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SR 09-09-2014 3DSuccessor Agency Meeting: September 9, 2014 Agenda Item: .- To: Chairperson and Successor Agency From: Andy Agle, Director of Housing and Economic Development Gigi Decavalles- Hughes, Director of Finance Subject: Recognized Obligation Payment Schedule Recommended Actions Staff recommends that the Santa Monica Redevelopment Successor Agency (Agency), adopt the attached resolutions approving the Agency's Draft Recognized Obligation Payment Schedule and administrative budget for January 2015 through June 2015. Executive Summary This report summarizes the obligations of the Agency under AB x1 26 (AB 26) and AB 1484 to prepare Recognized Obligation Payment Schedules (ROPS) and corresponding administrative budgets to be implemented in six -month periods. This report recommends that the Agency adopt the attached resolutions approving the draft ROPS and the Agency's administrative budget for January 2015 through June 2015. Included in the ROPS is the redemption of the 2002 Ocean Park bonds. Background Under AB 1484, the Agency is required to prepare a ROPS, which identifies the former Redevelopment Agency's enforceable obligations and sources of payment of those obligations every six months. 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 June 30, 2015 (ROPS 14 -158) by no fewer than 90 days before the date of the property tax distribution, scheduled for January 2, 2015. In accordance with AB 1484, the CAC has the opportunity to review each ROPS and object to the inclusion of items and the proposed funding sources. 1 Discussion Staff has prepared the ROPS 14 -15B and corresponding administrative budget for the period covering January 1, 2015 to June 30, 2015. Staff recommends that the Agency adopt the attached resolutions. The ROPS 14 -15B includes Successor Agency legally binding and enforceable obligations covering the following categories: 1) bond payments and bond reserves, including the redemption of the 2002 Ocean Park Bonds; 2) indebtedness obligations (including loans, housing agreements and similar obligations); 3) contracts or agreements necessary for continued administration or operation of Agency; and 4) Agency administrative cost allowance. In May 2002, the Redevelopment Agency issued the Ocean Park Redevelopment Projects Tax Allocation Bonds Series 2002. The bonds were issued to refinance the Agency's 1992 Ocean Park Projects Tax Allocation Refunding Bonds, and to provide funds for the purpose of aiding in increasing and preserving low and moderate income housing within or of benefit to the project areas. At present, $6,185,000 of the 2002 Bonds is outstanding with an interest rate of five percent. The bonds are now callable at any time. Redemption of the bonds would result in savings of approximately $637,000 in future interest costs. Per State law, the savings would be apportioned between the various taxing entities within the project area, including the City. Under AB 26, the Agency may receive an administrative cost allowance of up to three percent of the property tax allocated to the Agency each fiscal year, 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 14 -15B (see Attachment A, Exhibit 1 Line Item 30). fr: The administrative budget has been prepared so that the administrative cost allowance authorized under ROPS 14 -15B will reimburse the Agency for expenses associated with implementing the Agency's duties under AB 26 and AB 1484. Next Steps In accordance with AB 1484, staff will forward the Agency- approved ROPS 14 -15B to the CAC for review concurrently with the submission to the Oversight Board for consideration. The CAC review may take place either prior to submission to the Oversight Board or following Oversight Board action. The Oversight Board has the discretion to approve or deny any portion of ROPS 14 -15B. Copies of ROPS 14 -15B, as approved by the Oversight Board, will be sent to the State Controller's Office and the Department of Finance by no later than October 3, 2014 and posted on the Agency's website. DOF is required to make a determination regarding the enforceable obligations on the ROPS no later than 45 days after the Agency's submittal of ROPS 14 -158. Along with the Agency- approved ROPS 14 -15B, staff will also submit to the CAC and the Oversight Board for approval a reconciliation statement that compares approved funding for items listed on ROPS 13 -14B (covering payments authorized during January 1 - June 30, 2014) against actual payments made during the ROPS 13 -14B period. If actual costs were less than authorized costs, the CAC will deduct the difference from the allocations requested by the Successor Agency during the ROPS 14 -15B period. In the event that actual costs were more than projected costs during the ROPS 13 -14B period, the CAC will not compensate the Successor Agency or the City for any overpayments because the Department of Finance has instructed the CAC to deny any reimbursements for payments made above prior authorized amounts. On January 2, 2015, the CAC will transfer property taxes into the Agency's Redevelopment Obligation Retirement Fund (RORF) from which the Agency will pay enforceable obligations listed on the approved ROPS 14 -15B. 3 Financial Impacts & Budget Actions There are no budgetary impacts associated with the adoption of the resolutions approving the draft ROPS 14 -15B and administrative budget, except to the extent that, should the Prior Period Adjustments Form covering the BOPS 13 -14B period January 1, through June 30, 2014, identify unallocated and available prior - period Redevelopment Property Tax Trust Fund ( RPTTF) funds, the available balance will offset the total amount of RPTTF requested by the Successor Agency during the ROPS 14 -15B period. The ROPS 14 -15B simply sets forth the Agency's existing financial obligations and administrative costs for the period January 1, 2015 to June 30, 2015. Prepared by: Tina Rodriguez, Successor Agency Administrator Approved: Andy Agle, Director (--­� Housing and Economic Development Director of Finance Attachments: Forwarded to Successor Agency: Fa Rod Gould City Manager /Chief Administrative Officer Attachment A: Resolution - ROPS 14 -15B (January 2015 — June 2015) Attachment B: Resolution - Successor Agency Admin Budget (January 2015 — June 2015) 11 Reference: Resolution No. 20 (SA) E'?1 Resolution No. 21 (SA)