HomeMy WebLinkAboutItem 3f: Resolution 6820 as Successor Agency to Arcadia Redevelopment Agency Adopting Recognized Obligation Payment Schedule A 00 AR
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REPORT
Development Services Department
DATE: February 21, 2012
TO: Mayor and City Council
FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director-52X
By: Jerry Schwartz, Economic Development Manager 6c
SUBJECT: CONSIDERATION OF RESOLUTION NO. 6820, APPROVING AND
ADOPTING AN INITIAL DRAFT OF THE RECOGNIZED OBLIGATION
PAYMENT SCHEDULE PURSUANT TO HEALTH AND SAFETY CODE
SECTION 34177(1)
Recommendation: Adopt Resolution No. 6820
SUMMARY
AB 1X 26 provides that all redevelopment agencies were dissolved as of February 1,
2012, and that successor agencies would be responsible for winding down all such
redevelopment agencies. The City of Acadia ("City") elected to become the successor
agency to the Arcadia Redevelopment Agency ("Agency"). One of the City's
responsibilities under AB 1X 26, as the successor agency, is to prepare an initial draft of
the Recognized Obligation Payment Schedule ("ROPS"), which sets forth all of the
debts and obligations of the former Agency, and submit it for approval of the oversight
board. Pursuant to AB 1X 26, only debts set forth in the approved ROPS may be paid.
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,
dissolving the Agency, unless the City elected to participate in the "Alternative Voluntary
Redevelopment Program" established by AB 27 and paid an annual "community
remittance" payment to the County of Los Angeles. On July 18, 2011, a lawsuit was
filed in the California Supreme Court challenging the constitutionality of AB 26 and AB
27 on behalf of cities, counties and redevelopment agencies. On December 29, 2011,
the Supreme Court issued its opinion, upholding AB 26, invalidating AB 27, extending
certain statutory deadlines under Health and Safety Code Sections 34170 through
34191, and dissolving all redevelopment agencies throughout the State, effective
February 1, 2012.
DISCUSSION
The City elected to become the successor agency to the Agency on January 3, 2012.
One of the responsibilities of the City, as successor agency, is to prepare a Recognized
Obligation Payment Schedule ("ROPS"), which sets forth the nature, amount, and
source(s) of payment of all "enforceable obligations" of the Agency (as defined by law),
to be paid by the successor agency after the Agency's dissolution, covering the forward-
looking six month fiscal period, except for the initial draft of the ROPS, which is to cover
the period from February 1, 2012, through June 30, 2012. Only payments required
pursuant to the ROPS may be made by the successor agency, after May 1, 2012.
The "enforceable obligations" listed in the ROPS may include 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; contracts or agreements necessary for the continued administration or
operation of the agency, including agreements to purchase or rent office space,
equipment and supplies; and amounts borrowed from or payments owing to the Low
and Moderate Income Housing Fund of a redevelopment agency, which had been
deferred as of June 29, 2011. However, the ROPS is to exclude pass-through
payments to be made by the county after dissolution of the Agency and any
agreements, contracts or arrangements between the City and the Agency, except any of
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 the Agency.
Pursuant to Health and Safety Code section 34177(1)(2), as modified by the Supreme
Court's opinion in the Legal Action, the City, as successor agency, is required to
prepare an initial draft of the ROPS covering the period from February 1, 2012, through
June 30, 2012, by March 1, 2012. This draft is submitted to an external auditor
(pursuant to Health and Safety Code section 34182, either the county auditor-controller
or its designee), for review and certification as to its accuracy ("Certified ROPS"). The
Certified ROPS is submitted to and duly approved by the oversight board ("Approved
ROPS"). The Approved ROPS is finally submitted to the county auditor-controller, the
State Controller's office and the State Department of Finance, and posted on the City's
website.
The City, as successor agency, has prepared the initial draft of the ROPS covering the
period from February 1, 2012 through June 30, 2012. It needs to be submitted to an
external auditor for review and certification.
Resolution No. 6820
February 21, 2012
Page 2 of 3
FISCAL IMPACT
There is no impact on the General Fund. All tax increment funds, including low/mod
housing funds, will eventually be forwarded to the Los Angeles County Auditor-
Controller for distribution to the various taxing entities (LA County, City of Arcadia,
Arcadia School District, Pasadena Community College District, and others). In the
future, the Los Angeles County Auditor-Controller will forward funds to the City to pay
the Agency's continuing obligations based on approved ROPS.
RECOMMENDATION
Adopt Resolution No. 6820, approving and adopting an initial draft of the Recognized
Obligation Payment Schedule pursuant to Health and Safety Code section 34177(1).
Approved by: = �� ��-►tea /_
Donald Penman, City Manager
Attachments: Initial Recognized Obligation Payment Schedule (IROPS)
Resolution No. 6820
Resolution No. 6820
February 21, 2012
Page 3 of 3
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RESOLUTION NO. 6820
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARCADIA, CALIFORNIA, AS THE SUCCESSOR
AGENCY TO THE ARCADIA REDEVELOPMENT
AGENCY, APPROVING AND ADOPTING AN INITIAL
DRAFT OF THE RECOGNIZED OBLIGATION PAYMENT
SCHEDULE PURSUANT TO HEALTH AND SAFETY
CODE SECTION 34177(1)
WHEREAS, pursuant to Health and Safety Code section 34173(d), on January 3,
2012, the City of Arcadia ("Successor Agency") elected to become the successor
agency to the Arcadia Redevelopment Agency; and
WHEREAS, Health and Safety Code section 34177(1)(2), as modified by the
Supreme Court decision in California Redevelopment Association, et al. v. Ana
Matosantos, et al., Case No. S194861, requires the Successor Agency to prepare an
initial draft of the recognized obligation payment schedule ("ROPS") by March 1, 2012,
covering the period from February 1, 2012 through June 30, 2012; and
WHEREAS, Health and Safety Code section 34177(1)(2) requires the Successor
Agency to submit the initial draft of the ROPS to an external auditor, either the Los
Angeles County Auditor-Controller or its designee, for the auditor's review and
certification as to its accuracy; and
WHEREAS, Health and Safety Code section 34177(1)(2) requires the Successor
Agency to submit the ROPS certified by the external auditor ("Certified ROPS") to the
Successor Agency's oversight board for its approval, and upon such approval, the
Successor Agency is required to submit a copy of the approved ROPS ("Approved
ROPS") to the Los Angeles County Auditor-Controller, the California State Controller,
1
and the State of California Department of Finance, and post the Approved ROPS on the
Successor Agency's website; and
WHEREAS, all other legal prerequisites to the adoption of this Resolution have
occurred.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA, AS THE SUCCESSOR AGENCY TO THE ARCADIA
REDEVELOPMENT AGENCY, DOES HEREBY FIND, DETERMINE AND RESOLVE
AS FOLLOWS:
SECTION 1. The Recitals set forth above are true and correct and are
incorporated into this Resolution by this reference.
SECTION 2. The approval of the initial draft of the ROPS through this Resolution
does not commit the Successor Agency to any action that may have a significant effect
on the environment. As a result, such action does not constitute a project subject to the
requirements of the California Environmental Quality Act. City staff is authorized and
directed to file a Notice of Exemption with the appropriate official of the County of Los
Angeles, California, within five (5) days following the date of adoption of this Resolution.
SECTION 3. The Successor Agency hereby approves and adopts the initial draft
of the ROPS, in substantially the form attached to this Resolution as Exhibit "A", as
required by Health and Safety Code Section 34177.
SECTION 4. The City Manager is hereby authorized and directed to take any
action necessary to carry out the purposes of this Resolution and comply with
applicable law regarding the initial draft of the ROPS, including submitting the initial
draft of the ROPS to the Los Angeles County Auditor-Controller, or its designee, the
2
submission of the Certified ROPS to the Successor Agency's oversight board, upon the
oversight board's formation, the submission of the Approved ROPS to the Los Angeles
County Auditor-Controller, the California State Controller, and the State of California
Department of Finance, and posting the Approved ROPS on the Successor Agency's
website.
SECTION 5. If any provision of this Resolution or the application thereof to any
person or circumstance is held invalid, such invalidity shall not affect other provisions or
applications of this Resolution which can be given effect without the invalid provision or
application, and to this end the provisions of this Resolution are severable. The City
Council hereby declares that it would have adopted this Resolution irrespective of the
invalidity of any particular portion thereof.
SECTION 6. This Resolution shall take effect immediately.
SECTION 7. The City Clerk shall certify to the adoption of this Resolution.
Passed, approved and adopted this day of , 2012.
Mayor of the City of Arcadia
ATTEST:
City Clerk
APPROVED AS TO FORM:
kpite,„, V_
Stephen P. Deitsch
City Attorney
3
EXHIBIT "A"
INITIAL DRAFT OF THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE
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