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Home My WebLink AboutItem 14a - Approving Recognized Obligation Payment Schule (ROPS) DATE: December 18, 2018 TO: Honorable Mayor and City Council, as the Successor Agency to the Arcadia Redevelopment Agency FROM: Jason Kruckeberg, Assistant City Manager/Development Services Director By: Tim Schwehr, Senior Management Analyst SUBJECT: SUCCESSOR AGENCY RESOLUTION NO. SA-16 APPROVING AND ADOPTING THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE (“ROPS”) FOR THE PERIOD OF JULY 1, 2019, THROUGH JUNE 30, 2020, PURSUANT TO HEALTH AND SAFETY CODE SECTION 34177(m) Recommendation: Adopt SUMMARY As the Successor Agency to the Arcadia Redevelopment Agency, the City must prepare a Recognized Obligation Payment Schedule (“ROPS”) for each fiscal year. The ROPS sets forth the debts and payment obligations of the former Arcadia Redevelopment Agency for the specified period. Each ROPS is subject to the approval of the Successor Agency and the Oversight Board before any of the listed obligations can be paid. It is recommended that the City Council, serving as the Successor Agency to the Arcadia Redevelopment Agency, adopt Resolution No. SA-16 (see Attachment 1) approving and adopting the Recognized Obligation Payment Schedule (“ROPS”) for the period of July 1, 2019, through June 30, 2020. BACKGROUND Following the dissolution of Redevelopment in 2012, the City of Arcadia chose to become the Successor Agency to the Arcadia Redevelopment Agency. 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 pa y the enforceable obligations. The Successor Agency has previously approved ROPS documents that have covered February 1, 2012, through June 30, 2019. All previous ROPS documents were approved by the local Oversight Board, and, with slight modifications, by the State Department of Finance (“DOF”). Funds received have successfully paid all obligations of the Successor Agency to date. Successor Agency Resolution No. SA-16 Recognized Obligation Payment Schedule (“ROPS”) December 18, 2018 Page 2 of 3 Effective July 1, 2018, all local oversight boards in LA County were dissolved and consolidated into five district oversight boards. The Arcadia Successor Agency has been assigned to the Fifth District Consolidated Oversight Board. The ROPS is scheduled to be presented to new Consolidated Oversight Board at their January 10, 2019, meeting at the Los Angeles County Hall of Records. DISCUSSION This ROPS covers the period of July 1, 2019, through June 30, 2020, reflecting the 2019-20 Fiscal Year. The ROPS includes the enforceable obligations that are part of the outstanding redevelopment bond issues, including principal and interest payments, maintenance costs for the last remaining Successor Agency property, legal costs, and payments for bond trustee services. All of these payments would be required if the Redevelopment Agency was still in existence. The ROPS also includes costs for Successor Agency staffing and administrative functions. All of the above-mentioned obligations are standard items that have been included on all previous ROPS documents. The ROPS 19-20 also carries over a line-item from the previous ROPS for funding for escrow, title, and other related services for the land sale, transfer, or dissolution of the final agency-owned property at 33 W. Huntington Drive (Arcadia Self Storage Building). The Successor Agency has recently entered into a Purchase and Sale Agreement to sell this property, but the final sale is not expected to transact until the 2019-20 Fiscal Year. Including this line-item in the ROPS 19-20 will ensure funding is available to complete the sale of the property, or in the event that the property falls out of escrow, that there is adequate funding to sell the property to an alternate buyer. One additional item of note, the ROPS 19-20 does not include a line-item for $150,000 for affordable housing administrative costs. In previous ROPS documents, these funds were included for distribution to the LA County Housing Authority to manage the Successor Agency’s former housing properties. However, pursuant to California HSC Section 34171(p), administrative costs for affordable housing are no longer eligible to be funded through the ROPS. Because all Successor Agency housing properties were transferred to the LA County Housing Authority in September of 2015, this change to ROPS funding will not result in the City incurring any additional costs. If approved, the ROPS will be presented to the Fifth District Consolidated Oversight Board at its January 10, 2019, meeting. Once approved by the Oversight Board, the ROPS will be forwarded to the Department of Finance, the State Controller, and the LA County Auditor-Controller, and posted on the City’s website, prior to the February 1, 2019 deadline. Successor Agency Resolution No. SA-16 Recognized Obligation Payment Schedule (“ROPS”) December 18, 2018 Page 3 of 3 CALIFORNIA ENVIRONMENTAL QUALITY ACT (“CEQA”) The ROPS is exempt from the California Environmental Quality Act under Section 15061(b)(3) because it is considered to be “not a project”. FISCAL IMPACT The proposed ROPS calls for $2,824,526 in funding for the period of July 1, 2019, through June 30, 2020. The Los Angeles County Auditor-Controller will forward funds based on this ROPS to pay the Successor Agency’s continuing obligations. If the ROPS is not approved, the General Fund may be the source to pay for staff costs that are included in the ROPS. RECOMMENDATION It is recommended that the City Council, as the Successor Agency to the Arcadia Redevelopment Agency, adopt Successor Agency Resolution No. SA-16 approving and adopting the Recognized Obligation Payment Schedule for the period of July 1, 2019, through June 30, 2020, pursuant to Health and Safety Code Section 34177(m). 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