SR 01-12-2016 3M
Redevelopment Successor Agency
Report
City Council Regular Meeting: January 12, 2016
Agenda Item: 3.M
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To: Redevelopment Successor Agency
From: Andy Agle, Director, Housing Division, Housing and Economic Development
Gigi Decavalles-Hughes, Director
Subject: Recognized Obligation Payment Schedule: July 2016 through June 2017 and
Administrative Budgets
Recommended Action
Staff recommends that the Redevelopment Successor Agency adopt the attached
resolutions approving the Agency’s Draft Recognized Obligation Payment Schedule
(“ROPS 16-17”) and administrative budget for July 1, 2016 through June 30, 2017.
Executive Summary
The Redevelopment Successor Agency is required to prepare Recognized Obligation
Payment Schedules (ROPS) and corresponding administrative budgets to be
implemented in yearly increments. The ROPS 16-17 includes Successor Agency
enforceable obligations of $30,839,302 and an administrative budget of $1,034,021
covering July 1, 2016 to June 30, 2017.
Background
Under AB 1484 and SB 107 which implemented the dissolution of redevelopment
agencies statewide, the Agency is required to prepare a Recognized Obligation
Payment Schedule (ROPS) on a yearly basis starting July 1, 2016, 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, 2017 (ROPS 16-17) by February 1, 2016. In accordance with
AB 1484 and SB107, the CAC has the opportunity to review ROPS and object to the
inclusion of items and the proposed funding sources.
Discussion
Staff has prepared the ROPS 16-17 and corresponding administrative budget for the
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period covering July 1, 2016 to June 30, 2017.
The ROPS 16-17 covering July 1, 2016, to June 30, 2017, 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 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, 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 proposed ROPS 16-17 seeks repayment of loans made by the
City to the former redevelopment agency, including two Parking Authority loans and one
City loan associated with a 1978 acquisition note made prior to redevelopment
dissolution.
Under AB 26 and SB 107, the Agency may receive an administrative cost allowance of
up to three percent of the property tax allocated to the Agency each fiscal year, reduced
by City loan repayments, and 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 yearly period,
commencing on July 1, 2016. The $688,523 administrative cost allowance is included
as an enforceable obligation on the ROPS 16-17 (see Attachment A, Exhibit 1, Line
Item 30). The $1,034,021 administrative budget has been prepared so that the
$688,523 administrative cost allowance authorized under ROPS 16-17 will reimburse
the Agency partially for expenses associated with implementing the Agency’s duties
under AB 26, AB 1484, and SB 107.
Next Steps
In accordance with AB 1484 and SB 107, staff will forward the Agency-approved
ROPS 16-17 to the CAC for review concurrently with the submission to the Oversight
Board for consideration. The CAC review may occur prior to Oversight Board
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submission or following Oversight Board action. Copies of ROPS 16-17, as approved by
the Oversight Board, will be sent to the State Controller’s Office and the Department of
Finance no later than February 1, 2016, and posted on the Agency’s website. DOF is
required to make its determination of the enforceable obligations on the ROPS no later
than April 15, 2016.
Along with the Agency-approved ROPS 16-17, staff will also submit for approval a
reconciliation statement that compares approved funding for it ems listed on
ROPS 15-16A (covering payments authorized during July 1 through
December 31, 2015) against actual payments made during the ROPS 15 -16A 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 16-17 period. In the event that actual costs were more than projected
costs during the ROPS 15-16A 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.
Once ROPS 16-17 is approved by the Oversight Board and DOF, the Successor
Agency will be eligible to submit a "Last and Final Recognized Obligation Payment
Schedule" to the Oversight Board and DOF for approval. If this final schedule is
approved by the Oversight Board and DOF, the Successor Agency will no longer need
to submit an annual Recognized Obligation Payment Schedule to the Oversight Board
or the DOF. Therefore, Successor Agency staff will bring back a Last and Final
Recognized Obligation Payment Schedule for Successor Agency approval after the
Oversight Board and DOF approves ROPS 16-17.
Financial Impacts and Budget Actions
On June 1, 2016 and January 2, 2017, the CAC 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 ROPS
16-17 period.
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There are no other budgetary impacts associated with the adoption of the resolutions
approving the draft ROPS 16-17 and administrative budget, unless the Prior Period
Adjustments Form covering the ROPS 15-16A period July 1, 2015 through
December 31, 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 16-17 period. The ROPS 16-17 simply sets forth the Agency’s existing financial
obligations and administrative costs for the period July 1, 2016, to June 30, 2017.
Prepared By: Tina Rodriguez, Successor Agency Administrator
Approved
Forwarded to Council
Attachments:
A. Attachment A - Resolution SA ROPS Schedule (July 2016 - June 2017)
B. Attachment B - Resolution SA Admin Budget FY 16-17 (July 2016 - June 2017)