SR 01-10-2017 3A
Redevelopment Successor Agency
Report
City Council Meeting : January 10, 20 17
Agenda Item: 3.A
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To: Redevelopment Successor Agency
From: Andy Agle, Director , Housing and Economic Development
Subject: Recognized Obligation Payment Schedule: July 2017 through June 2018 and
Administrative Budgets
Recommended Action
Staff recommends that the Redeve lop ment Successor Agency adopt resolutions
approving the Agency’s draft r ecognized o bligation p ayment s chedule and
administrative budget for July 1, 2017 through June 30, 2018.
Executive Summary
The Redevelopment Successor Agency is required to prepare r ecog nized o bligation
p ayment s chedules (ROPS) and corresponding administrative budgets to be
implemented in yearly increments. In November 2016, the Agency submitted a last and
final ROPS to the California Department of Finance. The last and final ROPS includ es
all anticipated Agency obligations through 2042, when all obligations will be retired.
However, the Department of Finance has not yet approved the last and final ROPS,
requiring the Agency to submit an annual ROPS for Fiscal Year 17 -18 by February 1,
2 017.
Background
Under the governing statutes that implemented the dissolution of redevelopment
agencies statewide, each redevelopment successor agency is required to prepare a
r ecognized o bligation p ayment s chedule (ROPS) on a yearly basis. The ROPS
ident ifies a former r edevelopment a gency’s enforceable obligations and sources of
payment for those obligations. Each successor agency is required to submit an
approved ROPS to the California Department of Finance and the relevant c ounty
a uditor -c ontroller for the period ending June 30, 2018 (ROPS 17 -18) by
February 1, 2017.
On November 1, 2016, the Santa Monica Redevelopment Successor Agency Board
(Agency) approved a last and final ROPS (Last and Final ROPS) for submittal to the
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Agency’s Oversight Board as a final step in the process of dissolving the Agency.
The Last and Final ROPS was approved by the Agency’s Oversight Board on
November 14, 2016. The Oversight Board -approved Last and Final ROPS was then
submitted to the Department of Finance on November 16, 2016. Under SB 107, the
California Department of Finance has 100 days to review and approve the Last and
Final ROPS. In order to ensure that the Agency’s FY 2017 -18 enforceable obligations
are paid in the event that the Last and Final ROPS is not approve d by February 1, 2017 ,
staff has prepared a concurrent annual ROPS for fiscal period 2017 -18 and
corresponding administrative budget that will be submitted to the Department of Finance
and the Los Angeles County Auditor -Controller for their review and appr oval .
Discussion
The ROPS 17 -18 for the period of July 1, 2017 to June 30, 2018 includes Successor
Agency e nforceable obligations within the following categories: 1) bond payments;
2) indebtedness obligations (including loans, housing agreements, and simi lar
obligations); 3) contracts or agreements necessary for continued administration or
operation of Agency; and 4) Agency administrative cost allowance. All proposed
ROPS 17 -18 enforceable obligations have been previously listed and approved for
payment on a previous ROPS. 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, based upon an approved administrative budget which justifies
the administ rative cost allowance. Based on last fiscal year’s property tax allocation to
the Agency, the admin cost allowance cap for fiscal year 2017 -18 would be $787,523.
The $775,650 administrative budget has been prepared so that the administrative cost
allowanc e authorized under ROPS 17 -18 will reimburse the Agency for expenses
associated with implementing the Agency’s duties under the redevelopment dissolution
statutes . The administrative budget is included as an enforceable obligation on the
ROPS 17 -18 (see At tachment A, Exhibit 1, Line Item 30).
The proposed ROPS 17 -18 also seeks prepayment of a Wells Fargo loan during the
first fiscal period (July 2017 through December 2017), when approximately $12.8 million
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of the Wells Fargo loan principal will be outstand ing. The loan can be prepaid at any
time without penalty. The prepayment of the loan would result in estimated savings of
approximately $192,000 in future interest costs. Per State law, the savings would be
apportioned between the various taxing entities within the project area, including
the City.
If the Last and Final ROPS is approved by the DOF after the item is considered by
Council but before the Oversight Board meeting scheduled for January 18 , 2017,
the Oversight Board meeting will be cancelled an d the Last and Final ROPS will take
precedence.
Next Steps
With Agency board approval, s taff will forward the Agency -approved ROPS 17 -18 to the
Los Angeles County Auditor -Controller for review after approval by Oversight Board.
Copies of the ROPS 17 -18, as approved by the Oversight Board, will also be sent to the
State Controller’s Office and the Department of Finance and posted on the Agency’s
website no later than February 1, 2017. The Department of Finance must make its
determination regarding the ROP S 17 -18 no later than April 15, 2017.
Financial Impacts and Budget Actions
On June 1, 2017 and January 2, 2018, the Los Angeles County Auditor -Controller will
transfer property taxes into the Agency’s cash account from which the Agency will pay
enforceabl e obligations listed on the approved ROPS 17 -18. The Agency has already
transferred approximately $12.2 million in unspent Wells Fargo loan proceeds to the
Agency’s cash account to prepay the loan. The loan balance of approximately $608,000
would be funded by unrestricted cash proceeds held by the Agency to be paid during
the first period of the ROPS 17 -18.
There are no other budgetary impacts associated with the adoption of the resolutions
approving the ROPS 17 -18 and administrative budget. The ROPS 17 -1 8 simply sets
forth the Agency’s existing financial obligations and administrative costs for the period
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July 1, 2017, to June 30, 2018.
Prepared By: Steven Hull, Principal Administrative Analyst
Approved
Forwarded to Council
Attachments:
A. Attachm ent A - Resolution ROPS 17 -18
B. Attachment B - Resolution SA Admin Budget FY 17 -18
Attachment A
Successor Agency Meeting: January 10, 2017 Santa Monica, California
RESOLUTION NO. (SA)
A RESOLUTION OF THE SANTA MO NICA REDEVELOPMENT SUCCESSOR
AGENCY APPROVING AND ADOPTING THE RECOGNIZED OBLIGATION
PAYMENT SCHEDULE FOR JULY 2017 – JUNE 2018
WHEREAS, pursuant to the California Community Redevelopment Law (Health
and Safety Code Section 33000 et seq.) (the “Redevelopment Law”), the City Council of
the City of Santa Moni ca (the “Council”) adopted the Earthquake Recovery
Redevelopment Project by Ordinance No. 1747 (CCS) on June 21, 1994, the Downtown
Redevelopment Project by Ordinance No. 1021 (CCS) on January 13, 1976, the Ocean
Park 1A Project by Ordinance No. 497 (CCS ) on June 30, 1960, and the Ocean Park 1B
Project by Ordinance No. 516 (CCS) on January 24, 1961 (collectively the
“Redevelopment Plans”); and
WHEREAS, the California Legislatur e adopted, and the Governor signed,
Assembly Bill Nos. 26 and 27 (2011-2012 1 st Ex. Sess.) enacted as Stats. 2011, 1 st Ex.
Sess. 2011-2012, chs. 5-6 (hereina fter AB 26 and AB 27) into law; and
WHEREAS, in July 2011, California Redevelopment Agency v. Matosantos was
filed in the California Supr eme Court, challenging the cons titutionality of AB 26 and AB
27, and on December 29, 2011, the Supr eme Court issued its opinion in Matosantos ,
upholding AB 26 and exercising its power of reformation to revise and extend each
effective date or deadline for per formance of an obligation in par t 1.85 of division 24 of
the Redevelopment Law, and invalidating AB 27; and
2
WHEREAS, the City of Santa Monica is the designated Successor Agency of the
Redevelopment Agency of the City of Santa Monica, within the meaning of AB 26; and
WHEREAS, Section 34177(a)(1) of the Redevelopment Law, as reformed by the
California Supreme Court in Matosantos , provides that on or af ter February 1, 2012, and
until a Recognized Obligation Payment Sc hedule becomes operative, only payments
required pursuant to an enforceable obligat ions payment schedule shall be made; and
WHEREAS, Section 34177(a)(3) of the R edevelopment Law, as reformed by the
California Supreme Court in Matosantos , provides that commenc ing on May 1, 2012, only
those payments listed in a Recognized Ob ligation Payment Schedul e may be made by
the Successor Agency from the funds specifi ed in the Recognized Obligation Payment
Schedule; and
WHEREAS, the California Legislatur e adopted, and the Governor signed,
Assembly Bill No. 1484 enacted as Stats. 2012, ch. 25 (hereinafter AB 1484) into law;
and
WHEREAS, the California Legislature adopted, and the Governor signed, Senate
Bill No. 107 enacted as Stats. 2015 ch. 325 (hereinafter SB 107) into law; and
WHEREAS, SB 107 requires the Successor A gency to submit to the Los Angeles
County Auditor-Controller the ROPS for the per iod ending June 30, 2018, for its review
before approval by the Oversight Board; and
WHEREAS, SB 107 requires the Successor Agency to submit to the DOF the
ROPS for the period ending June 30, 2018, which has to be approved by the Oversight
Board, no later than February 1, 2017; and
3
WHEREAS, under Title 14 of the Calif ornia Code of Regulations, Section
15061(b)(3), the approval of a Recognized Oblig ation Payment Schedule is exempt from
the requirements of the California Environmental Quality Act (“CEQA”), in that it is not a
project as the adoption of a Recognized Ob ligation Payment Schedul e will not have the
potential of causing a significant environmenta l effect and it can be seen with certainty
that there is no possibility that the adoption of Recogniz ed Obligation Payment Schedule
will have any significant effect on the environment; and
WHEREAS, in March 2011 the Redevelopment Agency obtained a bank loan from
the Wells Fargo Bank (“Bank Loan”), to be se cured by redevelopment tax increment; and
WHEREAS, the Bank Loan issued to prov ide funds to construct certain parks and
public facilities with the City’s redevelopment project areas; and
WHEREAS, the Bank Loan can be prepaid at any time; and
WHEREAS, the Successor Agency has reviewed and duly considered the
Recognized Obligation Payment Schedule for the period July 2017 – June 2018,
inclusive, attached as Exhibit 1, and other wr itten evidence presented at the meeting, if
any; and
WHEREAS, the 2017-18 ROPS provides for prepayment of the Bank Loan in 2017
from funds currently held by the Successo r Agency and/or allocated to the Successor
Agency by the County Auditor-Controller a fter approval of the 2017-18 ROPS by the
Department of Finance.
NOW, THEREFORE, THE SUCCE SSOR AGENCY DOES RESOLVE AS
FOLLOWS:
4
SECTION 1. The Successor Agency hereby finds and determines that the
foregoing recitals are true and correct.
SECTION 2. The Successor Agency hereby approves and adopts the draft
Recognized Obligation Payment Schedule for the period July 2017 – June 2018,
inclusive, attached as Exhibit 1 (referenc ed hereinafter as “the Recognized Obligation
Payment Schedule”).
SECTION 3. The Successor Agency authorizes the Chief Administ rative Officer or
his designee to:
(1) Submit the Recognized Obligation Paym ent Schedule to the County Auditor-
Controller for review;
(2) Submit the Recognized Obligation Pa yment Schedule to the Oversight Board
for approval;
(3) Submit an electronic copy of the Recognized Obli gation Payment Schedule to
the State Department of Finance for approval;
(4) Designate a Successor Agency repres entative to respond to all questions
related to the Recognized Obligation Payment Schedule; and
(5) Take such other actions and execute such other documents as are appropriate
to effectuate the intent of this Reso lution and to implement the Recognized
Obligation Payment Schedule on behal f of the Successor Agency.
SECTION 4. The Secretary of the Succe ssor Agency shall cert ify the adoption of
this Resolution and thenceforth and thereafter t he same shall be in full force and effect.
5
APPROVED AS TO FORM:
_______________________
JOSEPH LAWRENCE
Successor Agency Counsel
Exhibit 1: Recognized Obligation Paym ent Schedule (ROPS 17-18) July 2017 – June
2018
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Attachment B
Successor Agency Meeting: January 10, 2017 Santa Monica, California
RESOLUTION NO. (SA)
A RESOLUTION OF THE SANTA MO NICA REDEVELOPMENT SUCCESSOR
AGENCY APPROVING AND ADOPTING THE ADMINISTRATIVE BUDGET
FOR THE PERIOD JULY 2017 – JUNE 2018, INCLUSIVE
WHEREAS, pursuant to the California Community Redevelopment Law (Health
and Safety Code Section 33000 et seq.), the City Council of the Cit y of Santa Monica
(the “Council”) adopted the Earthquake Recove ry Redevelopment Project by Ordinance
No. 1747 (CCS) on June 21, 1994, the Downto wn Redevelopment Pr oject by Ordinance
No. 1021 (CCS) on January 13, 1976, the Ocean Park 1A Project by Ordinance No. 497
(CCS) on June 30, 1960, and the Ocean Park 1B Project by Ordinance No. 516 (CCS)
on January 24, 1961 (collectively the “Redevelopment Plans”); and
WHEREAS, the California Legislature adopted, and the Go vernor signed,
Assembly Bill No. x1 26 and 27 x1 (2011-2012 1 st Ex. Sess.) enacted as Stats. 2011, 1 st
Ex. Sess. 2011-2012, chs. 5-6 (herei nafter AB 26 and AB 27) into law; and
WHEREAS, in July 2011, California Redevelopment Agency v. Matosantos was
filed in the California Supr eme Court, challenging the cons titutionality of AB 26 and AB
27, and on December 29, 2011, the Supreme Court issued its opinion in Matosantos ,
upholding AB 26 and exercising its power of reformation to revise and extend each
effective date or deadline for per formance of an obligation in part 1.85 of division 24 of
the California Health and Safety Code, and invalidating AB 27; and
2
WHEREAS, the City of Santa Monica is the designated Successor Agency of the
Redevelopment Agency of the City of Santa Monica, within the meaning of AB 26; and
WHEREAS, Section 34177(j) of the California Health and Safety Code provides
that the Successor Agency shall prepare an administrative budget (“Administrative
Budget”) and submit it to t he Oversight Board of the Successor Agency for its approval;
and
WHEREAS, the Administrative Budget shall include the following:
(1) Estimated amounts for successor agency administrative costs for the
upcoming annual fiscal period;
(2) Proposed sources of paym ent for the costs identif ied in subparagraph (1);
(3) Proposals for arrangements for admin istrative and operations services
provided by a city, county, city and county, or other entity; and
WHEREAS, on February 14, 2012, the Successor Agency approved a
Reimbursement Agreement by and between the City of Sa nta Monica and Successor
Agency, Contract No. 9549 (CCS/RAS/SA), in accordance with Section 34171(d)(1)(F)
of the California Health and Safety Code; and
WHEREAS, Section 34177(k) of the California Health and Safety Code requires
the Successor Agency to provide administrati ve cost estimates, from its approved
Administrative Budget that are to be paid from property tax revenues deposited in the
Redevelopment Property Tax Trust Fund, to the Los Angeles Count y Auditor-Controller
3
for each six month fiscal period; and
WHEREAS, under Title 14 of the Calif ornia Code of Regulations, Section
15061(b)(3), the approval of the Administrative Budget is exempt fr om the requirements
of the California Environmental Quality Act (“C EQA”), in that it is not a project as the
adoption of the Administrative Budget will not have the potentia l of causing a significant
environmental effect and it can be seen with cert ainty that there is no possibility that the
adoption of the Administrati ve Budget will have any si gnificant effect on the
environment; and
WHEREAS, the California Legislature adopted, and the Go vernor signed,
Assembly Bill No. 1484 enacted as Stats. 2012, ch. 25 (hereinafter AB 1484) into law;
and
WHEREAS, the California Legislature adopted, and the Governor signed, Senate
Bill No. 107 enacted as Stats. 2015 ch. 325 (hereinafter SB 107) into law; and
WHEREAS, SB 107, requires the Sant a Monica Redevelopment Successor
Agency to submit to the Los Angeles Coun ty Auditor-Controller the ROPS for the period
ending June 30, 2018, for its review befor e approval by the Oversight Board; and
WHEREAS, SB 107, requires the Sant a Monica Redevelopment Successor
Agency to submit to the St ate of California Department of Finance the ROPS for the
period ending June 30, 2018, whic h must be approved by the Ov ersight Board, no later
than February 1, 2017; and
WHEREAS , the Successor Agency has revi ewed and duly considered the
4
Administrative Budget for the period July 2017 – June 2018, inclusive, attached as
Exhibit 1, and other written evidence presented at the meeting, if any.
NOW, THEREFORE, THE SUCCE SSOR AGENCY DOES RESOLVE AS
FOLLOWS:
SECTION 1. The Successor Agency hereby finds and determines that the
foregoing recitals are true and correct.
SECTION 2. The Successor Agen cy hereby approves and adopts the
Administrative Budget for the period July 2017 – June 2018, inclusive, attached as
Exhibit 1.
SECTION 3. The Successor Agency authoriz es the Chief Administrative Officer
or his designee to:
(1) Provide an administrative cost esti mate to the County Auditor-Controller for
the period July 2017 – June 2018, incl usive, based upon the approved
Administrative Budget; and
(2) Submit the Administrative Budget to the Oversight B oard for approval;
(3) Take such other actions and exec ute such other documents as are
appropriate to effectuate the intent of this Resolution and to implement the
Administrative Budget on behalf of the Successor Agency.
5
SECTION 4. The Secretary of the Succe ssor Agency shall cert ify the adoption of
this Resolution and thenceforth and thereafter t he same shall be in full force and effect.
APPROVED AS TO FORM:
_______________________
JOSEPH LAWRENCE
Successor Agency Counsel
Exhibit 1: Successor Agency Administrative Budget
SUCCESSOR AGENCY ADMINISTRATIVE BUDGET
Exhibit 1
Costs FY 2017 ‐18 Total
Total Staffing Costs for appx 1.4 FTEs 215,385
Supplies and Expenses Costs FY 2017 ‐18 Total
Custodial Services 2,236
Office Supplies and Expenses 5,020
Office Equipment 941
General Liability/Auto 1,923
Conferences, Meetings, Travel 603
Training 2,253
Mileage 114
Utilities ‐ Light/Power 2,293
Utilities ‐ Telephone 1,625
Utilities ‐ Water 2,451
Legal Expense 7,861
Bank Fees 5,121
Fiscal Agent Fees 12,460
Financial Consultant Services 7,313
Audit Services 16,000
Successor Agency Office Space Rent 492,050
Total Supplies and Expenses Costs 560,265
Total Successor Agency Administrative Costs * 775,650
* Per HSC 34171 (b), the administrative cost allowance shall be up to 3 percent of
actual property tax distributed in the preceding fiscal year, le ss prior year administrative
cost allowance and City-Agency loan repayment s pursuant to HSC section 34191.4 (b).
Reference:
Resolution No. 32 (SA)
&
Resolution No. 33 (SA)