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.
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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).
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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.
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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)
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Reference:
Resolution No. 20
(SA)
E'?1
Resolution No. 21
(SA)