • • • • • Considerarion of Consultant Services — Dissolution of Redevelopment Agency Redevelopment Agency Staff Report May 28, 2002 • • ATTACHMENT 4 LETTER PROPOSAL DATED MAY 23, 2002 AND EVALUATION OF PROPOSED REDEVELOPMENT AGENCY DISSOLUTION, A. C. LAZZARETTO & ASSOCIATES, DATED MAY 10, 2002 • • • Dissolution of Agency.RDA Staff Report 8 From Dominic Lazzaretto To Lee Whittenberg Date' 5232002 Time. 9 42:30 AM Page 2 of 5 May 23, 2002 VIA FACSIMILE A.C. Lazzaretto & Associates Lee Whittenberg • Director Development Services City of Seal Beach • Dominic D Lazzaretto 211 Eighth Street Associate Seal Beach. California 90740 -6379 Address: P 0 Sox 313 9 Burbank, CA 91504 Subject: Proposal Sub ect: Addendum to Pro osal for Consulting Services — Dissolution of The Seal Beach Redevelopment Agency Tel: (818) 569 -4526 Fax: (818) 558 -7088 Dear Mr. Whittenberg, e -mail: dom@aclazz cam It was a pleasure to meet you and the City staff on Tuesday. Per your request, please find below an addendum to our proposal to provide consulting services to your organization. I believe that the enclosed scope of work and revised cost estimate will better match the project specifics we discussed at our meeting. Scope of Work The following section will identify the specific tasks that will be completed throughout this project. Costs for the project are described under Price Proposal in the section that follows this. It is our understanding that this project would not include the actual dissolution action; rather, it would be an assessment, report, and recoinrnendation on the impacts and issues that would arise should the Redevelopment Agency cease operations. The list below is merely provided as a framework for the evaluation of progress on this project. The proposed outline of services has been prepared in a broad fashion in order to give the Agency as much flexibility as possible. Many of these tasks — while generally organized - in the order that they will be completed — will be conducted simultaneously and incorporated into other actions. The tasks that have specifically been identified at this time are as follows: From. Dominic Lazzaretto To: Lee Wnittenberg Date 5/23(2002 Time: 9.42 30 AM Page 3 of 5 Lee Whittenberg City of Seal Beach May 23, 2002 Page 2 of 4 Scope of Work `k ... .,Descnpfion OfUchotrr K ick -Off Meetings _A_ rrleetmgs tween te member steft to dis'ciss;.-; ;: = ro e ct : speci fi c s; identi go ;:andfanvliafize o p rogra m objectives ;: = ` s: = : - r .. P J P Creation of Project Schedule: Based on the information gathered at the kick -off meetings, a project 2 schedule will be created which identifies key target dates and project milestones. This will be updated regularly as the project evolves ...:�- -- - - - - -- - - -- wi :YY �ine�t Docum Review :•°I [Lin itialstages .of the roject;. A:,C' Lazaretto; &;Associa es.,,,,ll; at' tie r.p e rt n __ documen {s from the_Redev meet: Agency incldding the'adopted Redevelopment - Plans and_ ny;: ;;;: associated amendments,: mplementation Rlans;:annual' budgets',.dtspositiofl and :development := x;::;r = a - reerrients =`ass- throu`"h agreements' =land u'se= coveriants;':and:stzff reports tor: project - related': :.L :i review documents -to" as . the - im pact of °ancl.;ideriti an' toadblocks = + =� >a: _ _ g_ "-- " - e e l - forthe-oals and_ objectives - of :eachj ' tltssolution:of :theAgeriiy- and "toget:atigtt r..fe ents'will a lso assist in: the more.detailed ".a al "es'that will'follow ::Thes do cum Ys,- Legal Issues Identification: With the assistance of your Agency attorney, we will conduct a thorough review of court rulings and legal requirements concerning the dissolution of a redevelopment agency. 4 California Redevelopment Law has recently been updated to require additional conditions prior to closing redevelopment projects and this analysis will ensure that the requirements and the process of dissolution are clearly understood. w =o r ecent tax incre en listor n Tax Increment Projections% Fiscal Analysis :�Througn=i3; , f�r _ _ ro"ect: area = bud "efs_an d`financial statements; we establish :;detailea :tax:'increment : ... . P J 9 • � _:projections' and assets - fiscal impact, or - 011: ' ing- the projea:areas: tile'::: :F Re development Agency "This :step will inoluci ah= ansis 'of tax;increment,thatt would be passed :x:.l; ' : Ihr • d Icome ousiri F und: as well as :to.affected,.taxing'entities:' I n ;_: 4:1:; "•° -� "-} '� , Shrough..to, the Lowand..Mo erate_ nc N . g d dtttori;= fhe•fiscal= analysis will•provide en of ;the. het - income :and expenditures: of City • fu nds:u - on termination orthe A enc en that Etie.Oii - woulc+_- remain =fjscally sotvent; thst • - action= roc Identification & Payment of Outstanding Obligations: Through the review of adopted disposition and development agreements, existing bonded indebtedness, loans, and pass - through agreements, 6 we will identify any obligations that would continue upon the closing of the Agency In addition, we will propose a method for financing such outstanding obligations in order to assess the impact on the City's other resources, including the General Fund. - -- - -- -• �..- �_�• Disposition of UrisPent-Bonii Pr is our uridersf �tliat_the Agency.has. approximately: =; ; : = -- $2.3 million • in_bond -proce available from a re Jriancirig in° 2000;; _your bon d'counsef, == :. will review the details'oi the bond prosp and taenti on= or more a ro Hate methods of tie - ills rids of h fun -- - -- - - - Affordable Housing Requirements: Recent changes to the Redevelopment Law now require certain • housing requirements be met prior to declaring that no further need for redevelopment exists We will assess past affordable housing development in the project areas as well as in the City as a whole to 8 determine if these requirements have been met Should additional affordable housing production be needed, we will detail the type and number of units needed prior to dissolving the Agency In addition, we will assess the income and expenditures of the Agency's Housing Fund to determine if an "excess surplus" situation exists, and if so, will identify a method for expending the funds appropriately From Dominic Lazzaretto To: Lee Whittenberg Date 5/23/2002 Time 9:4230 AM Page 4 of 5 Lee Whittenberg Cify of Seal Beach May 23, 2002 Page 3 of 4 • . . .. ...... ,. , ., , Y.: Descnptioit.ofAct r on :D osalof A ency e : ii is our{u ridersTanding tF atythe:A - encyho ds_ title -to.ceitain properly, i' the Pr ect'Areas:' We will: review, the to rns-of,tiiese `ac `iiisitions aiicl a ". "r eans'of.clis 'os . the on' c essationiof,tfie . -A eric • _, In addit vve= will.as whethe coulc1? _. = • appropriately. t e transferred to the City:: Method of Dissolution: Through a review of the California Redevelopment Law, we will assess the 10 steps involved in dissolving the Redevelopment Agency and provide a framework for the proper method of ceasing operations. This will include a detailed description of the notices required, the ordinances that must be adopted, and the findings that are necessary prior to Agency Dissolution. Report of Findings = =B :Recommendation: :Based on the"infq "gathered in the previous'- "steps "" _r �; : : :. and- the'tesLllts' of the variou analyses, :131 As sociates wil'I p�epare;a :pteliminary;report -: ' findings and make recomrnehdations :onifutuf=e_actionss • he;key : facet of this -report will- include: the;; -; t : 2nalysis of the.overall fiscal of-terminating the Re evelopment'A : :'1t :is :expecfed that.:City; :a review.a comment on.the draft document prior to'the :nriali�ztion of t hepo - -t docu `ent t -fi -- 're :w rsi s tl °� _ _ __ _ __ - �ex •ecf t he m o be rieli�ed afier.t graft =.ve on - - • - - • :.... ....P Q :s:. Presentation of Findings: As part of the completion of this project, we will present our findings and 12 recommendations to the City Council /Redevelopment Agency. This can simply be in the form of distributing the final version of our report, but we would also anticipate a PowerPoint presentation at a public meeting of the bodies. = e r witli.A nc •I_ aI'and= bdnd' couiisel ?' = - .-- :.;;•.- . : :�.;.. onsultantOversight:" lt is eiipectecithatwe woirlcJ�ne., to'wok i .ge. - y ; g ` and_ nb_ subconsultants:would.bezequired -for this= projec� however;' sftiouldthescope 'ofwor]S : = = - 13 =";xy: from.that identi5ed. above,' :addit ion a su pport maybe re wi red ?A :C. Lz aretto -i% :associates, acting";„; - as lead consultant on the ro ect w'll interface with andcoordlriate •work_asslgnriients'for tarry '= = :i =j s brought in - t t _ - a - ubconsuitant ttme.° ":r ` - sT:1a ::■ Status Reports: In addition to updating the project schedule regularly, we will provide periodic verbal 14 and written status reports to City staff to ensure that all team members are comfortable with the process as well as the progress of the project. These would be in the form of personal meetings, emails, letters, and telephone conversations. ng Attendance : sofA > G :Lazzaretto& As sociates: will. a ttendzup _fo two. meEfings 1.5 , Agency_Board /QWCouncrl, as, requested or appropriate,_ to_ answer_. questions and updates :.;. i = : :; -Any additional m eetings :would be billed: of our, normal hourly rtes:' _ _ Associated Duties: In addition to those tasks identified above, we will provide all services related to 16 the analysis of Redevelopment Agency dissolution and general assistance as requested Generally speaking, these items will be included in the "not -to- exceed" figure identified below: however those tasks requested which are outside of this Scope of Work will be billed at regular hourly rates Should the Agency be interested in moving forward with the dissolution of the Agency upon completion oft is phase ofthe project, A.C. Lazzaretto & Associates would be happy to provide the necessary services — generally the remaining items identified in our original Proposal for Services — at that time under separate agreement. • From: Dominic Lazzaretto To. Lee Wnittenberg Date: 5/23/2002 Time: 9 42:30 AM Page 5 of 5 Lee Whittenberg City of Seal Beach May 23, 2002 Page 4 of 4 Price Proposal In order to complete this project, we propose that an actual time and materials agreement be established, based on the standard hourly billing rates identified below, with a "not -to- exceed" figure set at $17,500. This limit would include any costs associated with the Agency's bond counsel reviewing the outstanding indebtedness up to $2.500. In addition to the established figure, it is expected that Seal Beach would provide reimbursement for expenses incurred in direct association with the completion of this project. Such expenses would include duplication fees, photo processing fees, and the cost of gathering property and sales tax data from independent sources, if necessary. Travel to and from meetings would not be charged to the City. Hourly Billing Rates A.C. Lazzaretto & Associates _ • • °P osition 1Hour L ate Principal $135.00 .�. . :may �.,, .:....d,;, _ r.,.:K ::,�,:. = „� :�•:�::, . • , x ;::,. 'Senior'ssociate : fyk ;95:;00 -,=1 Associate $75.00 $ Senot =Analyst = jsw` ?QOaF:• • - r . ... .::ar- �:ax -. r�xot,.,t�:�.:�rvi�: -- .... •.;;t>xc•... -:�. -. :. Project Analyst $45.00 • ;:rSecretarizl &.Clerical ::':- >$24 50= :f�i Summary of Qualifications Our firm has been quite successful in the past in providing services for a wide range of redevelopment projects, including agency formation, project area adoptions, amendments, and mergers, and the whole gambit of implementation. While we have not worked on a project specifically dealing with agency dissolution, we feel that the depth of our experience in the field of redevelopment and our familiarity with the law will enable us to successfully complete the tasks required for this project. We also feel that we have asscrnbled a project team that is unsurpassed in ability and experience, while still providing a proposal that reduces overall costs to your agency. Thank you for providing us with the opportunity to propose on this exciting project. We look forward to seeing you at the Council Meeting on May 28 If you have any questions, or require any additional information, please call either Andy Lazzaretto or myself at (818) 569 -4526. Cordially, r c? Dominic Lazzaretto Associate • • -- Proposal for Consulting Services Evaluation of Proposed Redevelopment Agency Dissolution Seal Beach Redevelopment Agency Prepared: May 10, 2002 _M • rd. 1 E A.C. Lazzaretto & Associates P.O. Box 3073 Burbank, CA 91504 • Tel: (818) 569 -4526 Fax: (818) 558 -7088 Email: acl @aclazz.com www.aclazz.com A.C. Lazzaretto & Associates Table of Contents L INTRODUCTION 2 2. DESCRIPTION OF RELATED EXPERIENCE 4 3. GENERAL STATEMENT OF SERVICES AND QUALIFICATIONS 7 Philosophy 7 Benefits to the Client 7 Competitive Strengths 8 Collaborative Expertise 8 Services 8 4. IDENTIFICATION OF PROJECT PARTICIPANTS & STAFF RESUMES 10 Assignment of Duties 10 5. REFERENCES 14 6. SCOPE OF WORK 15 Project Timeline 17 7. LEGAL STIPULATIONS 18 Insurance Coverage 18 Non - Discrimination 18 Independent Contractor Status 18 8. PRICE PROPOSAL 19 9. ATTACHMENT 1- BAUER ENVIRONMENTAL SERVICES 20 May 10, 2002 Page i .11:16 L A.C. Lazzaretto & Associates 1. Introduction Legal Name of Firm: A.C. Lazzaretto & Associates Address: P.O. Box 3073 Burbank, CA 91504 • Telephone: (818) 569 -4526 Facsimile: (818) 558 -7088 Email: acl @acla7z.com Website Address: www.aclazz.com Type of Firm: Sole Proprietorship State of Incorporation: California Year Established: 1985 Key Personnel: Andrew C. Lazzaretto, Principal The firm of A.C. Lazzaretto & Associates, a full- service management and local government consulting firm, has extensive experience in all phases of redevelopment and economic development. We have assisted communities throughout southern California with redevelopment project area adoptions, mergers, and amendments, including the Cities of La Habra, West Covina, Santa Fe Springs, Paramount, Artesia, and South El Monte. In addition, we have recent experience in critically analyzing redevelopment projects in the Cities of Los Angeles, Arcadia, and Diamond Bar, wherein our firm reviewed project proposals and evaluated the fiscal and political merits of moving forward. In addition to many project area adoptions, mergers, and amendments, we have performed tax increment projections, housing studies, property acquisition and relocation coordination, housing set -aside projects, • feasibility assessments, and environmental management duties. While the dissolution of a redevelopment project is a highly unusual action, our experience in working with a diversity of projects will provide a strong background into the needs of the Seal Beach Redevelopment Agency. Finally, because we are a modest sized firm, we are able to be extremely responsive to any challenges that could occur during the course of a project and you are ensured that the company Principal will actively participate throughout the entire process. We would be able to initiate the project immediately and would expect that the project would be completed in approximately three (3) months. It is our understanding that this project would not include the actual dissolution action; rather, it would be an assessment, report, and recommendation on the impacts and issues that would arise should the Redevelopment Agency cease operations. Throughout every phase of the project, our firm would provide draft documents and regular updates to ensure that the ‘staff remained informed and had an opportunity to provide significant input into the ultimate conclusions and recommendations. May 10, 2002 Page 2 A.C. Lazzaretto & Associates VAL In addition to the members of A.C. La77 retto & Associates who will work on this project, it is anticipated that Sandra Bauer of Bauer Environmental Services would complete' an environmental review to ensure compliance with the California Environmental Quality Act (CEQA). We have worked with this firm in the past, which has demonstrated a strong . understanding of environmental issues and has a familiarity of working with local and statewide • public agencies. A complete description of the tasks each firm will perform along : with a description of their capabilities is included later in this document. The following pages more specifically identify our proposal for this project, including complete descriptions of the scope of work, project timelines, associated project experiences, resumes for key team members, references, and hourly billing rates. For more information on the capabilities of A.C. Lazzaretto & Associates, please visit our website at www.aclazz.com. • • • May 10, 2002 Page 3 A.C. Lazzaretto & Associates I ► • 2. Description of Related Experience The section below identifies the four most recent and related projects in which A.C. Lazaretto & Associates has participated, all of which happen to be ongoing projects. A listing of additional project experience is listed later in this document. In each of these projects, A.C. Lazzaretto & Associates was responsible for all document creation, coordination of subconsultants, and all consultations with governmental agencies and taxing entities, community organizations, and the public. While the projects listed below do not specifically match the requirements of this project, they will nevertheless provide a basis for being able to understand the key issues of the proposed action. Paramount Project Area Merger: A.C. Lazzaretto & Associates is currently assisting the Paramount Redevelopment Agency with an amendment and merger of its three existing redevelopment project areas: With the recent changes to the California Redevelopment Law, our firm has been charged with reviewing the modifications to the law and making recommendations on the fiscal impacts of those changes. Such reviews have included an analysis of the adopted and amended redevelopment plans, a review of legal opinions and court rulings, and creation of financial projections based on one or more proposed alternatives. Chinatown Redevelopment Project: Our firm has been retained by the County of Los Angeles Chief Administrative Office to review the proposed First Amendment to the Chinatown Redevelopment Project in the City of Los Angeles. A key function of this project includes a critical analysis of the benefits and drawbacks of continuing redevelopment in the project area. As such, exhaustive document review was necessary, financial analyses and cash flow projections were created, and a brief blight assessment was undertaken. Santa Fe Springs Project Area Amendment & Legal Reviews: A.C. Lazzaretto & Associates is currently assisting the .City. of Santa Fe Springs Community Development Commission with a review of its existing redevelopment projects to assess the benefits of amending the time limits to meet current laws. In addition, due to the recent Santa Ana Unified School District Decision, we have prepared a detailed analysis of the financial and legal impacts that the legal ruling would have on the City's finances. As with the other projects listed above, we have conducted a thorough review of the pertinent issues, prepared financial projections, and identified major and minor impacts that would result from taking various actions. Diamond Bar Project Review: The City of Diamond Bar has previously considered the adoption of a redevelopment project in their City, but the action was challenged by members of the community. The City has now hired our firm to review specific, smaller areas of the City to determine the viability of adopting a more refined project area. This analysis has required not only a blight assessment to determine feasibility, but also an analysis of the political and economic impacts of adopting a redevelopment project in an area of heightened scrutiny. While this project is at the opposite end of the spectrum of dissolving a redevelopment agency, many of the analyses are similar, including: affordable housing production requirements, long -term debt analyses, cash flow projections, and cost - benefit assessments. May 10, 2002 Page 4 • A.C. Lazzaretto & Associates • A.C. La77aretto & Associates has provided project management and consulting services' ervices . for numerous clients for over sixteen years. The following is a sampling of projects conducted by the firm. • Project Area Formations, Mergers, & Amendments • • City of La Mirada: Amendment No. 2 to the Industrial - Commercial Redevelopment Project Area City of Bellflower: Redevelopment Project Area No. 1 City of Paramount: Redevelopment Project Area No. 2 Redevelopment Project Area No. 3 • Paramount Consolidated Project Area • City of La Habra: Delta One Redevelopment Project Area Alpha Four Redevelopment Project Area • • La Habra Consolidated Redevelopment Project • City of South El Monte: Redevelopment Project Area No. 1 Redevelopment Project Area No. 2 City of Santa Fe Springs: Amendment No. III to the Amended Consolidated Redevelopment Project Area Washington Boulevard Redevelopment Project Area Amendment No. 1 to the Washington Boulevard Redevelopment Project City of Artesia: Redevelopment Project Area No. 1 City of Ar6adia South Arcadia Redevelopment Project • May 10, 2002 Page 5 A.C. Lazzaretto & Associates The following section briefly describes the current project client list of A.C. La77aretto & Associates and a brief identification of the type of work conducted. Current Pro'ect List ' 4 Agency t 4 Project(s) E City of Diamond Bar Project Area Location Assessment • Environmental Management Services City of Santa Fe Springs Superfund Redevelopment Project Review of the LAX Master Plan EIS /EIR County of Los Angeles Assessment of the Proposed Chinatown Project Area Amendment Irwindale Redevelopment Agency Project Area Administration & Implementation . Paramount Redevelopment Agency Adoption of the Paramount Consolidated Project Santa Fe Springs Community Redevelopment Project Implementation Development Commission Project Area EIR Update West Covina Redevelopment Agency Project Area Administration & Implementation May 10, 2002 Page 6 ;. A.C. Lazzaretto & Associates 3. General Statement of Services and Qualifications Background A.C. Lazzaretto & Associates is a highly respected professional research & management consulting firm specializing in servicing municipal agencies. Our expertise includes: • Blight Analyses & Project Area Adoptions, Mergers, & Amendments • Negotiating Owner Participation & Disposition & Development Agreements > Grants Applications and Administration The Use of Housing Set-Aside Funds > Implementation Plans Under AB 1290 • Executive Recruitment & Temporary Managerial Staffing The firm was founded in 1985 by Andrew C. La77aretto, Jr., who has more than 37 years of general administration & redevelopment management experience. Prior to founding the company, Mr. Lazzaretto held a number of senior management positions with several California municipalities. Foremost is his experience as City Manager & Executive Director for the Cities of Burbank, Alhambra, Pomona, Stanton, & Walnut. • Mr. La77aretto is a Corporate Member of the International City & County Management • Association .& a member of the American Society of Public Administration, Urban Land Institute, Western Governmental Research Association, & the Academy of Political Science. Mr. La7zaretto has published many insightful articles addressing a wide range of issues; has often been quoted in local & regional newspapers, journals, & magazines regarding his perceptive opinions on current topics; & has made public presentations to many groups, including the League of California Cities, the California Contract Cities Association, & the California Redevelopment Association. Philosophy Our guiding philosophy is to develop a close working relationship with each client, their staff, & other specialists; & to provide authoritative analysis & carefully considered recommendations throughout all phases of the project. Quality work & excellent relationships with our clients are our primary goals. Benefits to the Client A.C. Lazzaretto & Associates has a commitment to provide high quality redevelopment & management consulting services for all aspects of municipal government. We utilize our diverse May 10, 2002 Page 7 i ce , A.C. Lazzaretto & Associates experience in public administration to serve our clientele with accurate & reliable guidance, information, project management, & implementation. Working with A.C. Lazzaretto & Associates provides several key benefits otherwise unavailable to the client. These 'benefits include: ' r Each Project Guaranteed To Be Done On Time & To The Letter Of The Law • > Work Completed In An Efficient, Cost Effective Manner Reduced Confrontation With the Public Through Personal Consultation • Our Technical Expertise Enables Clients To Focus On Project Goals • Project Members Are Provided With Detailed Schedules To Outline Project Procedures > Our Staff Will Attend Public Hearings To Justify Actions & Clarify Laws • Staff Informed & Updated Of Progress Regularly Competitive Strengths • A.C. La77aretto & Associates is unique in that the company principal is personally involved in each project. The professional staff is thoroughly trained to ensure consistency, accuracy, & reliability in the quality of report & document preparation. We have assisted a broad variety of clients with an equally broad range of projects, giving us the capability of being very responsive & extremely reliable. A.C. La77aretto & Associates has created an atmosphere of professional expertise that has generated repeat assignments from over 90% of its clientele. Our extensive management experience, ongoing commitment to keeping abreast of current changes in the law & our knowledge of economic & development trends in the industry are utilized to best serve the specific needs of each client. All staff members are computer literate & have an advanced working knowledge of the latest versions of the most popular software applications. In addition, A.C. La77aretto & Associates has a presence on the Internet & is well versed on its capabilities & associated functions. Collaborative Expertise The firm has established working relationships with the following professionals to add to its overall strength: environmental & hazardous waste remediation consultants; relocation negotiation experts; attorneys; engineering, planning, & financial firms; oil well abandonment & utility relocation contractors; & county & state officials. Services • A.C. La7zaretto & Associates offers a variety of•professional services spanning the full cycle of project planning, development, & implementation in both redevelopment & general municipal management. We present timely & thorough communication of findings & recommendations, either verbally, or in a written format suitable for use by the client. On those projects that must May 10, 2002 Page 8 A.C. Lazzaretto & Associates conform to the California State Redevelopment Act, all documents are written to comply with the Health & Safety Code, Section 33000, ET SEQ. The specific services offered by the 'firm include: • • Redevelopment Project Formation, Merger, & Amendment Blight Studies Feasibility Analyses Tax Increment Projections & Audits Public Information & Hearing Proceedings Public Presentations Follow -up Documentation Taxing Entity Consultation Project Implementation, Management, & Administration Economic Development Public Safety Service Analyses Developer Negotiations Proforma Analyses Affordable Housing Studies & Projects Property Acquisition & Relocation Coordination • Environmental Management • Used Oil Recycling & Source Reduction (AB 939) Compliance Grant Application, Administration, & Management Executive Recruitment May 10, 2002 Page 9 •� A.C. Lazzaretto & Associates 4. Identification of Project Participants & Staff Resumes The following pages contain the resumes of the professional members of the staff of A.C. Lazzaretto & Associates that will participate in this project. Each person listed has attained a college degree and each has a Masters degree in Political Science, Organizational Development, or Public Administration. In addition to attending institutions of higher learning, all of the staff members have extensive practical experience working with both public & private corporations. Assignment of Duties • For this project, Dominic La77aretto, Associate, will be the Project Manager, providing the day - to -day responsibilities, including meeting attendance, report and document generation, and financial projections. Andrew Lazzaretto, the company Principal, will provide oversight, direct support, and assistance where appropriate. This combination affords the City the opportunity to have the depth of knowledge of the company Principal, when necessary, while keeping costs reasonable. Both Dominic and Andrew have participated in all of the project area adoption actions described above and both have a deep understanding of the tasks that will be required to complete this project. Andrew Lazzaretto will attend all public meetings to provide the insight that can only be provided by a person with over 37 years of redevelopment experience. :Bauer Environmental Services will be responsible for the environmental review of the project areas and the proposed action. Sandra Bauer, the firm Principal, will conduct the necessary reviews and attend all relevant meetings. A full description of their qualifications is included as Attachment 1 to this proposal. • May 10, 2002 Page 10 A.C. Lazzaretto & Associates Andrew C. Lazzaretto, Jr. • Principal . Experience Mr. Lazzaretto has in excess of 37 years of professional experience in public & private administration, redevelopment, & :economic development. His background includes management & administration of projects involving economic development, community redevelopment, general management, economic analysis, environmental management, & public finance. Prior to establishing the consulting firm specializing in services to municipalities & redevelopment agencies, Mr. Lazzaretto served as City Manager & Executive Director of Redevelopment for the Cities of Burbank, Alhambra, Stanton, Pomona, & Walnut. He also held administrative positions in the Cities of Montebello & Lynwood. Under his direction industrial parks were developed, downtown areas were revitalized & redeveloped, & major public & private improvements were planned & implemented. In the course of bringing these changes about, Mr. La77aretto helped place over $200 million in public financing, • primarily using Tax Increment Financing. Responding to the dynamics of a changing society, Mr. La77aretto has guided the firm into important new activities. Recently, he has become actively involved in the formation & administration of publicly assisted housing projects utilizing Tax Increment Housing Set -Aside Funds. Providing first time Low- & Moderate - Income families with the opportunity of purchasing homes has been one of his most rewarding experiences. In addition to these redevelopment- oriented activities, Mr. La77aretto has also become very involved in the field of Environmental Management. While assisting various client cities he has developed Source Reduction & Recycling Elements, Household Hazardous Waste Elements, Nondisposal Facility Elements & other strategies in response to AB 939; reviewed & critiqued environmental site assessments & remediation plans; provided economic & environmental review & analysis for the development of a 3,000 tons per day Materials Recovery Facility (MRF); monitored & analyzed the citing & expansion of a major regional sanitary landfill; made presentations to the State Regional Water Quality Control Board, the Department of Toxic Control Substances, the Department of Health Services, the County Local Task Force, & the Waste Management Commission; administered & supervised the clean-up of contaminated properties; & developed a working knowledge of Federal & California May 10, 2002 Page 11 • A.C. Lazzaretto & Associates environmental laws & regulations, & the California Environmental Quality Act (CEQA). Mr. Lazzaretto is currently serving as Redevelopment Consultant to the Cities of Santa Fe Springs, Irwindale, and West Covina. • Education Master of Science California State University, Los Angeles, California Organization & Management & Personnel Bachelor of Arts St. Mary's College of California, Moran, California Political Science & Public Administration Member International City Management Association American Society for Public Administration Urban Land Institute Western Governmental Research Association The Academy of Political Science • May 10, 2002 Page 12 • A.C. Lazzaretto & Associates Dominic D. Lazzaretto Associate . Experience Dominic Lazzaretto has assumed redevelopment related responsibilities in preparing Implementation Plans under AB 1290 for the Cities of Santa Fe Springs, Perris, La Habra, La Palma, Montebello, Bellflower, Vista, & San Juan Capistrano; assisting in the formation & amendment of project areas in the Cities of Paramount, La Habra, Santa Fe Springs, & Artesia; & expediting the Section 108 loan & EDI Grant application process for the Cities of Norwalk & Pico Rivera. Mr. Lazzaretto has also reviewed Disposition & Development documents for the City of Pico Rivera & created Property Disposition Reports for the Cities of Norwalk & Fresno. In addition to assisting with redevelopment _ activities, Dominic has managed projects dealing with various municipal functions, including the research & implementation of the Safety Service Contracts in the Cities of Santa Fe Springs, Whittier, La Mirada, La Habra Heights, & Rancho Cucamonga; working with Joint Powers Authorities, the Cities of Bellflower, & Santa Fe Springs in applying for & managing Recycling Grants; & assisting with the background investigation process for potential management personnel in the City of Arcadia. He has also been a key member of the team that revised Southern California Edison's Electric & Magnetic Fields Design Guidelines. Prior to joining the firm in 1994, Mr. Lazzaretto held several positions within the hospitality industry, where he worked directly with corporations of all sizes & a number of local, state, & federal agencies. The professional expertise that Dominic brings to the firm includes project research & development, financial modeling, public outreach, & feasibility assessments. He has an excellent understanding of the California Redevelopment Law, as revised by AB 1290, & a working knowledge of CEQA & NEPA requirements. Education Master of Public Administration California State University, Long Beach, California Public Policy & Administration Bachelor of Science with Honors & High Distinction Pennsylvania State University, University Park, Pennsylvania Hotel, Restaurant, & Institutional Management Member Municipal Management Assistants of Southern California California Redevelopment Association May 10, 2002 Page 13 A.C. Lazzaretto & Associates • 5. References The following references represent a list of persons who employed or worked with A.C. La77aretto & Associates on Project Area adoption, merger, or amendment projects. Additionally, several of the contacts listed below have employed our firm for redevelopment implementation projects. Mr. Fred Latham, City Manager City of Santa Fe Springs 11710 Telegraph Road, Santa Fe Springs, CA 90670 (562) 868 -0511 Amendment No. III to the Consolidated Redevelopment Project Area & Amendment No. 1 to the Washington Blvd. Project Area Mr. Tom Mauk, City Manager & • Executive Director of the Redevelopment Agency City of La Habra 201 E. La Habra Blvd., La Habra, CA 90631 • (562) 905 -9700 Delta 1, Alpha 4, & Consolidated Project Areas Ms. Lari Sheehan, Assistant Administration Officer Los Angeles County CAO's Office Kenneth Hahn Hall of Administration, 500 W. Temple, Room 723, Los Angeles, CA 90012 (213) 974 -1174 Chinatown Redevelopment Project & LAX Master Plan EIR/EIS Review Mr. William Holt, Executive Director California Joint Powers Insurance Authority 4952 La Palma Ave., La Palma, CA 90623 (562) 402 -6372 Redevelopment Project Areas No. 2 & 3 (in Paramount) Mr. Tom Parrington, Attorney at Law Tompkins & Parrington P.O. Box 589, Alhambra, CA 91802 -0589 (626) 289 -3727 Various Project Area Adoptions May 10, 2002 Page 14 , � A.C. Lazzaretto & Associates 6. Scope of Work • The following section will identify the specific tasks that will be completed throughout this project. Costs for the project are described under Price Proposal on Page 19. It is our understanding that this project would not include the actual dissolution action; rather, it would be an assessment, report, and recommendation on the impacts and issues that would arise should the Redevelopment Agency cease operations. The list below is merely provided as a framework for the evaluation of progress on this project. The proposed outline of services has been prepared in a broad fashion in order to give the Agency as much flexibility as possible. Many of these tasks — while generally organized in the order that they will be completed — will be conducted simultaneously and incorporated into other actions. The tasks that have specifically been identified at this time are as follows: Scope of Work S t i._ 5 . :.. - .•.. K :. ,� . . b y Task ' Description'of Action " ' � - Kick -Off Meetings: A series of meetings between team members and City staff to discuss 1 project specifics, identify goals, and familiarize ourselves with program objectives. Creation of Project Schedule: Based on legal requirements and information gathered at . the kick -off meetings, a project schedule will be created which identifies target dates. This 2 schedule will contain any pertinent code references and will be updated regularly as the project evolves. Once complete, the Schedule will provide a history of the actions taken and have references to any resolution numbers and Ordinances that are adopted as part of this project. Document Review: In initial stages of the project, A.C. Lazzaretto & Associates will gather pertinent documents from the Redevelopment Agency including the adopted Redevelopment Plans and any associated amendments, Implementation Plans, annual 3 budgets, disposition and development agreements, pass- through agreements, land use covenants, and staff reports for project- related activities. We will review these documents to identify any roadblocks to dissolution of the Agency and to get a better feel for the goals and objectives of each project area: These documents will also assist in the more detailed analyses that will follow. Legal Issues Identification: With the assistance of your Agency attorney, we will conduct a thorough review of court rulings and legal requirements concerning the dissolution of a 4 redevelopment agency. Califomia Redevelopment Law has recently been updated to • require additional conditions prior to closing redevelopment projects and this analysis will ensure that the requirements and the process of dissolution are clearly understood. • Blight Analysis: This will be a general physical analysis of the project areas to identify current conditions. Photos will be taken to support findings. In addition, property tax, crime 5 data, vacancy rates, and other available financial information will be reviewed to identify the economic conditions of the project areas. The essential question to be answered in this step will be have the goals and objectives of the redevelopment agency been satisfied such that dissolution would be justified ?" May 10, 2002 Page 15 A.C. Lazzaretto & Associates l } Task', • Tax Increment Projections /Fiscal Analysis: Through a review of recent tax increment history and an analysis of project area budgets_and financial statements, we will establish detailed tax increment projections and assess the fiscal impact of closing the project areas and terminating the Redevelopment Agency. This step will also include an analysis of tax 6 increment that would be passed through to the Low and Moderate Income Housing Fund as well as to affected taxing entities. In addition, the fiscal analysis will review any long- term debt (bonds, loans, etc.) that is outstanding to ensure that they can be retired prior to dissolution of the Agency and a review of Agency assets will be conducted to identify whether they need to be disposed of prior to dissolution or if they can be transferred to the City. Affordable Housing Production Requirements: Recent changes to the redevelopment law now require certain housing requirements be met prior to declaring that no further need 7 for redevelopment exists. We will assess past affordable housing development in the project areas as well as in the City as a whole to determine if these requirements have been met. Should additional affordable housing production be needed, we will detail the type and number of units needed prior to dissolving the Agency. Taxing Agency Consultation: While it is expected that the taxing entities affected by the redevelopment project areas would welcome the termination of the projects, we will offer 8 consultation to these agencies to ascertain their position on the proposed action. Any letters of support received by taxing entities would be helpful if challenges to the dissolution were made later. . Project Area Committee Consultation: Should there be one or more project area committees in the existing project areas, we will review their by -laws to ensure that they would not affect the dissolution process. In addition, we will meet with the PAC to review 9 the method of dissolution and the reasons for conducting such an action. Their input and approval would be sought. As with the taxing agency consultation, this step would not be integral to a dissolution action, but would serve to support any future actions taken by the Agency. Public Outreach: We would recommend holding at least one public information session during this process to allow the public a method of addressing concerns and asking questions prior to moving forward with dissolution. This would help to identify any major 10 concerns that would arise out of considering dissolution. If the action were seen by the public as being controversial, we would recommend increasing the number of public information meetings. Finally, we would also offer consultation to any active community organizations in the project areas. Environmental Review: This will be the primary task of Bauer Environmental Services. A review of the adopted Environmental Impact Reports as well as any subsequent, relevant 11 documents will be conducted to ensure that all CEQA requirements have been met by the Agency. That is, the review will assess .whether all mitigation measures have been properly adopted and all environmental impacts have been minimized to the extent possible prior to the closing of the redevelopment projects. Report of Findings & Recommendation: Based on the information gathered in the previous steps and the results of the various analyses, A.C. Lazzaretto & Associates will 12 prepare a preliminary report of findings and make recommendations on future actions. It is expected that City staff will review and comment on the draft document prior to the finalization of the report. We would expect the document to be finalized after two draft versions. May 10, 2002 Page 16 A.C. Lazzaretto & Associates Task t`<< n Description of Action r r i Presentation of Findings: As part of the completion of this project, we will present our 13 findings and recommendations to the City CounciVRedevelopment Agency. This can simply be in the form of distributing the final version of our report, but we would also • anticipate a PowerPoint presentation at a public meeting of the bodies. • Consultant Oversight: A.C. Lazzaretto & Associates, acting as lead consultant on the 14 project, will Interface with, and coordinate work assignments for, Bauer Environmental Services and any other subconsultants brought in to assist on this project. Status Reports: In addition to updating the project schedule regularly, we will provide 15 periodic verbal and written status reports to City staff to ensure that all team members are comfortable with the process as well as the progress of the project. Meeting Attendance: Members of A.C. Lazzaretto & Associates will be in attendance up 16 to two meetings of the Agency Board, as requested or appropriate, to answer questions, provide updates, and to ensure that any legal requirements are met Any additional meetings would be billed at our normal hourly rates. Associated Duties: In addition to those tasks identified above, we will provide all services related to the analysis of Redevelopment Agency dissolution and general assistance as 17 requested. Generally speaking, these items will be included in the "not -to- exceed' figure identified below; however those tasks requested which are outside of this Scope of Work will be billed at regular hourly rates. Project Timeline It is expected that the analysis should be completed in 90 days from the initiation of the project, with our preliminary report of findings coming after 60 days. As stated in the Scope of Work, a specific project timeline and schedule will be established at the initial stages of the project. • May 10, 2002 Page 17 • A.C. Lazzaretto & Associates 7. Legal Stipulations A.C. Lazzaretto & Associates agrees to comply with all federal, state, and local laws, regulations, and guidelines associated with the completion of this project. Specifically, we agree to the terms listed below. Insurance Coverage Upon commencing the work, we will provide Certificates of Insurance and Endorsements for the following coverages. Your City /Agency will be added as an additional insured on our policies: • Worker's Compensation covering all persons who may be employed directly or indirectly in carrying out the work program as outlined; > General Liability and Property Damage Insurance to protect against claims and liabilities from personal injury, death, or property damage arising from study activities, providing protection of at least $1,000,000 for bodily injury or death to any one accident or occurrence and at least $1,000,000 for property damages; and > Automobile liability insurance in an amount not less than $500,000 combined single limit per accident for bodily injury and property damages covering owned, non - owned, and hired vehicles. At this time, it is not possible of A.C. La77sretto & Associates to obtain professional liability insurance, typically referred to as errors and omissions coverage. This type of insurance coverage is not available in our industry for the type of work our firm does. At such time that insurance companies are willing to write policies for management consulting, we would purchase the insurance. Non - Discrimination A.C. La77aretto & Associates hereby agrees not to discriminate on the grounds of race, religion, color, sex, age, national origin, or handicap in the completion of this project. Independent Contractor Status A.C. Lazzaretto & Associates understands that all services performed under this project shall be performed as an independent contractor and not as an agent of your agency. Your agency shall not be considered the employer, co- employer, or joint employer of, or with the officers, employees, or agents of A.C. Lazzaretto & Associates. Our firm shall have the sole control, supervision, direction, and responsibility for deciding the manner and means of providing the services, except as outlined in the contract and its attachments or exhibits. May 10, 2002 Page 18 A.C. Lazzaretto & Associates KIM 8. Price Proposal • We propose that an hourly rate be charged based on our standard billing rates identified below, with a negotiated "not -to- exceed" figure established. In addition to the established figure, it is expected that Seal Beach would provide reimbursement for expenses incurred in 'direct association with the completion of this project. Such expenses would include duplication fees, mailing of notices, photo processing fees, and the cost of gathering property and sales tax data from independent sources. Travel to and from meetings would not be charged to the City. Hourly Billing Rates A.C. Lazzaretto & Associates Position : , r Hourly- Rate Principal $135.00 Senior Associate $95.00 Associate $75.00 Senior Analyst $55.00 Project Analyst $45.00 Secretarial & Clerical $24.50 • • The table below identifies the total expected cost for the Project including the fees for subconsultants. Reimbursable expenses and tasks completed outside the identified Scope of Services would be in addition to the "not -to- exceed" figure set for this Project. Total Anticipated Fee Evaluation of the Proposed Dissolution Of the Seal Beach Redevelo , ment Aaenc firm ; °Cost - a: A.C. Lazzaretto & Associates $20,500 Bauer Environmental Services $4,500 Total $25,000 Reproduction, blueprinting, messenger service and other direct expenses will be charged at cost. A subconsultant management charge of fifteen (15 %) percent will be added to the direct cost of all subconsultant services to provide for the cost of administration, subconsultant consultation, and insurance. May 10, 2002 Page 19 A.C. Lazzaretto & Associates • 9. Attachment 1 - Bauer Environmental Services Statement of Qualifications May 10, 2002 Page 20 t i a. I , _ . • QUALIFICATIONS STATEMENT Bauer Planning and Environmental Services, Incorporated (BPES) provides environmental, demographic and planning services to public agency and private sector clients with a major emphasis on environmental issues associated with water supply, wastewater treatment, reclaimed water, Best Management Practices programs, and watershed studies. BPES clients include Califomia water and wastewater agencies, which represent the primary professional orientation of the firm, as well as cities, engineering companies, private landowners, citrus producers, and the sand and gravel industry. As a small business, BPES is committed to personal service, high quality products, close communication, and enduring client relationships. The firm is based in Tustin, California. Ms. Bauer's background includes Master's and Bachelor's Degrees from University of California at Irvihe in environmental studies, and 25 years of professional environmental consulting experience. In 1982, Ms. Bauer co- founded Michael Brandman Associates, a major California environmental consulting organization, and served as a partner of that firm until establishing BPES in March of 1988. Ms. Bauer is past Treasurer of the statewide Association of Environmental Professionals, served as a member of the National Water Research Institute Task Force, acted as Secretary of the Malibu Creek Watershed Natural Resource Plan Executive Committee, and is past President of the Los Alisos Water District Board of Directors, on which she served between 1984 and 1995. She has been guest speaker at a variety of educational institutions and conferences. Ms. Bauer's resume, including information regarding educational background, professional history and affiliations, and publications, is provided on the following page. A summary of the specific areas of environmental expertise and services offered by BPES is included on the page thereafter, followed by client references. A summary of BPES project experience (including general environmental consulting, demographic analyses, and studies of water, reclaimed water and watershed issues) is presented as the final component of this qualifications statement. Bauer Planning and Environmental Services, Inc. LIRBAN'& OOMMUNITYd?LANNING: ENVIRONMENTAL ANALYSIS 15901 Red Hill Avenue • Suite 210 • Tustin, Califomia 92780 • Tel 714.258.8055 FAX 714.258.7755 bauer7cea rthlink. net • Consideration of Consultant Services — Dissolution of Redevelopment .4gencv Redevelopment Agency- Staff Report May 28, 2002 • • ATTACHMENT • REQUEST FOR PROPOSAL RE: DISSOLUTION OF REDEVELOPMENT AGENCY, CITY LETTER DATED APRIL 25, 2002 • Dissolution of Agency.RDA Staff Report 9 .,yam ; „. 9 „ , , ..,x L .`- : > r ,r, „L e a t .• fi .;:,v.G > :....; wr: -c - :f a.: _�: -�-� ; - . ac•-;+t r . - ..a�xrr. t ^ •S�wti -. -. �, � r� -_ .7r� "T' :��Hs°f .�m�. --'+� �.. ^ r }_ .s'�?.�„yy;'a �"'��'�'$ • �r ¢rs ..,40 ~fi x -„,.... 4 C K T� - . 1" „ '2� :. .3° _ �i '.Fx' ..4.5 +-.t' ,-, -- : '^ ' 9:. . - = � . - .Y r,�.. � � -,,'� °� 7 - a,,. ^v,.,'sr•�°�' .. 1 3` � �•• s- �..,. '�-' ..-� "`�. m d� "'yam"'': Rw�� ,f3�.x'9��y� :� •r �"`.,�•� -.... �'V�9 -x4� `, � _, � r5_ !' �� `, ? � f o ' ii ... may .. "^ a - .c L . • . ,a J� iti-�. --sa S,. I ' c 3. -- � . - . ' if,-- - -°a ter. . a ,a. '- 7 i g . 3 • g r .. , cam k `° i ,.- -` r.t. - : _ �+ .. & LG'9 "�: y "+ T . -_ 3._. - _�� rc�- "-a.F X ,z.� c y c x• -y^ ,- �, .; �, ..s - � � _ fS.t� � -+ `L`[ ' 's• Y l . a-_ ,-=,+ -.b -- a y • -e tt^ 'a�' . aa4a7,-__ "w :• ^-d ,,.r 'We •t `-.- - 3' . - _«- i`''s r'' -'vd - #y ^^ a - ,='tin �.5�, y 1 .' : _ " e_ h -�' 4 .;f "F=_ -'. ;�_,e•;:� - � ..= '=''Fj: 3:.:;b ro- �,.� �:•w•. � .s= *..;x�:;: `.._ a..- ".-y:'�� _ ... : ,.:.. K rt . - -. n• =�- -�• � .a,- r..,- - �.. ,���F • SGi S' - P"�.__ � :i4� -a�+' v i.a..,,�; � .c,'s: -.� a�,. -r_ w• -,. �"- r - a..� f• � - - - - -x�`.- -- - `.'�;'-: �.�-' - ce�'+'"• : 7��-s•- �,.� . �.r -*'� � r ... R ? r; .•_wr_. �.�: y �?.�;-a.�:'_,.�-H Ap ril 25 002 L 0 r A. C. Lazzaretto & Associates Attn: Andrew Lazzaretto P.O. Box 3073 Burbank, CA 91504 • Dear Mr. Lazzaretto: . SUBJECT: CITY OF SEAL BEACH — . PROPOSAL RE: • DISSOLUTION OF REDEVELOPMENT AGENCY The Redevelopment Agency of the City of Seal Beach has requested staff to have an evaluation prepared of the benefits and detriments of the dissolution of the Redevelopment Agency. The City Manager /Executive Director has requested that various firms prepare proposals for Agency consideration of a cost proposal for a study of the process, financial impacts, and other issues of concern regarding a potential dissolution of the Redevelopment Agency of the City of Seal Beach. In accordance with this direction from the City Manager/Executive Director, I am including two documents for your reference in preparing the proposal, which will include: ❑ scope of work ❑ time schedule ❑ fees ❑ capabilities to perforrn requested services ❑ proposed sub- consultants and capabilities. The following documents are provided for your use in preparing the proposal: ❑ 2000 -2005 AB 1290 Implementation Plan, April 2002 ❑ Financial Statement, June 30, 2001 The City Manager /Executive Director is hopeful of presenting a recommendation to the Agency on Tuesday, May 28, 2002. In order to evaluate the proposals and conduct interviews with the responding firms, please submit 10 copies of your proposal to my office by 5:00 PM, Monday, May 13, 2002. Interviews would be conducted the week of May 20, 2002. C: \M Docunents\RDA'Dissolution or r : P - Lazzaretto Letter doc'.LW\0= -25 -02 • Transmittal Letter to Lazzaretto ce Associates re: Proposal for Potential Dissolution of the Redevelopment Agency of the City of Seal Beach April 25, 2002 Please contact my office at your earliest convenience if you require additional . information or have questions regarding the enclosed documents. I can be reached at. (562) 431 -2527, extension 313, or by e -mail at lwhittenberg @ci .seal- beach.ca.us. Sincerely, i , r' Lee « hrttenbera Director of Development Services Enclosures: (2) • Enclosure 1: "2000 -2005 Seal Beach Redevelopment Implementation Plan ", adopted by the Seal Beach Redevelopment Agency April 22, 2002 Enclosure 2: Seal Beach Redevelopment Agency Financial Statements, June 30, 2001 cc: City Manager (w /o enclosures) • Dissolution of Agency RFP - Lazzaretto Letter Consideration of Consultant Services — Dissolution of Redevelopment Agency Redevelopment Agency Staff Report May 28, 2002 • ATTACHMENT 6 RESOLUTION NO.Z)a - a-, A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH AUTHORIZING BUDGET AMENDMENT NUMBER 28 FOR THE 2001 -2002 FISCAL YEAR • • • Dissolution of Agency.RDA Staff Report 10 Consideration of Consultant Services — Dissolution of Redevelopment Agency . • Redevelopment Agency Staff Report May 28, 2002 RESOLUTION NO. 6 cV -a- A RESOLUTION OF THE REDEVELOPMENT • AGENCY OF THE CITY OF SEAL BEACH AUTHORIZING BUDGET AMENDMENT NUMBER 28 FOR THE 2001/2002 FISCAL • YEAR • THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH DOES HEREBY RESOLVE: WHEREAS, the fiscal year budget requires budgetary amendments as outlined below: CURRENT PROPOSED BUDGET DEPT ACCOUNT BUDGET . BUDGET AMD (DIFF) • Redevelopment Agency — Riverfront Project Area Contract Prof. Services 063-081-44000 $ 5,000 $30,000 $25,000 • NOW, THEREFORE BE IT RESOLVED that the Redevelopment Agency of the City of 'Seal. Beach hereby adjusts Redevelopment Agency - Riverfront Project Area Contract Professional Services. PASSED, APPROVED AND ADOPTED by the Redevelopment Agency of the City of Seal Beach at a meeting thereof .held on the day of 2 002. AYES: Agencymembers NOES: Agencymembers ABSENT: Agencymembers ABSTAIN: Agencymembers Dissolution of Agency.RDA staf Report 1 1 Consideration of Consultant Services — Dissohution of Redevelopment Agency Redevelopment Agency Staff Report May 28, 2002 • Chainnan • 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 Redevelopment Agency of the City of Seal Beach, at a regular meeting thereof held on the day of , 2002. Joanne M. Yeo, City Clerk/Secretary Seal Beach Redevelopment Agency • • • 12 Dissolution of Agency.RDA Staff Report Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report February 28, 2005 ATTACHMENT 9 REDEVELOPMENT AGENCY MINUTES - MAY 28 2002 Dissolution of Agency, Phase II.RDA Staff Report 2 22 Page Seven - Redevelopment Agency Minutes - May 28, 2002 AGENCY REORGANIZATION FILE COPY SELECTION OF•CH. IRMAN Chairman Yost nominated Mrs. Campbell as Chairman for year 2002/2003. Agencymember Larson seconded the motion. No other nominations were made. AYES: Antos, Campbell, Doane, Larson, Yost NOES: None Motion carried Chairman Campbell assumed the conduct of the meeting. SELECTION OF VICE CHAIRMAN Agencymember Doane nominated Mr. Antos as the Vice Chairman for year 2002/2003. Agencymember Yost seconded the motion. AYES: Antos, Campbell, Doane, Larson, Yost NOES: None Motion carried RESOLUTION NUMBER 02 -2 - CONSULTANT SERVICES - DISSOLUTION OF REDEVELOPMENT AGENCY The Director of Development Services noted that the report presented by staff is the result of a request to bring back to the Agency suggestions as to how to look at dissolving the Redevelopment Agency. He reported that Requests for Proposals were distributed, two proposals were submitted, also a letter from a firm that received a proposal indicating that unless the City was willing to take on the obligations of the Agency they did not see any reason for the City to even consider such an action therefore did submit a proposal, that letter and both proposals provided with the agenda report. The Director mentioned that interviews were conducted with both firms, based thereon they were requested to submit a revised letter proposal that focused more on the issues of getting to the point of whether or not the City wanted to proceed to formal hearings to consider dissolving the Agency, should that be the determination a number of additional, more detailed studies will be required to take such action, both firms have sent back proposals for the limited scope of work that outlines what basic actions would be necessary to dissolve the Agency, the obligations of the Agency and how those obligations would be resolved, as well as the issue of what will happen to the assets that are owned by the Agency, properties, leases, etc. The Director noted that representatives of both firms were present, it is the opinion of staff that either firm is qualified to do the work, both have a clear understanding of Redevelopment Law, and although both indicated this type of action is not one that they have a number of requests to consider it is something that they feel they can deal with. The cost of the first phase of services are $11,500.00 for the firm of Keyser Marston Associates, Inc., and $17,500.00 for. A. C. Lazzaretto & Associates, should the Agency determine to retain one of these firms a Resolution has also been prepared to amend the Agency consultant budget to reflect a cost amount of up to $25,000.00, and noted that the interview panel consisted of the City Manager, City Attorney, and Director of Development Services. Page Eight - Redevelopment Agency Minutes - May 28, 2002 . however that Redevelopment Agency actions are governed by State law and there needs to be certainty that those provisions are,complied with. Chairman Campbell mentioned that prior to the last meeting she met with the Finance Administrator to obtain •some bottom line facts, the City has an assessed valuation of $2.6 billion, it receives a little over $2.8 million in regular property taxes, that could be higher however there is a large percentage of pre - Proposition 13 residences, about thirty to thirty -five percent, which are not going away, the situation is that the second generation is moving back to the parents home, . living there and taking advantage of the property tax benefits by being placed on the deed and the parents have moved to Leisure World with the second generation paying for the new residence. The City also received $1.38 million from the Riverfront Project Area, that is twenty - seven percent of the property tax received, the City can not afford to lose that money, the key issue is that those properties are in the Redevelopment Agency and it takes . about $740,000 to $750,000 per year to service the debt, the remainder of the tax increment is money that can be used on other projects, given that this is a City that is in need of recurring revenues that is important. She noted that Redevelopment funds in past have gone to build the Mary Wilson Library, bought land for the Public Works Yard, and about to build a pump station behind the Trailer Park which will keep Old Town from flooding. As a point of information, there are three libraries in the City, one in Leisure World where when the library system was in 4</ financial difficulty Leisure World purchased it from the County, there is the Mary Wilson Library in Old Town and - the Rossmoor /Los Alamitos Library in the Rossmoor Shopping Center yet technically in Seal Beach, the people of College Park East use the Rossmoor /Los Alamitos Library yet the CPE property taxes do not go to service that library rather the Mary Wilson Library, to that she inquired of the Orange County librarian what would happen if the CPE taxes were to • go to the library they use, the response was that the Mary Wilson Library would need to be closed, that she did not pursue further. Chairman Campbell said it is likely there are some cities that may abuse the Redevelopment Agency however Seal Beach is not one of them, the letter from the Davis Company basically states that the Agency could be dissolved if the Agency has no outstanding bonded indebtedness or unpaid loans, indebtedness or advances....if the City agrees to assume "all outstanding bonded indebtedness, unpaid loans and advances and legally binding contractual obligations it could be dissolved," however there is no way the City could take $750,000 in loan services, and if the Agency were given to the County the City would then be giving up all of the additional money that is received, no additional land is being placed into the Redevelopment Agency. Given the information she received from the Finance Administrator she could see no reason to spend $17,000 or $20,000 to hire a consultant to tell the City and Agency the same facts, the firm that did not submit a proposal has set forth what the guidelines are, which is what the others will also say, she can not support spending that kind of money for something that is already known, her feeling is that that money can be put to better use by helping the residents of this community. Page Nine - Redevelopment Agency Minutes - May 28, 2002 advances....if the City agrees to assume "all outstanding bonded indebtedness, unpaid loans and advances and legally binding contractual obligations it could be dissolved," however there is no way the City could take on $750,000 in loan services, and if the Agency were given to the County the City would then be giving up all of the additional money that is received, no additional land is being placed into the Redevelopment Agency. Given the information she received from the Finance Administrator she could see no reason to spend $17,000 or $20,000 to hire a consultant to tell the City and Agency the same facts, the firm that did not submit a proposal has set forth what the guidelines are, which is what the others will also say, she can not support spending that kind of money for something that is already known, her feeling is that that money can be put to better use by helping the residents of this community. Yost moved, second by Antos, to allow the public to comment. There was no objection voiced. Mr. Jim Caviola, Seal Beach, said Chairman Campbell just provided the answer to this whole issue, it was mentioned that the Agency brings in $1 million in increment, the debt service is $750,000, that is a net of up to $300,000 remaining, the Agency needs to spend twenty percent on low income housing, that is the problem, that is $200,000 per year, that leaves $100,000, if the Agency were dissolved then the City would receive the regular property tax, about $150,000. Mr. Caviola claimed that in any debt situation there is always an end user that will assume the debt • because the cash flow will always pay for the debt, this whole thing deprives the County of the incremental tax, that is why the County of Los Angeles is getting ready to sue the City of Los Angeles because the cities can not keep depriving the counties of this money, at present Long Beach can not pay its minimum debt, in the case of Seal Beach it is paying $750,000 out of $1 million, that is a misuse. The people who come into town are taking the cities, Mr. Johnson as an example owned Seal Beach Affordable Housing fifteen months before Mr. Hall closed escrow. By the numbers stated this community would receive more money if they would assume the debt based upon the cash flow, this would not require lawyers or consultants, and he personally intends to go to the County and talk to the Tax Assessor, it is common for people to assume debt, this City will net more money without the Agency. Agencymember Larson countered that the a previously stated that the City spends so much money on consultants why not hire a firm to find out if this is a good idea or not, now the argument is that the City should not spend the money, it is not understood. Mr. Caviola stated that he agreed with Agencymember Larson, said he is learning as he goes, he was pushed into this because the proposal was to put the low /moderate income housing next to his home, during the last month he took his personal time to get more educated so he is willing to change, he is witnessing what is going on, from the budget it is clear that the money is going out the door to lawyers. An unnamed member of the audience noted the $750,000 annual debt, and if the Agency is dissolved, is it Page Ten - Redevelopment Agency Minutes - May 28, 2002 known how much the Agency assets will bring, would those resources then cure the debt. The response of Chairman Campbell was that the assets are not going to be sold. Ms. Reva Olson, Seal Beach, stated that the problem with the Redevelopment Agency is that the monies do not go into the City revenues, it is a slush fund for developers, the Agency continues to go into debt, it owes $9 million, the Agency and City are making the decisions as to how to spend the tax increment, it is not with a vote of the people, it also diverts money from schools, roads, and services. Ms. Joyce Parque, Seal Beach, noted the continued reference to the pump station keeping Old Town from flooding, yet her recollection was that the last flood was of the Bridgeport homes not Old Town, the flood of 1983 however flooded the areas of 14th to 17th Street, the pump station by the Trailer Park has nothing to do with keeping Old Town dry. Her feeling is that the talk about the libraries is dividing the City, the beachfront properties likely funds the majority of the City employees, the utility tax is about $4 million, the property taxes are only about $3 million. Ms. Sue Corbin, Seal Beach, said Old Town does not need a cure, it is not blighted, and continued with comments relating to recurring debt. Ms. Corbin said she • took this issue to a constitutional researcher /scholar and that person took a cursary look at the issue, commerce is the overriding reason for the Constitution, redevelopment violates that even though it has not been tested, whenever the flow of commerce is stopped it is a violation of the Constitution, that is what redevelopment does. She said people have a right to petition their government, they have been prevented from gaining documents for years, this City government has not been properly managed, the City needs proper representation and protection. Chairman Campbell requested that the speakers address the issues under consideration. Ms. Karen Tarascio, Trailer Park, said if the payment for the Trailer Park was overpaid by $2 million, if that money could be•recovered the low- income residents of the Park would not need subsidies. Agencymember Antos noted that the Agency owns the ballfield at Zoeter Place, he was uncertain whether it is the Agency or the City that owns the commercial parcel, and one of the items mentioned in the letter from the firm that did not submit a proposal was the selling of Agency assets, if however it is the Agency rather than the City that owns the commercial then that should be determined before retaining a consultant, evaluate what it might be worth, also determine whether any of the bonds that have been sold in the past have prepayment penalties, in some instances they may not, if those questions were answered then the Agency would be in a better position to determine whether to retain a consultant, that would provide information to balance out the Agency's books, and if a request is going to be proposed to the County as to their interest, if the Agency could sell something that is not a park or a library as an example, that could be used to pay down the bonds without a prepayment penalty, that could possibly put the Agency in a different position in talking with the County, suggesting that possibly this could be held over until the Page Eleven - Redevelopment Agency Miniutes - May 28, 2002 next Agency meeting. The Executive Director confirmed that it is the Agency that owns Zoeter field, there are notes in the audit that reflects the Zoeter debt, there is typically a prepayment penalty on all bonds, there is a leasehold on Zoeter by Rodi properties that comes due about 2004, the property is split between commercial and the two daycare centers, one of the things that the consultant would be requested to look at is Agency assets as well as the issues raised by the public and Council. Agencymember Yost asked if the consultants would possibly consider looking into whether the County would be willing to assume the Agency obligations as part of the RFP. An indication of the consultants from the audience was that that could likely be done. Chairman Campbell expressed her opinion that much of this the City could do in -house therefore save the proposed expenditure, which in turn could be used to assist residents. With regard to Zoeter she noted that at the time that Seal Beach joined the Los Alamitos School District the residents of the Hill and Old Town pushed for the City to acquire that entire property in that the Los Alamitos School District was going to sell the site, the City did purchase it, it will be of interest to see if the feelings remain the same. Mr. Caviola made the statement that his thought was to not get rid of any property. He proceeded with his explanation that the Redevelopment Agency incremental tax goes to the Agency, not the City General Fund, and if it is given to the County it will be in perpetuity, to that he would suggest going directly to the tax assessor and explain the Agency wants to keep its property, have the County assume the Agency debt whatever it may be, and show the cash flow in perpetuity that the County will receive, the debt will be paid in about ten years, then the County will be collecting the increment forever. Mr. Caviola said redevelopment agencies are not a favorite subject with the • County, Seal Beach could be could be a pioneer in such a transfer if the County can be shown that they will receive the cashflow forever, this has nothing to do with giving up property. Councilman Yost pointed out that at present only $.13 on the dollar of sales tax comes back to this community, with the State budget coming up things may not look well for the counties as well, the State could look at attacking their property tax too, the County gets a much larger share than does the City, and it is obvious that there is a positive cashflow although is subject to the whims of State law as well, however he would be willing to look at the concept. Mr. Caviola stated again that the incremental tax goes to the Agency, if the Agency is disbanded then the money that comes to the City will go to the General Fund, there will no longer be the obligation of the twenty percent setaside and the City will net more money long term, members of the Council merely need to go to the assessor, not staff as that is a'conflict, the City should go back to natural progression. Ms. Sue Corbin spoke to the Zoeter Place frontage lease, said the lessor will have the ability to buy the frontage in 2004 for very little money, this agreement never should have been signed. Agencymember Larson said he did not know if any of the Page Twelve - Redevelopment Agency Minutes - May 28, 2002 speakers are knowledgable of the law, he dislikes spending money for things that could be used for something else, yet these people will not believe the Agency if on its own brings forth an answer to this situation, the only way this can be done is to have independent experts prepare answers to these questions, if the response were to be that there is no way to disband the Agency then the people would be as unhappy as they are at this meeting so he could not see that delaying this issue for a couple of weeks or even months is going to make any difference, the people do not believe the Agency or the staff so let the experts advise as to what can and can not be done. Agencymember Larson said the next issue that he would raise is that if the people do not have title to the Trailer Park, and if someone else owned it, sold it, the Agency helped the • residents buy it by putting in $1 million, it did not work out, therefore he would speak for selling the property, getting the $1 million back, and if the Park residents want to buy it that would be fine, why should the Agency put up $1 million, treat it like a public debt when it is not. Larson moved, second by Yost, to select the consulting firm of Keyser Marston Associates, Inc., authorize the Executive • Director to negotiate and execute the contract in accordance with the proposal of the selected consultant, and adopt Resolution Number 02 -2 entitled "A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF SEAL BEACH AUTHORIZING BUDGET AMENDMENT NUMBER 28 FOR THE 2001/2002 FISCAL YEAR." By unanimous consent, full reading of Resolution Number 02 -2 was waived. AYES: Antos, Doane, Larson, Yost NOES: Campbell Motion carried SEAL BEACH TRAILER PARK - RESPONSE TO ISSUES RAISED The Director of Development Services stated the staff report has tried to respond to various issues raised at previous Agency and City Council meetings, also offered to respond to questions from the Agency. The Director noted the one issue heard during public comments was who owns the Trailer Park, to that it is clear that the Trailer Park was acquired by LINC Housing, the terms of the agreements are that once the bonds are paid then the property reverts to ownership by the residents of the Park, yet until the bonds are paid it is LINC that owns the Park, and pointed out that certain language that was quoted from the AB 1290 Plan was somewhat different and incorrect. With regard to the question as to where the twenty houses have gone, Chairman Campbell explained that initially there were one hundred • twenty -five units in the Park, one hundred twenty were low to moderate housing, five were not, under the new bonding the requirement was for eighty percent to be low to moderate income housing, that is one hundred units, the units did not go away merely reclassified, that was twenty units. With regard to her understanding of the way the ownership of the Trailer Park is structured, LINC Housing bought the property and put it into one of their 501C -3 corporations, that was necessary because of the tax exempt status of the bonds, the issue was for municipal bonds, Status Report re: Dissolution of Redevelopment Agency Redevelopment Agency Staff Report Februmy 28, 2005 ATTACHMENT 10 REDEVELOPMENT AGENCY MINUTES - APRIL 22, 2002 Dissolution of Agency, Phase 11.RDA Staff Report 2 23 4 -22 -02 Seal Beach, California April 22, 2002 The Redevelopment Agency of the City of Seal Beach met in regular session at 6:45 p.m. with Chairman Yost calling the meeting to order. ROLL CALL Present: Chairman Yost Agencymembers Boyd, Campbell, Larson Absent: Agencymember Doane It was the consensus of the Agency to excuse the absence of Agencymember Doane from this meeting. Also present: Mr. Bahorski, Executive Director Mr. Barrow, City Attorney • Mr. Whittenberg, Director of Development Services Ms. Yeo, City Clerk Chairman Yost advised those present that they would be allowed to speak at the time the items on the agenda were considered, staff will make a presentation, those present may respond to the reports from staff, thereafter staff will have the opportunity to respond to questions raised by the public, and for those wishing to speak to items not listed on the agenda they may do so at the Public Comment period. APPROVAL OF AGENDA Boyd moved, second by Campbell, to approve the order of the agenda as presented. AYES: Boyd, Campbell, Larson, Yost NOES: None ABSENT: Doane Motion carried Chairman Yost announced that the Agency would recess at approximately 7:00 p.m. to convene the City Council meeting and receive a presentation by Supervisor Silva. PUBLIC COMMENTS Chairman Yost declared Public Comments to be open. Ms. Lita Donnelly stated on April 8th she received a letter from the City which she thought was a thank you note for her services directing traffic at the recent 10K, 5K, 1K Run, instead it was a bill for $732.56 which stated she had not paid the correct refuse bill, there are likely about sixty people who received similar bills, she called the refuse company in an attempt to find out the reason for the bill, she then went to the Police Department and Recreation Department requesting to work off the bill to which the answer was no. Ms. Donnelly said when the City needed help due to their tight budget she volunteered yet when she went to the City to ask for help for a mistake that the City made in the amount of $732.56 the 4 -22 -02 request was denied. In June of 2001 she received a notice advising that the refuse would be increased, of which she has a copy, she pays her bills on time but was told she now owes this amount, her request is that that be canceled. Chairman Yost suggested that the issue, with documentation, be provided the City Clerk for the City Manager, with a copy to • her Council representative or the Mayor as well. Mr. Jim Gibson stated that there have been problems with police enforcement in the northern area of the downtown, 1st, 2nd and 3rd Streets, the Rivers End Cafe have been hit with graffiti, there are gang type persons in the vicinity at night, break -ins and attempted break -ins of cars numerous times, they are being stripped on the street, to which he suggested some night patrols, it is felt it could be patrolled more effectively in the evenings, there has been graffiti on Main Street, windows being etched, painted, etc., this is new and not nice. Agencymember Larson requested that the City Manager report back with regard to the policing issue. Chairman Yost declared Public Comments to be closed. CITY CHARTER AMENDMENT - RENT CONTROL Agencymember Boyd made reference to the recent discussions • relating to affordable housing and rent control, the opinion of some members of the public is that the City should not be involved in free enterprise that involves private property. This is an Agency item that would direct staff to bring to the Council consideration of a Charter Amendment as a pro property rights initiative that would prohibit any Council in the future from establishing any unilateral citywide rent control, that could be accomplished by the voters enacting a measure to amend the Charter, which can only be amended by the entire electorate, that means that rent control would be taken out of the hands of a City Council and placed in the hands of the voters. Agencymember Boyd provided a sample of such measure language recently passed in the City of Huntington Beach, and read an excerpt of the justification that the result of social experimentation of rent control in Southern California produces the following conclusion...rent control does not provide more or better affordable housing for anyone, especially the elderly or young families, those who need it most, the imposition of rent control forces some property owners to change the use of their property and to change the use can often result in more development and pressures which cause the destruction of neighborhoods.' Councilman Boyd moved that the Agency direct staff to bring back Charter Amendment language for Council consideration to be placed on the November ballot. Chairman Yost seconded the motion. AYES: Boyd, Campbell, Larson, Yost NOES: None ABSENT: Doane Motion carried STATUS REPORT - RENOVATION /RENTAL ASSISTANCE - 1119 OCEAN AVENUE he Director of Development Services noted that this issue was brought to the Agency at its March 25th meeting to consider a proposal received from a firm proposing to acquire 4 -22 -02 the property at 1119 Ocean Avenue through a probate sale, the firm made an inquiry to the Agency that if they were successful in that effort would the Agency be interested in providing up to $150,000 of rehabilitation funds to assist in rehabilitating the premises and up to $250,000 for long term rental assistance to provide two units within the development for moderate income persons or families and one unit for low income persons or families, this being a four unit building, the remaining unit would have no restrictions. The Director reported that the Agency gave direction to proceed with that effort, there were resolutions approved by both the Agency and Council finding that the use of Agency funds outside the project area were a benefit to the project area, a number of citizens expressed concerns with that program at the April 8th meeting, to that the Council requested a staff report for this meeting. The Director noted that since then the probate sale has occurred, the purchaser of the property is not the firm that made the proposal to the City therefore at this point in time the City has no proposal from anyone for any type of rental assistance or rehabilitation program within the community. The Director said however that based upon the concerns expressed on April 8th staff prepared an agenda report relating to those concerns and sets forth some thoughts of staff. To the public comment that 'low cost housing should not be provided in the most expensive area of the City, the residents of Old Town do not deserve this type of program,' staff responded that the provision for low- and moderate - income housing should be provided in those areas where low - and moderate- income persons and families reside currently, and where the appropriate type of housing exists, this type of program is seen as one that would assist existing residents of the community, not a program trying to attract residents into the community. He said based upon 2000 census information it was not possible at this point in time to provide the numbers of low, moderate, and above moderate income persons or families that reside in the City, income statistics from the 2000 census will likely not be available until about mid -2003, however staff has tried to provide information based on projections and estimates from the 1990• census up to the current time, there are some 1998 estimates compiled by the Southern California Association of Governments as part of their Regional Growth Program for the Los Angeles, Orange, San Bernardino, Riverside counties, fifty percent of median income is considered very low, their estimates show that thirty and a half percent of all households in Seal Beach, about four thousand households, are within that income range, it is likely that a majority of those reside in Leisure World, in the low category, which is fifty -one to eighty percent of the median income, about seventeen hundred households or twelve and a half percent of • the households fall into that category, in the moderate category, of the eighty -one to one hundred twenty percent of the median income there are approximately two thousand two hundred fifty households, about seventeen percent, forty percent of the households in the City are above the moderate category, these 1998 projections show that approximately 4 -22 -02 sixty percent of all households in the City fall within the low to moderate income categories, and if those persons were renters they could potentially receive assistance through the programs that have been suggested for consideration. To the question as to what is the median income, the Director stated he did not have a median figure for 1998 however for 2002 the median income for a family of four is $75,600, that is the standard number. The Director said if one looks at all of the households in the City, and assume that all of the households in Leisure World, about sixty -five hundred, are either a low or moderate income households, there remains about one thousand four hundred eighty -two households outside of Leisure World that would fall within one of the income qualifying ranges of the low or moderate income. He mentioned a recent Orange County news article which reported, based on some State estimates, that there are four hundred forty -six households in the City that pay more than fifty percent of their gross income for rent, the .standard criteria for a renter is thirty percent of income, when there are numbers greater than fifty percent those persons are paying an inordinate amount for rent and they do not have money for food, clothing, medical necessities, etc., if some of those households could be reached with the rental assistance programs it would provide more spendable income for the renter yet still provide the landlord with the market rent for an apartment unit. With reference to 1990 census information relating to owner occupied housing versus renter occupied housing within Old Town, again not having the 2000 data, there were just over one thousand owner occupied living units, two thousand three hundred fifty -nine renter occupied units, the renter occupied units is about sixty percent, there has been some change in those numbers however not thought to be a substantial change between 1990 and 2000. It was the order of the Chair, with consensus of the Agency, to recess the meeting at 7:04 p.m. in order to call to order the City Council meeting and to accommodate a presentation of Supervisor Silva. The Agency reconvened at 7:15 p.m. with Chairman Yost calling the meeting to order. 1119 OCEAN AVENUE - RENOVATION /RENTAL ASSISTANCE - continued The Development Services Director offered that the other information staff was able to derive regarding income levels, in particular the Old Town'area, is the result of the Center for Demographic Research at Cal State Fullerton, they have a contract with the County of Orange to do housing and employment type of projections, they work with cities in that effort also, staff was able to obtain some 1997 information from them, again based on estimates from the 1990 income figures for Old Town directly, which is one census tract that exists between Pacific Coast Highway and the ocean, it does not include Surfside as it is a different census tract, their projections based on the income levels in 1997 as compared to the low and moderate income ceilings at that time as prepared by the State, within Old Town there was one thousand one hundred seven residential occupants of structures, thirty - three percent of all Old Town residential units, who would qualify as lower income, that is the fifty percent and lower 4 -22 -02 level, moderate income in 1997 was estimated to be nine hundred thirty -six households, twenty -eight percent of all Old Town households, and above moderate income was estimated to be thirty -nine percent, in comparison to the 1998 numbers from SCAG it was forty percent above moderate and sixty percent below, therefore the numbers are fairly consistent based upon available information at this time. He noted that , if the same general trends are still appropriate in 2000 it would be staffs estimate of the thirty -three hundred households in Old Town that about two thousand are either low or moderate income, those are felt to be existing residents within the City that made a commitment to live in this community, and it is the opinion that those people deserve to be provided assistance if they qualify under the criteria that is set forth within the various programs and the Agency has funds that could be used to assist those people in reducing their demands on their total income for rental purposes, it continues to be felt that the program is one that could be viable for the community. The Director noted that a second concern heard was that the project that was before the Agency and Council was public housing. The Director stated that is incorrect, public housing is housing that is owned and managed by a public entity whether it be a Redevelopment Agency, Housing Authority, Non - Profit Housing Corporation, the Agency has not imposed any mandate on any property to participate in any type of housing assistance program, and it can not do that, any participation between the Agency and an owner of a property would be at the desire of the property owner to come to the Agency and make a proposal, the Agency can not force participation in any program that would be made available within the community. A third concern was that the project would be mandating rent control, and pointed out that the Agency has just taken an action that would deal with that concern. The Director stated that the assertion of rent control is incorrect, explaining that rent control is a formally adopted program by a city that puts an artificial cap on the rents that a landlord can charge to rent his units, Santa Monica and West Hollywood are examples of areas that have had rent control for a number of years, this.City has never envisioned such a program, it has never been discussed in his years with the City. What has been proposed is a rental assistance program that allows rental units to be rented at a fair market rent, which is what a willing renter would pay to a willing landlord, rates are determined on a yearly basis so rent fluctuates as the demand for rental housing fluctuates up or down. The second component of the program is that the rental assistance is an amount that would be paid directly to the landlord by the Agency to make up the gap of what the fair market rent of the unit is as opposed to what the occupant should be paying if it is assumed they are going to pay only thirty percent of their gross income per month for rent, an example would be if a unit rented for $1,500 per month, the income of the person or family in that unit would only allow them to pay $1,300, thirty percent, then the Agency would fund the $200 per month gap directly to the landlord, therefore the landlord still receives the full 4 -22 -02 market rent. Another comment was the Redevelopment funds cannot be utilized outside the project area. The Director advised that there are specific provisions of redevelopment law that mandate that if the Agency wants to spend its low and moderate income housing funds outside the project area both the Agency and Council have to make findings that it is in accordance with and a benefit to the Redevelopment Plan to spend the funds outside the project area, at the March 25th meetings both the Agency and Council made those determinations for the 1119 Ocean Avenue project, and now it must be kept in mind that there is no longer a proposal for that particular property. As a point of information he mentioned that the Agency has undertaken other projects outside the project area, acquisition of land and development of the City Yard and Police Station facilities, the Zoeter Place land leases and conversion of Zoeter Field as examples. Concern was expressed that there was no notification of the proposed projects, specifically 1119 Ocean Avenue, explaining that under redevelopment law there is no noticing requirement, City requirements are State law, however if the Council has concern with this issue a policy statement could be prepared as to what type of notification would be desired for adjoining residents if the City were to consider future rehab /rental assistance projects in the future. There was a concern also that the program would extend the life of existing non - conforming multi - family residential properties over and above what would happen if the assistance - was not provided. It seems to be clear that that would occur, particularly with rehabilitation assistance to improve and upgrade a structure. In current Code there are several sections that allow existing legal non - conforming multiple family residential properties to do rehabilitation work and in some cases to expand the living units within the non- conforming structure, Section 28 -2407 of the Code sets forth a number of types of improvements and expansions to non- conforming properties that occur either at an administrative review process at the department level, a minor plan review, or conditional use permit hearing at the Planning Commission, the plan review process requires notice to all property owners and occupants within one hundred feet of the property and the CUP requires notice within three hundred feet, the major thrust of those provisions was to establish guidelines for maintenance and improvements, and under certain conditions the expansion of existing multiple family housing inventory within the City, those provisions were determined appropriate to encourage the retention of existing multi- family inventory to provide a diverse base of available housing opportunities, that was adopted around 1991/1992. An additional concern was that the proposal would require the City to allow the same structure to be rebuilt because of the agreements that would be in place if the building were damaged or destroyed. The response was that under existing Code, 28 -2406, rebuilding of damaged non - conforming buildings, allows for the complete rebuilding of an existing 4 -22 -02 non - conforming structure to its current condition if the damage is less than fifty percent, to his knowledge this has been utilized on a couple of occasions where there has been damage due to fire, etc., and if the structure is damaged more than fifty percent there are also Code provisions that either allow a minor plan review or conditional use permit approval to allow the structure to be built in its exact same , condition or in a condition that would allow the same number of units but may require additional parking on the property depending on the ratio of parking to the number of housing units. To the issue of expansions and rebuilding the Code already allows that type of work to occur whether or not the Agency proceeds with this program or not. Another comment was that the Agency debts should be paid and the Agency abolished, in response the Director offered that staff could not obtain all answers to that issue within the two week period of time, it is complicated given the commitment to bond issues over the years, there are also housing . commitments that exist, to this issue staff would need more time to provide additional information if the Agency so directs. Also this issue, Agencymember Boyd mentioned that there have been comments in the community that the City could take private property by eminent domain, to that the Agency or Council could amend the by -laws to remove that provision as an option of the Agency. Chairman Yost noted that that has been looked at, in fact the Code specifies that eminent domain can not be done if it was residentially zoned prior to 1969 and used as such. The City Attorney advised that there are ways to amend the plans and to change the ordinance, under the current state of the law it is difficult to amend Redevelopment Plans, a lengthy process that could take up to a year. He noted that at the present time no residential property within the project areas could be condemned, the exercise of eminent domain is not permitted, those areas are Bridgeport, Oakwood Apartments, the Trailer Park, and Riverbeach Condos. The Director noted another comment was to pay the low /moderate set aside penalty and provide no housing, to that he stated that the process is not that simple, State law does not allow an Agency to merely pay the penalty and relieve the Agency of its responsibilities, the penalty is actually a payment from non - housing setaside funds into the housing setaside fund to do more housing assistance, if the program gets to a penalty situation it actually increases the amount of funds that needs to be expended. He offered that additional information could be provided at the direction of the Agency. Another comment was that the project would impact adjoining properties, believed to be directly related to 1119 Ocean however a concern that would be appropriate should any other projects come to the Agency. The feeling of staff is that no adverse impact can be seen in doing a project if the owner of the property is intending to keep his building as an apartment building and if the Agency provides money for its rehabilitation where it may not have been rehabilitated otherwise, and if the tenants within the project are ones that would qualify for assistance, therefore the tenants would be those that currently reside there. The 4 -22 -02 Director mentioned that the City did receive one e-mail message from an individual expressing an interest in participating in this type of program, this was a current resident having an income of $21,000 per year, a single mother and a child, requesting help. It is believed there are people who would take advantage of the program if the Agency were to proceed with that activity. The Director showed the current income limits in Orange County for low, very low, and moderate income persons and families by the number of persons who reside in a particular household, an example, a four person household, that household can makeup to $90,700 per year and be considered a moderate income family, for a two person family it is $72,550, for low income in a two person household it is $43,500, a four person household is $54,400. He stated again that the City as yet does not have the 2002 census income information however when these types of family income levels are seen that would qualify for low and moderate income, it is felt that the large majority of persons who currently reside in rental apartment units in the City do qualify under the income criteria at this time, it is believed that the programs being proposed recognize that fact and tries to provide a program to provide those persons some assistance, if those residents are paying more than thirty percent of their gross income for rent they are eligible, if they are currently not paying more than thirty percent now then they are not eligible for assistance, the numbers show that there are at least four hundred forty -six families that are paying more than fifty percent of their income for rent, it is felt, one could immediately determine that those persons could use some assistance. To a question from the Agency, the Director confirmed that the property subject to discussion is no longer available, the firm that made the proposal to the Agency for rehabilitation /rental assistance was not the purchaser of the property, and there has been no contact by the purchaser. Chairman Yost mentioned that at this point the consideration lies with the direction to staff, is this or something similar to this type of program what the Agency wants to do in the future. Mr. Jim Caviola, 1117 Ocean Avenue, stated that the person who purchased the 1119 Ocean property was at his home the prior day, felt the Agency proposal was ludicrous, he paid $800,000 for the property, is-from San Marino. Mr. Caviola made reference to the recent Orange County news article as well, said he took excerpts from the article, noted that Mr. Dunn, Santa Ana, is sponsoring a bill to make it a penalty to not comply with affordable housing. He said at present there are no penalties for cities who do not comply, it is because there is a Redevelopment Agency is the reason that there is a penalty, his position is to disband the Agency, pay the penalty, borrow the money to pay the debt. From the news article there are 1999 statistics from the Southern California Association of Governments and from the listing of all affordable housing statistics it says that Seal Beach has 4 -22 -02 fifteen residents who live in overcrowded conditions, one hundred forty -six people pay more than fifty percent of income in rent, and the City is short 1.9 percent, in calculating he used a thirty thousand figure even though the population is twenty -six thousand, that would be six hundred people according to State statistics, again, there is no penalty for not having low income housing unless there is a , Redevelopment Agency. With regard to the Trailer Park, before the purchase there was a forty year restriction on those rents, after the purchase there was a thirty year restriction, so after the purchase there was a ten year loss of affordable housing in the Park, prior to the sale all but five lots in the Park were restricted, after the purchase twenty -five lots are unrestricted, net loss is twenty lots of affordable housing. What happens in thirty years, there will be no affordable housing at all in the Trailer Park, he is not certain who owns the Park, someone should research LINC, but the owners of the Park, which it appears is not the residents, will be able to sell with no restriction on the use, conclusion, the Council approved $7.5 million for the Trailer Park, approved $400,000 for 1119 Ocean, that is $7.9 million on low income housing for six hundred people, that is $133,000 per person according to the State 1999 statistics, he wants this stopped, wants to know where the money is going, he wants no unnoticed behavior related to deed restrictions, also said you can not rebuild a building if it burns down more than fifty percent, said people are noticed for a CUP, etc. but the 1119 Ocean had none, that is outrageous. Mr. Gene Stegman, 13th Street, stated that he is a fourth generation resident, his great grandparents bought here when it was Bay City, and has a son who is a fifth generation Seal Beach person. He asked why the Council is trying to undo one of the great beach towns on the planet, every time one turns around there is something going on, Trailer Park, money, things people do not know, this is a small town and should be treated like a small town, Old Town is Seal Beach, it provides a great amount of sales tax, property tax, use taxes, the Council works for the people, • serves at the pleasure of the people. He would like to see Old Town from Seal Beach and become its own city, the Council would not have a job because they would not be needed. Mr. Dan Smith, Trailer Park, believed to be a designated area for low to moderate income housing, his comments relate to a better utilization of the funds being discussed. Mr. Smith mentioned having heard the proposal to spend $400,000 for three low to moderate income housing units, that amount in an area that is already designated for low to moderate housing would buy eight two to three bedroom mobile homes, eight units available for families, the units being discussed are one bedroom which are studios. Ms. Cynthia Metzger, Main Street business person, stated she appreciates the conciliatory nature of the Council, it is good to see that with reexamination there will be an attempt to deal with the issue, as an owner of income property in Long Beach for many years she knows that when people received subsidized housing it went with them and not the property, it is true it is not a form of rent control but it is a form of property destruction because everyone who has a Section 8 4 -22 -02 tenant has property destroyed, that is believed to be without exception. The way this is being approached now it does give the property owner the option of having a contract and redevelopment for their property and when the contract expires they would have their choice then as to what to do with their property. It may not be a good idea to keep the Agency yet she did not know that issue well. Ms. Metzger stated she does feel that the City fails a great deal, because of being the small city it is, to communicate to the people and they do exercise their own will. She said she would like to see in the local paper the City Council agenda, future issues to be addressed, she feels that is not a difficult thing to request, there have been so many things where people spend hundreds of thousands of hours, dollars, and energy on things learned after the fact. With regard to the.Trailer.Park it is understood that the City has reneged on allowing the residents to purchase the Park and that persons residing there are being subsidized for their rent, she understands there are people in the Park that are afraid to speak up to ask the Council to adhere to the promises made, that issue should be addressed and keep the commitments made to the Trailer Park, let the residents purchase it, do the improvements, and make the best of that situation. Chairman Yost noted that the Council agendas are on the City website, posted at City Hall and in the libraries. Mr. Bill Ayres, Seal Beach, asked if the population of Leisure World is part of the equation of the total population of Seal Beach, are they eligible to participate in low income housing. Chairman Yost clarified the question, is Leisure World counted as part of the low to moderate income housing, if not, why. The Director said the questions may be two separate issues, there is provision in the City's Housing Element for goals for construction of new low to moderate income housing to accommodate future demand for people moving into the City of Seal Beach, the Housing Element criteria does not count existing populations and housing units, it is a forward looking plan looking only at anticipated new development to which you then need to plan for a certain percentage of the new development as low /moderate housing, so in that regard Leisure World does not qualify for anything. With regard to any type of rental subsidy program or rehabilitation loan programs for owners of residential units or tenants of residential units Leisure World could be qualified to participate in those programs depending upon the criteria that the Agency ultimately approves for those loan or grant programs that will come before the Agency at some future time. Mr. Ayres said his point is that if they are considered in the total equation for population, according to the news article that should be 1.9 percent of the people for this type of housing, if Leisure World could be taken out the remainder of the City likely would already meet the criteria, if there were a census of the Old Town area, including bootlegged units, the City might be close to complying. With regard to rental assistance, and at some point everyone present would likely have qualified, it takes the owners of apartments out of the free enterprise system because they do not have to keep their units up as much because of the subsidy, he too owns rental units and he spends considerable 4 -22 -02 money to keep the property up in order to obtain a good rent, it is somewhat an issue of competition. Mr. Paul Jeffers, Trailer Park, Vice President of the Seal Beach Owners Association, said the Board asked that he speak to the now twenty from five spaces under the new regulatory agreement, the Board is in favor of the twenty spaces as they like the low to moderate income housing in the Park. Ms. Sue Corbin, , Seal Beach, spoke to development agreements and low income housing requirements, then money transferred instead of housing, to that she asked what happened to the money, all of this needs to be put together to let people make a decision as to what is going on, the Council does not know where things stand. On the Hellman property apparently it is back to fifty acres rather than one hundred and fifty acres, not contiguous, the low income housing is not being done and that was the basis for the lawsuit to begin with, what happens to that money, low income housing belongs on the Hellman property. Mr. Loren Washer stated he recently bought a property one block east of 1119 Ocean, they paid a fair price, in the process of improving the property, they need their renters to be in, this is a unique community, the 1119 issue is something that should not come up, it should not have even been discussed, it should be sold as a property, the rents should be kept up, no one is going to help him with his rents, he expects his renters to be able to afford the rent otherwise they will not take care of the property and he will have more repair. Mr. Chi Kredell, Seal Way, asked where these types of proposals come from, the apartments at 1119 are believed to be one bedroom, mention was made of a person paying $1,300 per month rent, a third of the persons paycheck, that is some $40,000 per year bracket, will that person be alone in the one bedroom apartment, unlikely, there will be three persons in the one bedroom unit, this area does not deserve that. Old Town seems to be the playground area for four districts, anything they can not have or do not want in their districts comes to Old Town, this is the most expensive area of Seal Beach, 1119 sold for about $800,000 for a twenty -five to thirty foot lot, where does one get low cost housing on that expensive property. Mr. Kredell expressed appreciation to the City for doing a great job on the beach this year, the best it has ever been done. He also asked what happened to all of the trees that were to be put in with the Bixby development. He asked if this is a City proposal or is it the requirement of the federal government. Chairman Yost responded there are two issues, one is the Redevelopment Agency under which there is a requirement for low to moderate income funds, the other is the City's Housing Element requirement under State and federal law, the last time the City was out of compliance with that it could not issue building permits for anything, again, these are two separate issues, the discussion is with regard to the issues and what to do to fit within the guidelines. With regard to the Charter Amendment suggestion, the Chairman stated that will come back to the Council as it has the authority to recommend a Charter Amendment restriction to not have rent control, to the suggestion that it be worded so that there can never be rent control, the Chairman suggested that the forthcoming report could be reviewed with staff when it comes 4 -22 -02 back to the Council. Mr. Kredell said he has always felt that City staff works against the residents of this community. He noted again that this is the most expensive area of the town, in 1970 it was rezoned for single family dwellings rather than multi - family, there had been a Code enforcement officer until another Council took the officer out of this district and there were more than three hundred Code violations in just a short time, and now even though duplexes are not allowed things are being built upwards such as the doghouses. Agencymember Boyd mentioned that staff will have a proposed Charter Amendment relating to rent control on the next agenda. Ms. Geri West, stated that she and her husband live on Electric Avenue, they qualify under the moderate income category, they could rent a unit and the Agency could then subsidize them $400 per month. Mr. Reva Olson, Seal Beach, stated she wants to abolish the Redevelopment Agency, can not understand why this City is on such a tight budget that it has to have the highest utility users tax in the nation while the Agency has so much money it can subsidize developers and investors for millions, $150,000 for 1119 Ocean for an exterior paint job. Ms. Becky Jancs, Spinnaker Way, said her comments were to rental assistance, while it may be true that the renters living in Seal Beach are probably higher low income people, if the rental assistance is enacted as proposed, then as these properties turn over there will be more people of lesser income coming into the community, lowering the caliber of people in Seal Beach and the quality of the town as a whole. Ms. Sylvana Leon mentioned that she purchased a home is Seal Beach about two years ago, a relatively low crime and gang free area, she works in jails for juvenile delinquents, what she has found is that when these youth live in subsidized housing they trash the facility because they have no respect for property, she would not want to see gangs and taggers in Seal Beach. Mr. Jim Caviola said he likes living here, bottom line is that the State wants this and that, City employees want things, he wants a volunteer fire department, in the fall there will be another party, the funds will be used to buy trees and to buy a fire truck, which he heard the Authority will not let them do, but that is a fire and safety issue, that is not socialization, there are people who want to give back to the community, doing away with the volunteer firefighters is dismantling the moral fabric about which people live. He recalled the bed and breakfast issue, his address was identified as a possible bed and breakfast yet it is not an antique house, now the rental assistance is being considered next to his house, therefore it is a personal thing with him, he understands history and culture, people do ' not want deed restrictions on property in their neighborhood and there is a due process right to notice. The Development Services Director explained that when staff brings an issue to the Council or the Agency it is because they are responding to something mandated by another agency in this regard, the Agency has certain requirements mandated by Redevelopment law, a certain amount of funds that the Agency obtains on a yearly basis to assist low and moderate income housing within the community. He noted that this 4 -22 -02 issue did not come up in the City until about 1999 because prior to that time the Agency had pre- existing debts that had to be paid first so there were no monies going to the housing setaside fund, said he understands the emotions and concerns of the community, it is thought that programs can be proposed that the Agency can deal with that may not involve rehabilitation and rental assistance within this particular area of the community, staff can come back to the Agency at some future date with alternatives to those programs. He said several comments asked that the project at 1119 Ocean Avenue not be done, there is no project at 1119, there was never any imposition of a project at 1119 Ocean by the City, that project came to the City from a potential purchaser of the property, if that person had not come to the City there never would have been any discussion of the issue, the City is not trying to mandate programs and force something to occur on a persons property. Agencymember Campbell emphasized her preference that the format of meetings were such that questions could be answered when asked rather than waiting until all comments are made, . this is because the Council is not allowed to take part in a dialog. She offered that it is the option of a property owner as to whether or not they want to apply for rental assistance for their units, no one says that owner has to take Section 8, a deed restriction is only if an owner wants one, low income residents currently exist in the City, could be one's neighbor and it is possible that they could apply for assistance. Agencymember Campbell noted questions raised regarding the Trailer Park and who owns it, it was Linc Housing that bought the Park, the City issued bonds, the residents are paying off the bonds, when the bonds are paid the residents will own the Park, at that time the residents /owners will need to decide what they want to do with the Park, that is in writing, and a meeting will be held the following week with Linc at City Hall. To a question relating to what happened to the trees in her area as a result of the Bixby project, said she too would like to know, and offered that it would be nice if when votes are taken on significant projects that there be more cooperation between districts. Agencymember Larson said he would assume that should any other proposition come before the Council involving a parcel of property such as was under consideration that there will be some means in place to let the residents know what is going to be considered, there seems to be a feeling that the people and the Council are on opposite sides, his desire is that everyone be notified whether they like a particular proposal or not, nonetheless that would be in keeping with the rights under the Constitution. Agencymember Boyd noted that the 1119 Ocean property is now a mute point, in that regard staff requested direction to either discontinue the negotiation process, continue the negotiation process, or investigate alternative site locations. To that he pointed out that there is an affordable housing need by mandate, the people in the downtown area are saying they understand that there is a mandate however are asking that the City not concentrate the effort to meet the affordable housing need in any one 4 -22 -02 particular area of the City. Agencymember Boyd mentioned that an upcoming item on the agenda is adoption of an AB 1290 Implementation Plan, mandated by law, which is how the City is going to implement goals and encumber funds to promote affordable housing over the next five years, by law one hundred fifty -eight new units need to be built, the question is where does one do that, concentrate it in Old Town to rehab existing units, the answer is obviously not, with the limited amount of land does the City zone it for multi - family apartment use that would be restricted to low income, that is a strong potential, there is Boeing, Bixby, Old Ranch Tennis Club, there is land in this City that is going to have to be looked at to meet these needs. He suggested that the public not jump on just one particular issue, the Council does hear that the people want their property rights protected, that is why.a proposed Charter amendment will be on the next Council agenda for consideration. Chairman Yost agreed that there needs to be more notice to the public, although it complies with the law that is not enough, it is obvious that people were not noticed properly, he would request staff to return to Council with some means of doing that whether it be within five hundred feet or whatever. His belief is that what bothers most people is the issue of deed restrictions for low to moderate income housing for some number of years, he does not favor that, feels there are other ways to spend low to moderate income funds. Chairman Yost stated that the Housing Element is the first issue, there is a requirement that the City provide so many new low to moderate income units, to that a statement was made that the City should do nothing then there would not be a penalty, Chairman Yost countered however that that statement is not true, citing the fact that the last time that the City was not in compliance no building permits could be issued, and there is currently pending legislation to fine cities upwards of $500,000 if they do not comply, that is not law as yet however there are requirements that the City must abide by. The second issue is the Redevelopment Agency and how that functions, that is an entity that was established many years ago, the funds that go to the Agency come from the property taxes of the properties that are within the Redevelopment zone, that is the property tax that is above the baseline value at the time those properties were placed in the Redevelopment zone, primarily the Trailer Park, Oakwood, Riverbeach Town Homes, some of the Hellman units will be in the Agency zone, mentioned that several things have been done through the Agency, the funding of the greenbelt that runs through the downtown, the rehab of Zoeter Field, Zoeter Place, the City Yard, and Police Station, all accomplished with Agency funds. The Chairman noted that at present the Agency has mostly bond debt whereby Agency monies paid for those improvements, yet as part of the Agency twenty percent of the funds that come in, approximately $1 million a year, have to be spent on low to moderate income housing, that is where the issue is, explaining that the Agency is not flush with funds, it is fairly tight and with debt, nonetheless there is the requirement to spend twenty percent on low /moderate income housing, if it is not spent by a certain date a fine is imposed, and that fine comes from the general revenues of the I 4 -22 -02 City which are the monies from which the various departments, City employees, maintenance, etc. is paid, the fine itself is sizeable, an amount in excess of $400,000 needs to be encumbered by June or a penalty will be imposed. Chairman Yost assured those present that the Agency has heard their concerns, the objection to the deed restriction with which he agrees, yet there are requirements that must be fulfilled , which will be done as best they can, his preference is that there not be negotiations, he does not support the City being in the business of rehabilitation of existing units, also, when something similar to this comes forth there should be adequate notice. Agencymember Campbell offered that the City is trying to work within the mandates on the City. Chairman Yost mentioned that there are units behind the Rossmoor Center, the Trailer Park which is the bulk of the low/ moderate income.housing, units in Leisure World, the Navy housing, and stated that the most logical solution to him is the next agenda item which is providing assistance to persons who already reside in the community with a certain amount of funds to help them get to a certain level, there are a number of people on limited incomes, this would be assistance to encumber sufficient funds so that the City does not face a penalty, that does not address the Housing Element issue, yet the most pressing issue at this point is the $400,000 of Agency funds that must be expended or be subject to a fifty percent penalty by June 30th, that is $200,000 of General Fund revenue, money that the City does not have. The Executive Director confirmed the direction of the Agency to discontinue negotiations although there are none, and bring back no other such projects. The Chairman said specifically anything having a deed restriction, and that staff report back as to how to increase the notification process. S4-). . Chairman Yost also requested staff to look into the process for dissolving the Redevelopment Agency, the positive of doing that is that the Agency no longer has funds of which twenty percent is required to be spent for low /moderate income housing, yet on the other side it does not relieve the responsibility of the Housing Element to provide low to moderate income housing in some manner, there could be _financial penalties with that as well. Agencymember Boyd- noted again the upcoming Implementation Plan, suggested that a noticing plan and guidelines for projects the Agency would like to look at should be incorporated in that Plan so that C there is a consistent policy as to how those issues are addressed in the future. There was an indication of a consensus agreement with the direction. APPROVAL OF MINUTES Boyd moved, second by Larson, to approve the minutes of the March 25th, 2002 Agency meeting. AYES: Boyd, Campbell, Larson, Yost NOES: None ABSENT: Doane Motion carried It was the order of the Chair, with consent of the Agency, to declare a recess at 8:25 p.m. the Agency reconvened at 8:38 p.m. with Chairman Yost calling the meeting to order. 4 -22 -02 • PUBLIC HEARING / RESOLUTION NUMBER 02 -2 - AB 1290 IMPLEMENTATION PLAN Chairman Yost declared the public hearing open to consider the AB 1290 Implementation Plan for 2000/2005. The City Clerk certified that notice of the public hearing had been advertised as required by law, posted, and reported no communications received. The Director of Development Services presented the staff report, explained that the AB 1290 Implementation Plan is a State mandate initially adopted in 1993 which requires the City on a five year time schedule to adopt a plan indicating how it intends to spend its Redevelopment Agency funds over the five year term of the Plan. He noted that the basic purpose of the Plan is to allow the public to understand what projects the Agency intends to utilize its Redevelopment funds for, both from the housing setaside fund.and non - housing setaside funds. The Plan before the Agency does go through the different project areas within the Riverfront Project Area, the current status of each. The Director mentioned that during the 2001/2003 fiscal year period the current capital improvement program for the City shows three projects that would be funded by the non - housing set aside funds, improvements to the Library which are primarily rehabilitation and upgrade improvements, $42,000, there is $350,000 allocated for on -going maintenance and monitoring activities for NPDES water quality compliance issues at the City Yard facility, and a capital improvement project of $2.3 million to upgrade the west end pump station facility to deal with flooding situations that Old Town experiences during storm events, those projects extend over the five year period, all of the anticipated non - housing set aside funds that would come to the Agency, for the twenty percent housing set aside funds, which the Agency receives approximately $200,000 per year, and with the current funds on hand and the eventual reimbursement to the Agency of the bridge loan for the Trailer Park acquisition project, the IMPOP loan funds, there will be approximately $2.8 million available in the housing set aside fund over that five year period of time. He directed•attention to Table 3 of the staff report which sets forth the proposal as to how the $2.8 million in housing assistance funds would be allocated to the different projects, one of the programs was that which has just been discussed, the housing rehabilitation loan and renter assistance program, which the Agency has indicated they do'not want to consider, staff would recommend that that program be eliminated which is an allocation of $925,000 and . that the funds be reallocated to the other programs. He reviewed each of the programs, the Home Improvement Loan/ Grant Program which assists current owners of homes, a program offered by the Agency since 1998, $600,000 was initially proposed, it is now recommended to increase the amount to $800,000, the next program is improvements to units within the Trailer Park to replace existing travel trailers, initially $500,000 was proposed, it is suggested that that be increased to $1 million, last is a mortgage assistance program, basically a first time home buyer program to assist moderate income people purchasing within the City, as indicated in the staff report, the only areas that could likely use that program is the various units within the