SR-02-12-2013-3JID
City Council and Successor
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m.ta non.e� Agency Report
City Council and Successor Agency Meeting: February 12, 2013
Agenda Item: Via __3
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: Recognized Obligation Payment Schedule: July 2013 through
December 2013 and Administrative Budgets
Recommended Actions
Staff recommends that the City Council (Council) adopt the attached resolution
approving the housing administrative budget for the period of July 2013 through
December 2013. Additionally, staff recommends that the Council, serving as the Santa
Monica Redevelopment Successor Agency (Agency), adopt the attached Resolutions
approving the Agency's Draft Recognized Obligation Payment Schedule and
administrative budget for July 2013 through December 2013.
Executive Summary
This report summarizes the obligations of the 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 Agency adopt the attached
resolutions approving the draft ROPS and the Agency's administrative budget for
July 2013 through December 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 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 Agency to
prepare a ROPS, which identifies the former Redevelopment Agency's enforceable
obligations and sources of payment of those obligations every six months. The ROPS
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must be approved by the local Oversight Board. The Agency's first and second ROPS,
covering January 2012 through December 2012, were approved by the Oversight Board
on April 23, 2012. The third ROPS, covering January 2013 through June 2013, was
approved by the Oversight Board on August 27, 2012.
Under AB 26, the Agency may receive an administrative cost allowance of up to three
percent of the property tax allocated to the 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 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 AB 1484, the Agency is required to submit an Oversight Board - approved ROPS
to the Department of Finance (DOF) and Los Angeles County Auditor - Controller (CAC)
for the period ending December 31, 2013 (Fourth ROPS) by no fewer than 90 days
before the date of the property tax distribution, scheduled for June 1, 2013.
The administrative budgets have been prepared so that the administrative cost
allowance and the housing employee costs payments authorized under the Fourth
ROPS will reimburse the City for expenses associated with carrying out Agency
responsibilities and affordable housing expenses related to the former Redevelopment
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Agency's housing assets, including administration, completion of projects, compliance
and financial reporting.
Although the DOF has previously denied some items included in the Fourth ROPS,
AB 1484 authorizes certain City /Agency payments be made upon obtaining a Finding of
Completion from the DOF following the DOF's review of the Agency's Due Diligence
Reports for the Low and Moderate Income Housing Fund and Non - Housing Funds
(currently under appeal and review, respectively). Therefore, these items will continue
to be carried over on future ROPS until such time as the Agency obtains a Finding of
Completion and these items are reevaluated for payment.
Next Steps
In accordance with AB 1484, staff will forward the Agency- approved Fourth ROPS and
administrative budgets to the CAC for review before presenting it to the Oversight Board
for consideration. The Oversight Board has the discretion to approve or deny any
portion of the Fourth ROPS. Copies of the Fourth ROPS, as approved by the Oversight
Board, will be sent to the State Controller's Office and the Department of Finance by no
later than March 1, 2013 and posted on the Agency's website.
On June 1, 2013, the CAC will transfer property taxes into the Agency's Redevelopment
Obligation Retirement Fund from which the Agency will pay enforceable obligations
listed on the approved Fourth ROPS.
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Financial Impacts & Budget Actions
There are no budgetary impacts associated with the adoption of the resolutions
approving the draft Fourth ROPS and administrative budgets. The Fourth ROPS simply
sets forth the Successor Agency's existing financial obligations and administrative costs
for the period July 1, 2013 to December 31, 2013.
Prepared by: Elsa Trujillo, Senior Development Analyst
Approved:
le, Director
and Economic Di
Approved:
Forwarded to Council:
noRod Gould
City Manager
Attachments:
Attachment A: Resolution — 4th ROPS (July 2013- December 2013)
Attachment B: Resolution — Successor Agency Admin Budget
(July 2013- December 2013)
Attachment C: Resolution - Housing Successor Agency Admin Budget
(July 2013 - December 2013)
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Reference Resolution Nos.
11 (SA), 12 (SA), and 13
(SA)