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Home My WebLink AboutItem 13a - Successor Agency Resolution SA-20 and SA-21 DATE: December 21, 2021 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, Economic Development Manager SUBJECT: SUCCESSOR AGENCY RESOLUTION NO. SA-20 APPROVING AND ADOPTING A RECOGNIZED OBLIGATION PAYMENT SCHEDULE AND SUCCESSOR AGENCY RESOLUTION NO. SA-21 APPROVING AND ADOPTING A LAST AND FINAL RECOGNIZED OBLIGATION PAYMENT SCHEDULE. SUCCESSOR AGENCY RESOLUTION NO. SA-20 APPROVING AND ADOPTING A RECOGNIZED OBLIGATION PAYMENT SCHEDULE (“ROPS”) FOR THE PERIOD OF JULY 1, 2022, THROUGH JUNE 30, 2023, PURSUANT TO HEALTH AND SAFETY CODE SECTION 34177(m) Recommendation: Adopt SUCCESSOR AGENCY RESOLUTION NO. SA-21 APPROVING AND ADOPTING A LAST AND FINAL RECOGNIZED OBLIGATION PAYMENT SCHEDULE (“ROPS”) FOR THE PERIOD OF JULY 1, 2022, THROUGH DECEMBER 31, 2026, PURSUANT TO HEALTH AND SAFETY CODE SECTION 34177(m) Recommendation: Adopt SUMMARY As the Successor Agency to the Arcadia Redevelopment Agency (“Successor Agency”), the City must prepare a Recognized Obligation Payment Schedule (“ROPS”) for each fiscal year. The Successor Agency is eligible this year to submit a Last and Final ROPS following completion of its bond refinancing and sale of the last Agency-owned property. Approval of a Last and Final ROPS sets forth the debts and payment obligations of the Successor Agency through the first half of the 2026-27 Fiscal Year when the final bond series payment is scheduled to be made. In addition to a Last and Final ROPS, the State Department of Finance (“DOF”) requires that the Successor Agency also adopt an annual ROPS for Fiscal Year 2022-23 to ensure that funding is in place to pay all Agency costs in the event there is a delay in the approval of the Last and Final ROPS by the DOF. Successor Agency Resolution No. SA-20 & SA-21 Recognized Obligation Payment Schedule (“ROPS”) December 21, 2021 Page 2 of 4 It is recommended that the City Council, serving as the Successor Agency to the Arcadia Redevelopment Agency, adopt Resolution No. SA-20 (Attachment No. 1) approving and adopting a Recognized Obligation Payment Schedule (“ROPS”) for the period of July 1, 2022, through June 30, 2023; and adopt Resolution No. SA-21 (Attachment No. 2) approving and adopting a Last and Final Recognized Obligation Payment Schedule (“ROPS”) for the period of July 1, 2022 through December 31, 2026. BACKGROUND Following the dissolution of Redevelopment in 2012, the City of Arcadia chose to become the Successor Agency to the Arcadia Redevelopment Agency. For each fiscal year, the City must prepare a ROPS, which 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 Successor Agency. The Successor Agency has previously approved ROPS documents that have covered February 1, 2012, through June 30, 2022. All previous ROPS documents were approved by the local Oversight Board, and the State Department of Finance (“DOF”). Funds received have successfully paid all obligations of the Successor Agency to date. In lieu of an annual ROPS, the Successor Agency is eligible this year to adopt a Last and Final ROPS now that it meets the following four requirements: 1. The Agency has received a Finding of Completion from the State Department of Finance (included as Attachment No. 3 to this report); 2. The only remaining Agency expenditures are administrative costs and debt service payments; 3. All remaining Agency expenditures have been included on previously approved ROPS documents; and 4. The Agency is not a party to any pending litigation. Approval of a Last and Final ROPS will set forth the debts and payment obligations of the Successor Agency through the first half of the 2026-27 Fiscal Year when the final bond series payment is scheduled to be made. By adopting a Last and Final ROPS, the Agency will no longer have to approve an annual ROPS each year. However, for Fiscal Year 2022-23, the Successor Agency is required to approve a separate ROPS (“ROPS 22-23”) to ensure adequate funding is in place to pay all Agency costs in the event there is a delay in the DOF’s final approval of the Last and Final ROPS. Following approval by the Arcadia Successor Agency, the ROPS 22-23 and the Last and Final ROPS will be presented to the Fifth District Consolidated Oversight Board on January 13, 2022. Following Oversight Successor Agency Resolution No. SA-20 & SA-21 Recognized Obligation Payment Schedule (“ROPS”) December 21, 2021 Page 3 of 4 Board approval, both ROPS documents will be submitted to the Department of Finance for final review and approval. DISCUSSION The ROPS 22-23 covers the period of July 1, 2022, through June 30, 2023. Expenditures consist of Redevelopment Agency bond payments, bond disclosure and auditing professional services, and ongoing administrative expenses (listed as administrative overhead). A complete list of the ROPS 22-23 expenditures is included as Exhibit “A” to Attachment No. 1. The Last and Final ROPS also begins July 1, 2022, but extends through December 31, 2026, when the final bond service payment is scheduled to be made. Similar to the ROPS 22-23, the obligations listed in the Last and Final ROPS consist of Redevelopment Agency bond payments, bond disclosure and auditing professional services, and ongoing administrative expenses (listed as administrative overhead). The Last and Final ROPS expenditures for Fiscal Year 2022-23 are identical to those listed in the ROPS 22-23. For subsequent years, bond payment amounts are listed in accordance with the approved bond repayment schedule. Administrative costs as well as expenditures for bond disclosure and auditing are increased incrementally starting in Fiscal Year 2024-25 to account for anticipated inflationary increases. A complete list of the Last and Final ROPS expenditures through December 2026 is included as Exhibit “A” to Attachment No. 2. Following Successor Agency approval, the ROPS 22-23 and the Last and Final ROPS will be presented to the Fifth District Consolidated Oversight Board at their January 13, 2022, meeting. Once approved by the Oversight Board, the ROPS 22-23 and the Last and Final ROPS will be forwarded to the State Department of Finance, the State Controller, and the LA County Auditor-Controller, and posted on the City’s website, prior to the February 1, 2022, deadline. The State Department of Finance then has 100 days to review the Last and Final ROPS and communicate a determination to the City. Following approval of the Last and Final ROPS by the DOF, the Successor Agency will no longer be required to adopt a ROPS annually. After the final bond payment is made in September 2026, the last remaining Agency action in the unwinding of Redevelopment will be to adopt a resolution formally dissolving the Arcadia Successor Agency. ENVIRONMENTAL ANALYSIS The ROPS is exempt from the California Environmental Quality Act under Section 15061(b)(3) because it is considered to be “not a project.” Successor Agency Resolution No. SA-20 & SA-21 Recognized Obligation Payment Schedule (“ROPS”) December 21, 2021 Page 4 of 4 FISCAL IMPACT The proposed ROPS 22-23 calls for $187,902 in funding for the period of July 1, 2022, through June 30, 2023. The proposed Last and Final ROPS calls for $9,966,426 in funding for the period of July 1, 2022, through December 31, 2026, consisting of $9,883,026 in bond payments, $63,900 in bond and auditing professional services, and $19,500 in administrative costs. The expenditures in the Last and Final ROPS for Fiscal Year 2022-23 are identical to those listed in the ROPS 22-23. The Los Angeles County Auditor-Controller will forward funds based on the adopted ROPS to pay all the Successor Agency’s continuing obligations. For Fiscal Year 2022-23, the Agency will receive funds based on either the Last and Final ROPS if it has been approved by the DOF, or the ROPS 22-23 if DOF approval is still pending. However, this will not affect the total funding received for Fiscal Year 2022-23 or any subsequent years. If the ROPS 22-23 and/or Last and Final ROPS are not approved by the Successor Agency and submitted to the Oversight Board and DOF, the General Fund would be the source to pay for these costs. RECOMMENDATION It is recommended that the City Council, as the Successor Agency to the Arcadia Redevelopment Agency, determine that this action does not constitute a project and is therefore, exempt under the California Environmental Quality Act (“CEQA”), and take the following actions: 1. Adopt Resolution No. SA-20 (Attachment No. 1) approving and adopting a Recognized Obligation Payment Schedule (“ROPS”) for the period of July 1, 2022, through June 30, 2023; and 2. Adopt Resolution No. SA-21 (Attachment 2) approving and adopting a Last and Final Recognized Obligation Payment Schedule (“ROPS”) for the period of July 1, 2022, through December 31, 2026, pursuant to Health and Safety Code Section 34177(m). Attachment No. 1: Successor Agency Resolution No. SA-20 Attachment No. 2: Successor Agency Resolution No. SA-21 Attachment No. 3: Successor Agency Finding of Completion RESOLUTION NO. S.A. -20 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 OF JULY 1, 2022, THROUGH JUNE 30, 2023, PURSUANT TO HEAL TH 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), 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 HOPS 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 Audi tor-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 WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred. 1 8+),1) #-+5/41@-, *21/):154!)?3-4:$+0-,;2-"# !$" # !$-:)12 ;2? :085;/0;4- ! 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'+A 669-+=398 98.< /8=;+6 " Exhibit "A" RESOLUTION NO. S.A. -21 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARCADIA, CALIFORNIA, AS THE SUCCESSOR AGENCY TO THE ARCADIA REDEVELOPMENT AGENCY, APPROVING AND ADOPTING A LAST AND FINAL RECOGNIZED OBLIGATION PAYMENT SCHEDULE (''ROPS") FOR THE PERIOD OF JULY 1, 2022, THROUGH DECEMBER 31, 2026, PURSUANT TO HEAL TH 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), 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 34191.6(a), states that a Successor Agency that has received a Finding of Completion may file a Last and Final ROPS once the only remaining Agency expenditures are administrative costs and debt service payments, all remaining Agency costs are items that have been approved on prior ROPS, and an Agency is not a party to any pending litigation; and WHEREAS, the Successor Agency to the Arcadia Redevelopment Agency now meets all of the requirements to submit a Last and Final ROPS; and WHEREAS, Health and Safety Code Section 34177 requires the Successor Agency to submit the Last and Final ROPS to the Oversight Board for approval; and 1 "/;38. >5B/-/6,/; $!"%"/;38. >7.%8>;-/<%3A87=2 &8=+587. 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