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sr-022812-3qSuccessor Agency Meeting: February 28, 2012 Agenda Item: 3 — sa To: Chairperson and Successor Agency From: Andy Agle, Director of Housing and Economic Development Gigi Decavalles- Hughes, Director of Finance Subject: Successor Agency Draft Recognized Obligation Payment Schedules Recommended Action Staff recommends that the Santa Monica Redevelopment Successor Agency (the Successor Agency) adopt the attached Resolutions approving the Successor Agency's draft Recognized Obligation Payment Schedules. Executive Summary This report recommends that the Successor Agency adopt the attached resolutions, approving the initial draft Recognized Obligation Payment Schedules (ROPS) for the six -month periods of February through June 2012, inclusive, and July through December 2012, inclusive, in order to pay enforceable obligations associated with the Successor Agency's Priority Projects and Five -Year Implementation Plan. Background On January 10, 2012, Council adopted Resolution No. 10647 and Resolution No. 10648 to serve as the Successor Agency to the former Redevelopment Agency. The City assumed the role as the Successor Agency on February 1, 2012. Under Assembly Bill No. 26 (2011 -2012 1St Ex. Sess.) (codified, in part, as Part 1.8 and Part 1.85 of the California Health and Safety Code) (AB 26), the Successor Agency is required to perform specific functions that are separate and independent of the duties of the City, acting as a charter city. Therefore, on February 14, 2012, to establish a separate operating framework to distinguish between the actions of the Successor Agency and the actions of the City, the Successor Agency adopted the Successor Agency Bylaws. In addition, on February 14, 2012, the Successor Agency and City authorized a 1 Reimbursement and Operating Agreement for the purpose of formalizing the Agency's use of City staff, facilities and administratively services (collective, City Services) to implement the Successor Agency's administrative duties under AB 26, as codified in Part 1.85 of the California Health and Safety Code. Under AB 26, the Successor Agency may receive an administrative cost allowance which is payable from property tax revenues of up to five percent of the property tax allocated to the Successor Agency for the 2011 -12 fiscal year and up to three percent of the property tax allocated to the Successor Agency for each year thereafter. The amount of property taxes that are allocated to the Successor Agency are based on an approved Recognized Obligation Payment Schedule (referred to herein as the ROPS). A ROPS must be prepared twice annually until all enforceable obligations are paid. Discussion Previous reports noted that staff would return to the Successor Agency to submit two draft ROPS for approval to comply with the deadlines established under AB 26. The first ROPS covers the period between February 1, 2012 and June 30, 2012 and the second ROPS covers the period between July 1, 2012 and December 31, 2012. For each recognized obligation, the ROPS identifies one or more sources of payment, as required by AB 26. In accordance with Health and Safety Code § 34170.5, staff has also established a Redevelopment Obligation Retirement Fund (RORF) to receive the remittance of property tax revenues from the County to fund certain obligations on the ROPS. By March 1, the initial draft ROPS, adopted by the Successor Agency at this meeting, will be submitted to the Los Angeles County Auditor - Controller for certification. Staff recommends that the Successor Agency adopt the attached Resolutions with ROPS exhibits to pay its obligations. Next Steps Following adoption of the ROPS, staff will forward the ROPS to the County for independent certification. Upon the County Auditor - Controller's approval of the ROPS, oil staff will submit the ROPS to the Oversight Board for approval, with a copy sent to the State Controller's Office and the Department of Finance by April 15, 2012, and a copy posted on the City's website. On May 16, 2012, and on each January 16 and June 1 thereafter, the County Auditor- Controller will transfer funds into the Successor Agency's Redevelopment Obligation Retirement Fund (RORF) to pay enforceable obligations listed on the certified ROPS. Financial Impacts & Budget Actions There are no budgetary impacts associated with the adoption of the resolutions and ROPS. The ROPS simply sets forth the Successor Agency's existing financial obligations, which are included in the FY11 -13 Revised Budget. Prepared by: Nia Tang, Acting Administrative Services Officer Approved: Andy Agle, Dire o Housing and Economic Development Gigi Decavalles -H Director, Finance Attachments: Attachment A: Resolution — 1 st ROPS Attachment B: Resolution — 2nd ROPS k? Forwarded to Council: Rod Gould City Manager Reference Resolution Nos. 1 (SAS) and 2 (SAS).