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HomeMy WebLinkAboutItem 2a Administrative Budget for Successor Agency to Arcadia Redevelopment Agency ov AP L, 0 4 �� GP4IFORA,t 4,, a c Jll\tiv, s-. oil air.:�s,ow tTli Oa\.i/`a STAFF REPORT Development Services Department DATE: March 20, 2012 TO: Mayor and City Council FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director By: Jerry Schwartz, Economic Development Manager 1s. SUBJECT: CONSIDERATION OF AN ADMINISTRATIVE BUDGET FOR THE SUCCESSOR AGENCY TO THE ARCADIA REDEVELOPMENT AGENCY Recommendation: Provide Direction BACKGROUND As part of the dissolution of redevelopment in California, Assembly Bill 26 (AB 26) designates the amount that is available for the annual administrative budget for the wind down of the Agency and the management of the Oversight Board. The budget is based on the tax increment of the former redevelopment agency. The amount referenced in AB 26 for administrative costs is 5% of the tax increment, with a minimum of $250,000 annually. Given the revenues of the Arcadia Redevelopment Agency, the Successor Agency administrative budget will be approximately $250,000 for the 2012-2013 fiscal year. This administrative budget begins once the Oversight Board meets. It is anticipated that this administrative budget limit will also impact the final two months of the 2011-2012 fiscal year, and it was already reflected in the Initial Recognized Obligations Payment Schedule (IROPS) that was approved on February 21st. One of the requirements is that the administrative budget be presented to the Successor Agency before it is sent to the Oversight Board. DISCUSSION The expenses of the Successor Agency to the Arcadia Redevelopment Agency consist of two elements, the Recognized Obligation Schedule (ROPS), and the administrative budget. As a Successor Agency, the Council approved the Initial ROPS or (IROPS) at the February 21st meeting. That covered the period from February 1st thru June 30th, 2012. At a future meeting, you will be asked to approve the ROPS for the July 1 — December 31, 2012 period. As you know, the ROPS includes the existing obligations of the Arcadia Redevelopment Agency when it was shut down, such as principal and interest on redevelopment bonds. The administrative budget represents the cost to run the Successor Agency and expenses to operate the Oversight Board. The total available for this purpose is $250,000 per fiscal year. The first full fiscal year that it takes effect is FY 2012-2013. It will also impact May and June, 2012, the final two months of FY 2011-2012. The reduced admin funds for those two months are already reflected in the IROPS (Exhibit A). The proposed administrative budget for FY 2012-2013 is attached as Exhibit B. Since the Successor Agency has received most of the tax increment that it would have if redevelopment was still in existence, the impact on May and June, 2012 will be relatively small. As was reflected in the approved IROPS, the Successor Agency will basically fund all expenses that were included in the redevelopment budget for 2011- 2012. In 2012-2013, the Successor Agency will be limited to a total of $250,000 in administrative funds for the entire fiscal year. The expenses, as shown in Exhibit B, include staff costs, office supplies, contract services, insurance, support of the Oversight Board, etc. The $248,514 budget clearly does not cover the level of funding formerly allocated to Redevelopment (approximately $682,000 in total costs for 2011- 12). This will leave a shortfall of approximately $433,500 which would need to be incorporated into other portions of the City budget (example shown in Exhibit C). Of the $248,514 proposed budget, staff costs account for approximately $175,000, and include the time necessary to serve as staff to the Successor Agency and Oversight Board along with managing the ongoing process to unwind the Arcadia Redevelopment Agency on a day-to-day basis. The total full time equivalents paid from the administrative budget is recommended at 1.2 FTE, which is 50% of the staffing level when the redevelopment program was active. Staffing costs that are no longer to be allocated to Redevelopment/Successor Agency are proposed to be allocated to the General Fund, Transit, and Measure R. This includes portions of the City Manager, Communications and Marketing Specialist, Assistant Planner, Economic Development Manager, and Assistant City Manager/Development Services Director. The additional costs will be in front of the Council during consideration of the 2012 — 2013 budget Staff believes that the administrative budget described in this staff report and shown in Exhibits A & B is the best method to allocate the limited resources available to the Successor Agency during this dissolution process. This staff report and exhibit are intended to provide an overview of the Successor Agency budget for the 2012 — 2013 fiscal year. The specific breakdown of the itemized budget, including the details of the staffing costs will be included in the overall Development Services Department budget package for the 2012-2013 fiscal year. If this administrative budget is acceptable to the Successor Agency, it can direct that it be presented to the Oversight Board once the board is formed and meeting. Administrative Budget for Successor Agency March 20, 2012 Page 2 of 3 FISCAL IMPACT The Successor Agency costs do not impact the General Fund. These costs will be provided by the Los Angeles County Auditor-Controller. However, reduction in staff allocations to redevelopment will be borne by the General Fund and other Special Funds such as Transit and Measure R. The expected impact to other funds in former redevelopment costs is approximately $433,500 ($184,000 in staffing and $249,500 in overhead, worker's comp, general liability, etc.) It is important to note that a decision on the Successor Agency budget does not preclude the Council from making changes to the General Fund budget and the other proposed allocations of former Redevelopment charges during consideration of the 2012 —2013 budget. RECOMMENDATION Provide Direction. Approved by: Donald Penman, City Manager Attachments: Exhibit A - IROPS Exhibit B - Successor Agency Costs— Fiscal Year 2012-2013 Exhibit C - Proposed Reallocation of Former Redevelopment Costs to Other Funds Administrative Budget for Successor Agency March 20, 2012 Page 3 of 3 333 -r V E Et f H f f E E x x g 1 C t E l E l g ! I E c , g g u H E1LEF El . i F F 1 C . I 4 " 7 11 40 44E " 44 4 1 a , r 1- 1-1- 1- r H H r r,r H /- ;5. I-I-I-r 8om6�88 8 8 8 8 8 8888888888 , , 3 o 1 E§§ 8 g g & g g g g g g g g g g El r n M M H M M r 88886 $ 88 8 888888 m m R.n u 3 g. 1,1 § § §.§o§0.§ IV n p M C r",6 8 p p p p p 888 z a E. 1 R F §. 8 § o17 g im 8<N - r •1 YI YI - ry o tF 8Ca8 88 S8 V 888 888 88 . S.-, 12.6.1t. O Y 1p 4§.§§§. VA o§o - .2- h A O N - - —"fig- n 0868 8 88. 888 8888 a t On§ Y §g§ §Uo§ i °a- - n M6 8 8 s 888 8 88 J t r^'° 10. a $88 $ t§ x 2 W 2 O g 88888888 8 88. 8 8 88888888888888 a w 4 $ ZigC °s.§§ ^ § °8. 3 pp 4§N§§§§ok§§"oo F Y. Z g 8 Y N ,- n N OI ry 8 n 1" h 1 a v ry c W > . 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HH!I! 1 Exhibit B Successor Agency Budget— Fiscal Year 2012-2013 Line Item Amount Staff* $175,814 Legal Services/appraisal services $20,000 Office Supplies $1,500 General Liability Insurance $9,000 Workers Compensation Insurance $1,200 Vehicle Maintenance $500 Oversight Board administration,financial assistance, admin. $41,000 Total $248,514 *Staff Breakdown: Title Percentage of Overall Salary Assistant City Manager/Development Services Director (20%) Economic Development Manager (60%) Senior Administrative Assistant (20%) Administrative Assistant (20%) Total 1.2 (Full Time Equivalents) Exhibit C Proposed Reallocation of Former Redevelopment Costs to Other Funds (FY 2012— 2013)* Total Funds Formerly Allocated to Redevelopment (FY 2011-2012): $682,000 Proposed Successor Agency Budget (See Exhibit B): $248,514 TOTAL Budget to be Reallocated to Other Funds (rounded): $433,500 Staffing: $184,000 (1.2 FTE) Overhead, Liability, Workers Comp, etc. $249,500 *All figures approximate and subject to change through budget process