SR-09-08-2015-3R
Redevelopment Successor Agency
Report
City Council Regular Meeting: September 8, 2015
Agenda Item: 3.R
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To: Redevelopment Successor Agency
From: Andy Agle, Director, Housing Division, Housing and Economic Development
Subject: Recognized Obligation Payment Schedule: January through June 2016
Recommended Action
Staff recommends that the Redevelopment Succe ssor Agency adopt the attached
resolutions approving the Agency’s Draft Recognized Obligation Payment Schedule and
administrative budget for January 2016 through June 2016.
Executive Summary
The Redevelopment Successor Agency is required to prepare Recognized Obligation
Payment Schedules (ROPS) and corresponding administrative budgets to be
implemented in six-month increments. The ROPS 15-16B includes Successor Agency
enforceable obligations of $15,628,464 and an administrative budget of $253,882
covering January 1, 2016 to June 30, 2016.
Background
Under AB 1484, the Agency is required to prepare a Recognized Obligation Payment
Schedule (ROPS) every six months, which identifies the former Redevelopment
Agency’s enforceable obligations and sources of payment for those obligations.
The Agency is required to submit an approved ROPS to the Department of Finance
(DOF) and Los Angeles County Auditor-Controller (CAC) for the period ending
June 30, 2016 (ROPS 15-16B) by no fewer than 90 days before the date of the property
tax distribution, scheduled on January 2, 2016.
Discussion
Staff has prepared the ROPS 15-16B and corresponding administrative budget for the
period covering January 1, 2016 to June 30, 2016.
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The ROPS 15-16B covering January 1, 2016 to June 30, 2016 includes Successor
Agency legally binding and enforceable obligations covering the following categories:
1) bond payments 2) indebtedness obligations (including loans, housing agreements,
and similar obligations); 3) contracts or agreements necessary for continued
administration or operation of the Agency; and 4) Agency administrative cost allowance.
The Agency has made its final payment in the amount of $28.39 million to the
Los Angeles County Auditor-Controller per the terms of the Stipulated Judgment on
Case No. 34-2013-80001382. As a result, DOF has issued a Finding of Completion and
the Agency may now seek repayments of loans made by the City to the former
redevelopment agency prior to the effective date of the State dissolution laws. The DOF
has taken a very narrow view that these loans must be “for money.” Consequently, the
DOF has categorically rejected former RDA-City loans that are either in the form of
reimbursement agreements, property transfers, or any transfers other than direct
transfers of cash from the City to the RDA. While two cities have prevailed in litigation
filed against the DOF, seeking recovery of loans based upon reimbursement
agreements, the DOF is now seeking to narrow the statutory definition of “loan” in
pending legislation (AB 113) to make recovery of these loan proceeds more difficult.
The Successor Agency requested reimbursement of one of its loans for the
July-December 2015 period (ROPS 15-16A). The DOF rejected the requested
repayment on the grounds that the loan was not “for money.” The City of Glendale has
recently filed a petition for writ of mandate on the issue of whether the DOF has the
authority to reject loans on the grounds that they are not direct cash transfers. As a
result, staff does not recommend seeking repayment of any other former RDA-City
loans until the pending litigation is resolved or the State legislature clarifies or redefines
the meaning of “loan.”
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 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
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included as an enforceable obligation on the ROPS 15 -16B (see Attachment A, Exhibit
1 Line Item 30).
The $253,882 administrative budget has been prepared so that the administrative cost
allowance authorized under ROPS 15-16B 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 15-16B to
the CAC for review concurrently with the submission to the Oversight Board for
consideration. The CAC review may occur prior to Oversight Board submission or
following Oversight Board action. Copies of ROPS 15-16B, as approved by the
Oversight Board, will be sent to the State Controller’s Office and the
Department of Finance no later than October 5, 2015 and posted on the Agency’s
website. DOF is required to make its determination regarding the enforceable
obligations on the ROPS no later than 45 days thereafter.
Along with the Agency-approved ROPS 15-16B, staff will also submit for approval a
reconciliation statement that compares approved funding for items listed on
ROPS 14-15B (covering payments authorized during January 1 through June 30, 2015)
against actual payments made during the ROPS 14-15B period to the CAC and the
Oversight Board. 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 15-16B period. In the event that actual costs were greater than projected costs
during the ROPS 14-15B 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 previously authorized
amounts.
On January 2, 2016, 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 15-16B.
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Financial Impacts & Budget Actions
There are no budgetary impacts associated with the adoption of the resolutions
approving the draft ROPS 15-16B and administrative budget, unless the Prior Period
Adjustments Form covering the ROPS 14-15B period January 1 through June 30, 2015,
identifies unallocated and available prior-period Redevelopment Property Tax Trust
Fund (RPTTF) funds. If there is an available balance, it will offset the total amount of
RPTTF requested by the Successor Agency during the ROPS 15-16B period.
The ROPS 15-16B simply sets forth the Agency’s existing financial obligations and
administrative costs for the period January 1, 2016 to June 30, 2016.
Prepared By: Tina Rodriguez, Successor Agency Administrator
Approved
Forwarded to Council
Attachments:
A. Resolution - ROPS 15-16B (January - June 2016)
B. Resolution Successor Agency Admin Budget January-June 2016
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