sr-072412-3f (2)10—m City Council and Successor
City o, g Y p
Santa Monied A enc Report
City Council and Successor Agency Meeting: July 24, 2012
Agenda Item: 3--P
To: Mayor and City Council
Chairperson and Successor Agency
From: Andy Agle, Director of Housing and Economic Development
Gigi Decavalles- Hughes, Director of Finance
Subject: Draft Recognized Obligation Payment Schedule and Administrative
Budgets for the period January through June 2013
Recommended Actions
Staff recommends that the City Council (Council) adopt the attached resolution
approving the housing administrative budget for the period of January through June
2013 and that Council, serving as the Santa Monica Redevelopment Successor Agency
(the Successor Agency), adopt the attached Resolutions approving the Successor
Agency's Draft Recognized Obligation Payment Schedule and administrative budget for
the period of January through June 2013.
Executive Summary
This report summarizes the obligations of the Successor Agency under AB x1 26
(AB 26) and AB 1484 to draft Recognized Obligation Payment Schedules (ROPS) and
corresponding administrative budgets to be implemented in six -month periods. This
report recommends that the Council adopt the attached resolutions approving the
affordable housing administrative budget and that the Successor Agency adopt the
attached resolutions approving the draft ROPS and the Successor Agency's
administrative budget for the period January through June 2013.
Background
As a result of AB 26, the City's Redevelopment Agency dissolved on February 1, 2012
and the City of Santa Monica became the Successor Agency designated to implement
the dissolution and management of the former Redevelopment Agency's assets and
housing functions. As part of the dissolution procedure, AB 26 requires the Successor
Agency to prepare a Recognized Obligation Payment Schedule (ROPS), which
19
identifies the former Redevelopment Agency's enforceable obligations and sources of
payment of those obligations every six months. The ROPS must be approved by the
Oversight Board. The Successor Agency's ROPS for the period of January through
June 2012 (First ROPS) and ROPS for the period of July through December 2012
(Second ROPS) were approved by the Oversight Board on April 16, 2012 and
April 23, 2013, respectively.
Under AB 26, the Successor Agency may receive an administrative cost allowance of
up to three percent of the property tax allocated to the Successor Agency, based upon
an approved administrative budget which justifies the allocation of the administrative
cost allowance. The amounts of property taxes that are allocated to the Successor
Agency are based on an approved ROPS during each six -month period. The
administrative cost allowance is included as an enforceable obligation on the ROPS.
Discussion
On June 27, 2012, as part of the FY 2012 -13 State budget package, the Legislature
passed and the Governor signed AB 1484. As a budget "trailer bill ", AB 1484 took
immediate effect upon signature by the Governor. The primary purpose of AB 1484 is
to make technical and substantive amendments to "clean up" AB 26, providing clarity
concerning issues including but not limited to the ROPS, enforceable obligations and
successor agency administrative costs.
Under 1484, the process and timing for preparation and approval of each ROPS has
changed. Specifically, the Successor Agency is required to submit to the Department of
Finance (DOF) and County Auditor - Controller (CAC) the ROPS for the period ending
June 30, 2013 (Third ROPS), approved by the Oversight Board, no later than
September 1, 2012. Previously unclear in AB 26, AB 1484 clarifies and states that
employee costs of the Housing Successor Agency (the City), legal services and project
specific employee costs of the Successor Agency, and legal services for the Oversight
Board constitute enforceable obligations of the Successor Agency (Section
4
34171(d)(1)(C)). The DOF rejected these costs in the Successor Agency's First and
Second ROPS. However, with the passage of AB 1484, these costs are included as
enforceable obligations in the Successor Agency's Third ROPS.
The administrative budgets have been prepared so that the Administrative Cost
Allowance and the housing employee costs payments authorized under the Third ROPS
will reimburse the City for costs associated with carrying out Successor Agency
responsibilities and affordable housing costs related to the former Redevelopment
Agency's housing assets, including administration, completion of projects, compliance
and financial reporting.
Next Steps
In accordance with AB 1484, staff will forward the Successor Agency approved Third
ROPS and administrative budgets to the County Auditor - Controller for review before
presenting to the Oversight Board for approval next month. Copies of the Oversight
Board approved Third ROPS will be sent to the State Controller's Office and the
Department of Finance by September 1, 2012 and posted on the Successor Agency's
website.
On January 2, 2013, the County Auditor - Controller will transfer . property taxes into the
Successor Agency's Redevelopment Obligation Retirement Fund (RORF), from which
the Successor Agency will pay enforceable obligations listed on the approved Third
ROPS.
K
Financial Impacts & Budget Actions
There are no budgetary impacts associated with the adoption of the resolutions
approving the draft Third ROPS and administrative budgets. The Third ROPS simply
sets forth the Successor Agency's existing financial obligations and administrative costs
for the period January 1, 2013 to June 30, 2013.
Prepared by: Nia Tang, Acting Administrative Services Officer
Approved:
IUD 4 G Qi
Andy AEI rector
Housing and Economic Development
Director, Finance
Attachments:
Forwarded to Council:
Rod Gould
City Manager
Attachment A: Resolution — 3`d ROPS (Jan — June 2013)
Attachment B: Resolution — Successor Agency Admin Budget (Jan — June 2013)
Attachment C: Resolution — Housing Successor Admin Budget (Jan — June 2013)
11
Reference Resolution Nos.
10698 (CCS)7 9 (SA), and
10 (SA)