HomeMy WebLinkAboutItem 3a: ARA Resolution 251: Amended Enforceable Obligation Payment Schedule Pursuant to AB 1X 26 H
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ei STAFF REPORT
Arcadia Redevelopment Agency
DATE: January 17, 2012
TO: Chairman and Members of the Redevelopment Agency
FROM: Jason Kruckeberg, Assistant City Manager/Development Services DirectorJ--l-
By: Jerry Schwartz, Economic Development Manager
SUBJECT: APPROVAL OF REDEVELOPMENT AGENCY RESOLUTION NO. ARA-
251, A RESOLUTON OF THE ARCADIA REDEVELOPMENT AGENCY
APPROVING AND ADOPTING AN AMENDED ENFORCEABLE
OBLIGATION PAYMENT SCHEDULE PURSUANT TO AB 1X 26
Recommendation: Adopt Agency Resolution No. ARA-251
BACKGROUND
On June 28, 2011, as part of the 2011-2012 State of California budget bill, companion
bills Assembly Bill 1X 26 ("AB 26") and Assembly Bill 1X 27 ("AB 27") were enacted,
which would use a "successor agency" to dissolve all redevelopment agencies unless
the communities that created the redevelopment agencies adopted ordinances to make
certain annual payments to the State. On July 18, 2011, the validity of AB 26 and AB
27 were challenged in the California Supreme Court. On August 11, 2011, and modified
on August 17, 2011, the Supreme Court issued an order in the Legal Action granting a
partial stay of AB 26 and a complete stay of AB 27 during the pendency of the Legal
Action. On December 29, 2011, the Supreme Court issued a final decision in the
matter, finding AB 26 valid but AB 27 invalid. The impact of the State Supreme Court
decision is that all redevelopment agencies are dissolved as of February 1, 2012.
AB 26 requires the Agency to adopt an enforceable obligation payment schedule
("EOPS") setting forth the Agency's enforceable payment obligations prior to January 1,
2012. The Agency adopted the EOPS, which covered the period from July 1 —
December 31, 2011, at the August 16, 2011 meeting. The recognized obligation
payment schedule ("ROPS"), a successor document to the EOPS, would become
effective after the EOPS. The Agency is permitted to make payments for its debts and
obligations only in accordance with the EOPS. However, the Supreme Court extended
the deadline for the effectiveness of the ROPS to May 1, 2012. As a result, an
amended EOPS needs to be prepared that extends until April 30, 2012.
DISCUSSION
AB 26, which has been added as Health and Safety Code Sections 34161 through
34169.5, precludes redevelopment agencies from incurring new indebtedness,
transferring assets, acquiring real property, entering into new contracts or modifying
existing contracts, or adopting or amending redevelopment plans. Health and Safety
Code Section 34169 requires redevelopment agencies to adopt an EOPS providing the
amount of payments obligated to be made, by month, for each enforceable obligation,
through December, 2011.
The EOPS is required to list all of the "enforceable obligations" of the Agency, including
the following: bonds; loans legally required to be repaid pursuant to a payment schedule
with mandatory repayment terms; payments required by the federal government,
preexisting obligations to the state or obligations imposed by state law; judgments,
settlements or binding arbitration decisions that bind the agency; legally binding and
enforceable agreements or contracts; and contracts or agreements necessary for the
continued administration or operation of the agency, including agreements to purchase
or rent office space, equipment and supplies.
The Agency adopted an EOPS on August 16, 2011 by Resolution No. ARA 247. As
was required, the EOPS was submitted to the Los Angeles County Auditor-Controller,
the State Controller, and the State Department of Finance. It was also posted on the
City's website.
A successor document to the EOPS, the ROPS, was intended to set forth the
enforceable obligations of the Agency and be operative on January 1, 2012, after the
expiration of the EOPS under Health and Safety Code Section 34177(1)(3). The Agency
adopted the ROPS on September 20, 2011 by Resolution No. ARA 250. However, as a
result of the Legal Action, the Supreme Court extended the deadline for adoption of the
ROPS to May 1, 2012. Health and Safety Code Section 34177(a)(1), enacted by AB 1X
26, provides that, until an ROPS becomes operative, only payments required pursuant
to the EOPS shall be made, even after the redevelopment agency is dissolved.
Therefore, the Agency is amending the EOPS to cover the time period from January 1,
2012 through April 30, 2012.
Health and Safety Code section 34177(a)(1) also provides that after February 1, 2012,
the following enforceable obligations, set forth in Health and Safety Code section
34171(d)(2), shall be excluded from payments made pursuant to the EOPS: any
agreements, contracts or arrangements between the City and the Agency. However,
Health and Safety Code section 34177(d)(2) provides an exception for the following
agreements between the City and the Agency: (1) any written agreements between the
City and the Agency entered into prior to December 31, 2010, solely for the purpose of
securing or repaying indebtedness obligations to third parties; and (2) loan agreements
entered into between the Agency and the City within two years of the date of creation of
ARA Staff Report
January 17, 2011
Page 2 of 3
the Agency.
The attached Agency Resolution No. ARA 251 adopts an amended EOPS, setting forth
the enforceable obligations and the amount of payments to be made for each of them,
by month, through April, 2012. This EOPS shall be operative even after the Agency is
dissolved on February 1, 2012, and the City, as successor agency to the Agency, shall
continue to make payments in accordance with the amended EOPS, until the ROPS is
operative.
Pursuant to Health and Safety Code Section 34169, the amended EOPS shall be
transmitted to the County Auditor-Controller, the State Controller, and the State
Department of Finance, and shall be posted on the City's website. Pursuant to Health
and Safety Code Section 34169(i), the Agency's action to adopt the amended EOPS
shall not become effective for three business days following its adoption, pending a
request for review of the EOPS by the Department of Finance.
FISCAL IMPACT
There is no fiscal impact from the preparation of the EOPS.
RECOMMENDATION
Adopt Resolution No. ARA 251.
By:
Donald Penman, Executive Director
Attachments: Agency Resolution No. ARA 251
Enforceable Obligation Payment Schedule (EOPS)
ARA Staff Report
January 17, 2011
Page 3 of 3
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RESOLUTION NO. ARA 251
A RESOLUTION OF THE ARCADIA REDEVELOPMENT
AGENCY APPROVING AND ADOPTING AN AMENDED
ENFORCEABLE OBLIGATION PAYMENT SCHEDULE
PURSUANT TO AB 1X 26
WHEREAS, pursuant to the Community Redevelopment Law of the State of
California (California Health & Safety Code, § 33000, et seq.), the City Council of the
City of Arcadia ("City") created the Arcadia Redevelopment Agency ("Agency"); and
WHEREAS, the Agency has been responsible for implementing the
Redevelopment Plan for the Central Redevelopment Project covering certain properties
within the City; and
WHEREAS, as part of the 2011-12 State budget bill, the California Legislature
enacted, and the Governor signed, companion bills AB 1X 26 and AB 1X 27, requiring
that each redevelopment agency be dissolved unless the community that created it
enacts an ordinance committing it to making certain payments; and
WHEREAS, a Petition for Writ of Mandate was filed in the Supreme Court of the
State of California on July 18, 2011 (California Redevelopment Association, et al. v. Ana
Matosantos, et al., Case No. S194861) ("Litigation"), challenging the constitutionality of
AB 1X 26 and AB 1X 27 on behalf of cities, counties and redevelopment agencies and
requesting a stay of enforcement; and
WHEREAS, on August 11, 2011, and modified on August 17, 2011, the Supreme
Court stayed portions of AB 1X 26, and AB 1X 27 in its entirety, during the pendency of
the matter; and
WHEREAS, on December 29, 2011, the Supreme Court issued its final decision
in the Litigation, upholding AB 1X 26, invalidating AB 1X 27, and extending all statutory
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deadlines under AB 1X 26, essentially dissolving all redevelopment agencies
throughout the State effective February 1, 2012; and
WHEREAS, Health and Safety Code section 34169, enacted by AB 1X 26,
requires the Agency to adopt, by August 27, 2011, an Enforceable Obligation Payment
Schedule ("EOPS") setting forth the enforceable obligations of the Agency and the
amounts of payments obligated to be made, by month, through December, 2011; and
WHEREAS, adoption of the EOPS allows the Agency to make payments on
debts and obligations listed on the EOPS for as long as the EOPS is operative; and
WHEREAS, the Agency adopted an EOPS by Resolution No. 247 on August 16,
2011; and
WHEREAS, Health and Safety Code section 34177(1)(3), enacted by AB 1X 26,
provides that the successor agency to the Agency, after the Agency's dissolution, is to
adopt a Recognized Obligation Payment Schedule ("ROPS") succeeding the EOPS
prior to January 1, 2012; and
WHEREAS, the California Supreme Court, in the Litigation, extended the
deadline for adoption of the ROPS to May 1, 2012; and
WHEREAS, Health and Safety Code section 34177(a)(1), enacted by AB 1X 26,
requires that until a ROPS becomes operative, only payments required pursuant to an
EOPS shall be made; and
WHEREAS, Health and Safety Code section 34177(a)(1) also provides that, in
accordance with Health and Safety Code section 34171(d)(2), any agreements,
contracts or arrangements between the City and the Agency shall not constitute payable
enforceable obligations after February 1, 2012; and
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WHEREAS, if the EOPS provides any debts or obligations to be paid by the
Agency to the City pursuant to Health and Safety Code section 34177(a)(1), it may only
be included as an enforceable obligation through the month of January, 2011; and
WHEREAS, the revised EOPS may only include debts or obligations to be paid
by the Agency to the City, pursuant to Health and Safety Code section 34171(d)(2),
after February 1, 2012, if they are: (1) written agreements between the City and the
Agency entered into prior to December 31, 2010, solely for the purpose of securing or
repaying indebtedness obligations to third parties; or (2) loan agreements entered into
between the Agency and the City within two years of the date of creation of the Agency;
and
WHEREAS, because the previously adopted EOPS is operative only through
December 31, 2011 , it must be amended to be operative from January 1, 2012 through
April 30, 2012.
NOW, THEREFORE, THE ARCADIA REDEVELOPMENT AGENCY DOES
HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
SECTION 1. The facts set forth in the recitals above are true and correct and
are incorporated herein by reference.
SECTION 2. The amendment of the EOPS through this Resolution does not
commit the Agency to any action that may have a significant effect on the environment.
As a result, this action does not constitute a project subject to the requirements of the
California Environmental Quality Act. The Agency directs Agency staff to file a Notice of
Exemption within five (5) days following adoption of this Resolution with the Clerk of the
Board of Supervisors of the County of Los Angeles.
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SECTION 3. The Agency hereby approves and adopts the amended
Enforceable Obligation Payment Schedule, in substantially the form attached hereto as
Exhibit A, so that the Agency may continue to meet its enforceable obligations, all as
required by Health and Safety Code Section 34169. The Agency has been required to
act quickly in preparing, approving and adopting the EOPS because of the timing of the
Supreme Court's decision in the Litigation. As a result, the Agency reserves the right to
amend the EOPS in the future to make the EOPS more accurate.
SECTION 4. The Executive Director is hereby authorized and directed to post a
copy of the amended EOPS on the City's website. The Executive Director is further
authorized and directed to transmit, by mail or electronic means, to the Los Angeles
County Auditor-Controller, the State Controller and the State Department of Finance,
notification providing the website location of the posted EOPS, as amended, and other
information as required by AB 1X 26.
SECTION 5. Pursuant to Health and Safety Code Section 34169(i), the
Agency's action to adopt the EOPS as set forth herein shall not be effective for three (3)
business days following adoption of this Resolution, pending a request for review of the
EOPS by the Department of Finance.
SECTION 6. The Chairperson is hereby authorized and directed to sign the
Resolution and the Agency Secretary shall certify to the adoption of this Resolution.
[Signatures on the following page]
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Passed, approved and adopted this 17th day of January, 2012.
Chairperson
Arcadia Redevelopment Agency
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
• (f A
Ste.' en P. Deitsch
Agency Counsel
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EXHIBIT A
ENFORCEABLE OBLIGATION PAYMENT SCHEDULE
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