SR 09-27-2011 3WID
tmiiiiiiiiiiill Redevelopment Agency
Sa of Report
Santa Monica'
Redevelopment Agency Meeting: September 27, 2011
Agenda Item:. t
To: Chairperson and Redevelopment Agency
From: Andy Agle, Director of Housing and Economic Development
Carol Swindell, Director of Finance
Subject: Redevelopment Agency Recognized Obligation Payment Schedule
Recommended Action
Staff recommends that the Redevelopment Agency adopt the attached Resolution
approving the Redevelopment Agency's Preliminary Draft of the Initial Recognized
Obligation Payment Schedule.
Executive Summary
This report recommends that the Redevelopment Agency, under protest and subject to
reservation, adopt the attached resolution, approving the Preliminary Draft of the Initial
Recognized Obligation Payment Schedule (ROPS), for the purpose of preserving all
rights to make payments and perform enforceable obligations associated with the
Agency's Priority Projects and Five -Year Implementation Plan.
Background
On August 9, 2011, the City Council took actions to ensure the continued existence of
the Redevelopment Agency. Specifically, Council introduced an ordinance to
participate in the Alternative Voluntary Redevelopment Program permitted under AB 27,
and authorized a Remittance Agreement between the City and the Agency to transfer
funds to the City for the City's payment of an annual remittance to the County Auditor -
Controller.
On August 11, 2011, the California Supreme Court issued a stay (Stay) in the litigation
action, California Redevelopment Association v. Matosantos (S194861), which
challenges the constitutionality of AB 26 and AB 27. While the Stay was granted on all
provisions of AB 27, it was unclear which provisions of AB 26 were denied the Stay. On
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August 17, 2011, the California Supreme Court modified the Stay to clarify, among other
items, what sections of the statute would remain in effect at this time.
The effect of the Stay is to preserve the status quo by authorizing redevelopment
agencies to perform under "existing obligations" as defined by the statute while
preventing agencies from undertaking new debt or making new commitments, among
other things, pending the Supreme Court's decision on the merits of petitioners' claims
that AB 26 and AB 27 violate the State Constitution and other laws. The Stay, as
modified on August 17, has the effect of reviving portions of the previously stayed
statutory scheme that require actions to be taken by agencies, cities and the state
during the period prior to January 15, 2012, by which time the Court intends to have
rendered its decision. These actions include the adoption (under §§ 34169 and 34169.5
of AB 26) of the Enforceable Obligations Payment Schedule (EOPS) by
August 30, 2011 and the Preliminary Draft of the Initial ROPS by September 30, 2011,
and the procedure for the Director of Finance to determine the remittance amount due
to the county auditor - controller from those agencies participating in the AB 27
"Voluntary Alternative Redevelopment Program."
On August 23, 2011, the Redevelopment Agency adopted a resolution approving the
EOPS, subject to full reservation of rights to challenge the validity of any or all of the
provisions of ABX1 26 and ABX1 27, and to preserve all rights to make payments and
perform enforceable obligations associated with the Agency's projects subject to the
Supreme Court's determinations in California Redevelopment Association v.
Matosantos. Special Counsel for the Agency and the City has opined that the Agency
should also adopt a resolution approving the Preliminary Draft of the Initial ROPS,
subject to the same reservations as those adopted with the EOPS.
Discussion
Staff has prepared the Preliminary Draft of the Initial ROPS to set forth all of the
Agency's obligations determined to be enforceable obligations under § 34167(d), as
well as the schedule of payments for the period January 1, 2012 to June 30, 2012. Staff
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recommends that the Agency adopt the attached Resolution and the accompanying
Preliminary Draft of the Initial ROPS in Exhibit 1 of the attached resolution to provide the
Agency additional protection in performing its enforceable obligations, including
enforcing existing covenants and making payments thereunder.
Financial Impacts & Budget Actions
There are no budgetary impacts associated with the adoption of the resolution and
Preliminary Draft of the Initial ROPS. The Preliminary Draft of the Initial ROPS simply
sets forth the Agency's existing financial obligations.
Prepared by: Gigi Decavalles- Hughes, Administrative Services Officer
Andy Agle, Director
Housing and Econo
Approved:
Forwarded to Council:
Rod Gould
City Manager
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Carol Swindell
Director, Finance
Attachments:
Attachment A: Resolution
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Reference Resolution No.
534 (RAS)