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STAFF REPORT
Development Services Department
DATE: August 7, 2012
TO: Honorable Mayor and City Council, Acting as Successor Agency to the
Redevelopment Agency
FROM: Jason Kruckeberg, Assistant City Manager /Development Services Directors K
By: Jerry Schwartz, Economic Development Manager iAS
SUBJECT: ADOPT SUCCESSOR AGENCY RESOLUTION NO. SA -4 APPROVING
AND ADOPTING THE RECOGNIZED OBLIGATION PAYMENT
SCHEDULE (ROPS) FOR THE PERIOD OF JANUARY 1, 2013
THROUGH JUNE 30, 2013, PURSUANT TO HEALTH AND SAFETY
CODE SECTION 34177(m)
Recommendation: Adopt
SUMMARY
Assembly Bill 1X 26 required that all redevelopment agencies be dissolved as of
February 1, 2012, and that successor agencies become responsible for winding down
former redevelopment agencies. The City of Arcadia elected to become the Successor
Agency to the Arcadia Redevelopment Agency. One of the Successor Agency's
responsibilities is to prepare a Recognized Obligation Payment Schedule (ROPS) for
each six month period. The ROPS sets forth the debts and obligations of the former
Agency for the specified period. It is subject to the approval of the Successor Agency
and the Oversight Board before any of the listed obligations can be paid.
BACKGROUND
The City of Arcadia chose to become the Successor Agency to the Arcadia
Redevelopment Agency at the January 3, 2012. meeting. One of the responsibilities of
the City, as the Successor Agency, is to prepare the Recognized Obligation Payment
Schedule (ROPS), which sets forth the nature, amount, and source(s) of payment for all
"enforceable obligations" of the Agency to be paid by the Successor Agency.
On June 28, 2011, as part of the California State Budget, the Governor signed AB 1X
26 and AB 1X 27, which dissolved the Redevelopment Agency unless the City agreed
to make specific payments to Los Angeles County. The Arcadia City Council approved
an ordinance agreeing to make these payments. The California Redevelopment
Association and the League of Cities filed a lawsuit challenging the constitutionality of
Successor Agency Resolution No. 4
August 7, 2012
Page 2of3
these bills. On August 11, 2011, the State Supreme Court agreed to take the case and
issued stays on all of AB 1 X 27 and portions of AB 1X 26. On December 29, 2011, the
California Supreme Court issued its opinion, upholding AB 1X 26 and invalidating AB 1X
27. The impact was to dissolve all redevelopment agencies, effective February 1, 2012.
On June 27, 2012, the Governor signed AB 1484, which modified the process of
dissolution that was started with AB 1X 26. One change was to move up the timeframe
for the submission of all future ROPS, starting with the ROPS for the period of January
1 — June 30, 2013.
DISCUSSION
The Successor Agency has previously approved ROPS documents, which covered all
of the 2012 calendar year in six month increments. Both documents were approved by
the Oversight Board, and with slight modifications, by the State Department of Finance
(DOF). The Successor Agency received a payment of $1.94 million from the Los
Angeles County Auditor - Controller based on the approved ROPS for July 1 — December
31, 2012. The funds are to pay the existing obligations that appear on that ROPS.
The ROPS will be used by the Los Angeles County Auditor - Controller to determine how
much will be dispersed from the tax increment trust fund to pay the enforceable
obligations. The ROPS that is included with this staff report covers the period of
January 1 — July 30, 2013, reflecting the second six months of Fiscal Year 2012 -13.
The administrative portion of this ROPS is based on the Successor Agency's
administrative budget for FY 2012 -13 that was approved at the March 20 Council
meeting and was included in the FY 2012 -13 budget that was approved on June 7. It
reflects the $250,000 administrative cap that is required under AB 1X 26. The ROPS
additionally reflects the enforceable obligations that are part of outstanding
redevelopment bonds, including principal and interest payments, annual audit, annual
continuing obligation reports, and payments for bond trustee services. All of these
payments would be required if the Redevelopment Agency was still in existence.
Certain costs that were part of the previous two approved ROPS are continuing in this
ROPS, and other obligations that have been or will be completed by December 31,
2012, have been removed from this ROPS.
Pursuant to Health and Safety Code Section 34177(m), the Successor Agency has
prepared the ROPS for this six month period. If approved, the ROPS will be presented
to the Oversight Board at its August 21 meeting, and forwarded to the LA County
Auditor - Controller, the State Controller, and the Department of Finance before the
September 1, 2012, deadline. It will also be posted on the City's website.
FISCAL IMPACT
The Los Angeles County Auditor - Controller would forward funds based on this ROPS to
pay the Successor Agency's continuing obligations for January 1- June 30, 2013.
Under AB 1484, the payment should be forwarded on January 2, 2013. If the ROPS is
Successor Agency Resolution No. 4
August 7, 2012
Page 3 of 3
not approved, the General Fund may be the source to pay for staff costs that are
included in the ROPS.
RECOMMENDATION
Adopt Successor Agency Resolution No. SA -4 approving and adopting the Recognized
Obligation Payment Schedule (ROPS) for the period of January 1, 2013 through June
30, 2013, pursuant to Health and Safety Code Section 34177(m).
Approved:
Dominic Lau o
City Manager
Attachments: Recognized Obligation Payment Schedule (ROPS)
Successor Agency Resolution No. 4
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RESOLUTION NO. SA - 4
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARCADIA, CALIFORNIA, AS THE SUCCESSOR
AGENCY TO THE ARCADIA REDEVELOPMENT
AGENCY, APPROVING AND ADOPTING THE
RECOGNIZED OBLIGATION PAYMENT SCHEDULE
(ROPS) FOR THE PERIOD JANUARY 1, 2013 THROUGH
JUNE 30, 2013, PURSUANT TO HEALTH AND SAFETY
CODE SECTION 34177(m)
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(m), as modified by the
Supreme Court decision in California Redevelopment Association, et al. v. Ana
Matosantos, et al., Case No. S194861, and AB 1484 requires the Successor Agency to
prepare a Recognized Obligation Payment Schedule ( "ROPS ") for each six month
period; and
WHEREAS, Health and Safety Code section 34177(m) requires the Successor
Agency to submit the ROPS to the Oversight Board for approval; and
WHEREAS, Health and Safety Code section 34177(m) requires that upon
approval of each ROPS by the Oversight Board, 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, and the State of California
Department of Finance, and post the Approved ROPS on the Successor Agency's
website; and
1
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 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 prepare a Notice of Exemption within five (5) days following the date of
adoption of this Resolution.
SECTION 3. The Successor Agency hereby approves and adopts the ROPS for
the period January 1, 2013 through June 30, 2013, 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 ROPS, including submission of the ROPS to the Successor
Agency's oversight board, and the submission of the Approved ROPS to the Los
Angeles County Auditor - Controller, the California State Controller, and the State of
2
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
ATTEST:
City Clerk
APPROVED AS TO FORM:
Stephen P. Deitsch
City Attorney
3
August, 2012.
Mayor of the City of Arcadia
EXHIBIT A
THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE
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