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DATE:
TO:
FROM:
STAFF REPORT
Development Services Department
September 3, 2013
Honorable Mayor and City Council, Acting as Successor Agency to the
Redevelopment Agency
Jason Kruckeberg, Assistant City Manager /Development Services Director
By: Jerry Schwartz, Economic Development Manager
SUBJECT: SUCCESSOR AGENCY RESOLUTION NO. SA -7 APPROVING AND
ADOPTING THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE
FOR THE PERIOD OF JANUARY 1, 2014, THROUGH JUNE 30, 2014,
PURSUANT TO HEALTH AND SAFETY CODE SECTION 34177(m) AND
APPROVING PREPARATION OF A NOTICE OF EXEMPTION UNDER
THE CALIFORNIA ENVIRONMENTAL QUALITY ACT
Recommendation: Adopt
SUMMARY
The City of Arcadia serves as 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. This action would
approve a ROPS covering debts and payment obligations for the period of January 1 —
June 30, 2014, and includes $3,824,506 in expenditures. It is subject to the approval of
the Successor Agency, the Oversight Board, and the Department of Finance before any
of the listed obligations can be paid.
BACKGROUND
Redevelopment ended in California on February 1, 2012 with the adoption of Assembly
Bill 1X 26. On June 27, 2012, the Governor signed AB 1484, which modified the
process of dissolution.
The ROPS is used by the Department of Finance and the Los Angeles County Auditor -
Controller to determine how much will be dispersed from the tax increment trust fund to
pay the enforceable obligations of the former agency. The Successor Agency has
previously approved four ROPS documents, which covered all of the 2012 and 2013
calendar years, in six month increments. All four documents were approved by the
Oversight Board and, with slight modifications, by the State Department of Finance
(DOF).
Successor Agency Resolution No. SA -7
September 3, 2013
Page 2 of 3
DISCUSSION
Pursuant to Health and Safety Code Section 34177(m), the Successor Agency has
prepared the ROPS for the six month period of January 1 — June 30, 2014. If approved,
the ROPS will be presented to the Oversight Board at its September 24 meeting, and
forwarded to the LA County Auditor - Controller, the State Controller, and the Department
of Finance before the October 1, 2013, deadline. It will also be posted on the City's
website.
The ROPS that is included with this staff report covers the period of January 1 — June
30, 2014. The administrative portion of this ROPS reflects the limit of a $250,000
administrative cap that is allowed under AB 1X 26. The total amount covered is
$3,824,506, which reflects the enforceable obligations that are part of two outstanding
redevelopment bond issues and project - related costs to complete the sale of four
adjoining properties to Rusnak Mercedes Benz for expansion of the dealership. These
properties were detailed in the Long Range Property Management Plan which was
approved by the Department of Finance on April 4, 2013 and the agreements, which
were approved by the DOF on June 7, 2013.
Specific project - related costs, which are over and above the administrative costs
needed to run the Successor Agency and Oversight Board, can be included on the
ROPS in the period when they are likely to occur. They are included in this ROPS
because it is expected that escrow will close during this ROPS period. The final escrow
documents will need to be sent to the DOF and the land sale proceeds forwarded to the
LA County Auditor Controller for distribution to the taxing entities, including the City of
Arcadia.
FISCAL IMPACT
A total of $3,824,506 has been identified in the proposed ROPS. 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 2014. Under AB
1484, the payment will be made on January 2, 2014. If the ROPS is not approved, the
General Fund may be the source to pay for staff costs that are included in the ROPS
and outstanding bonds may go into default.
Successor Agency Resolution No. SA -7
September 3, 2013
Page 3 of 3
RECOMMENDATION
It is recommended that the City Council adopt Successor Agency Resolution No. SA -7
approving and adopting the Recognized Obligation Payment Schedule for the period of
January 1, 2014, through June 30, 2014, pursuant to Health and Safety Code Section
34177(m) and approving preparation of a Notice of Exemption under the California
Environmental Quality Act.
Approved:
Dominic Lazzar
City Manager
Attachment: Successor Agency Resolution No. SA -7
RESOLUTION NO. SA -7
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 FOR
THE PERIOD OF JANUARY 1, 2014 THROUGH JUNE 30,
2014, PURSUANT TO HEALTH AND SAFETY CODE
SECTION 34177(m) AND APPROVING PREPARATION
OF A NOTICE OF EXEMPTION UNDER THE
CALIFORNIA ENVIRONMENTAL QUALITY ACT
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), was 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 the 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
January 1, 2014 through June 30 2014, 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 BOPS 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 Mayor is hereby authorized and directed to sign the Resolution
and the City Clerk shall certify to the adoption of this Resolution.
Passed, approved and adopted this day of , 2013.
ATTEST:
City Clerk
APPROVED AS TO FORM:
S-t� P. 4""--
Stepheh P. Deitsch
City Attorney
3
Mayor of the City of Arcadia
THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE
[Attached behind this page]
Recognized Obligation Payment Schedule (ROPS) 13 -14B - ROPS Detail
January 1, 2014 through June 30, 2014
(Report Amounts in Whole Dollars)
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Item #
Project Name / Debt Obligation
Obligation Type
Contract/Agreement
Execution Date
Contract/Agreement
Termination Date
Payee
Description /Project Scope
Project Area
Total Outstanding
Debt or Obligation
Retired
Funding Source
Six -Month Total
Non - Redevelopment Property Tax Trust Fund
(Non- RPTTF)
RPTTF
Bond Proceeds
Reserve Balance
Other Funds
Non - Admin
Admin
$ 38,188,566
$ -
$ -
$ -
$ 3,700,249
$ 124,257
$ 3,824,506
1
2001A /Tax Allocation Bonds
Bonds Issued On or
Before 12/31 /10
6/5/2001
5/1/2023
Bank of New York
Bonds issued to fund non - housing
projects
Central
7,846,866
N
889,725
$ 889,725
2
2010 Tax Allocation Bonds
Bonds Issued On or
Before 12/31 /10
9/1/2010
2/1/2027
Bank of New York
Bonds issued to fund non - housing
projects
Central
26,834,368
N
1,777,449
$ 1,777,449
3
Successor Agency Employees
Admin Costs
7/1/2013
6/30/2014
City Employees
Payroll for Successor Agency
employees
Central
87,907
N
87,907
$ 87,907
4
Legal /Appraisal Costs
Legal
7/1/2012
6/30/2013
Atty. /Appraiser
Legal & Appraisal Costs to sell land
Central
10,000
N
10,000
$ 10,000
5
Administrative Overhead
Admin Costs
7/1/2013
6/30/2014
City of Arcadia
Administrative Support services
Central
26,350
N
26,350
$ 26,350
6
Bond Trustee Services
Professional
Services
6/5/2001
2/1/2027
Bank of New York
Trustee & Bond Disclosure Services
Central
1,700
N
1,700
$ 1,700
7
Contract for Consulting Services
Professional
Services
9/1/2010
2/1/2027
Fieldmann Rolapp
Continuing Disclosure - ARA bonds
Central
-
N
$ -
8
Maintenance for Vacant Properties
Property
Maintenance
1/1/2010
7/31 /2015
S & S Fence Co. /Vargas
Olson
North Santa Anita Avenue and Lucile
Street Properties
Central
1,375
N
1,375
$ 1,375
9
Financial Auditing
Professional
Services
7/1/2013
6/30/2014
Caporicci & Larson, CPA
Audit Agency Bonds & Agency
Financial Audit
Central
-
N
$ -
10
Campus Commons
OPA /DDA /Constructs
on
10/1/2010
1/15/2015
Arcadia Commons L.P.
Low Income Senior Housing Project
L/M Housing
3,350,000
N
1,000,000
$ 1,000,000
11
Successor Agency Employees
Project Management
Costs
7/1/2013
6/30/2014
City Employees
Staff Costs for Land Purchase
Agreement With Rusnak
Central
5,000
N
5,000
$ 5,000
12
Legal Costs
Property Dispositions
7/1/2013
6/30/2014
City Attorney
Legal Costs for Land Purchase
Agreement With Rusnak
Central
12,500
N
12,500
$ 12,500
13
Contract for Consulting Services
Professional
Services
7/1/2013
6/30/2014
Keyser Marston Associates
Reuse Analysis for Land Purchase
Agreement with Rusnak
Central
-
Y
$ -
14
Escrow /Title Services
Property Dispositions
7/1/2013
6/30/2014
Escrow and Title
Companies
Escrow and Title for Land Purchase
Agreement with Rusnak
Central
12,500
N
12,500
$ 12,500
15
Remediaton /Demolition Services
Remediation
7/1/2013
6/30/2014
Converse /American
Wrecking
Demolition North Santa Anita Avenue
Buildings - Ready for sale
Central
-
Y
$ -
$ -
$ -
$ -
Recognized Obligation Payment Schedule 13 -14B - Notes
January 1, 2014 through June 30, 2014
Item # Notes /Comments
The bonds have a principal /interest payment due in May 2014 and an interest payment due in November 2014. There may not be sufficient funds in RPTTF to make
1 the payments.
The bonds have an interest payment due in March 2014 and a principal /interest payment due in September 2014. There may not be sufficient funds in RPTTF to make
2 the payments.
There is an existing agreement, first approved in September 2010, that requires a $3.35 million payment in January 2015. The DOF rejected the retention of housing
funds to make the payment as recommended in the Housing DDR. The S.A. needs to accumulate funds to meet this obligation. The is the second increment
10 necessary to meet the obligation and honor the existing agreement.
The primary goal in the Long Range Property Management Plan (approved by the DOF on April 4, 2013), is to sell the four contiguous properties to the Rusnak Group
to expand their dealership in Arcadia and distribute the proceeds to the taxing entities. The S.A. and the Rusnak Group are in escrow on the land sale. Items 11, 121 &
11 14 are specific costs of completing the escrow and closing the land sale. Line 11 is the employee cost related to this specific project.
12 See Note 11. Legal costs to amend agreements and complete the land sale to to the Rusnak Group for expansion of the dealership.
14 See Note 11. Escrow and Title costs to complete the sale of four properties to the Rusnak Group for expansion of the dealership.