MEETING DATE:
SEPTEMBER 23, 2014
SUBJECT:
Title
RESOLUTION NO. SA 2014-012 - RECOGNIZED OBLIGATION PAYMENT SCHEDULE
Body
Recommendation
Recommendation
As the Successor Agency to the former San Marcos Redevelopment Agency, staff recommends the adoption of the attached resolution approving the Recognized Obligation Payment Schedule (ROPS 14.15B) for the required filing period of January 1 through June 30, 2015 as required by AB X1 26 and AB 1484.
Body
Board or Commission Action
Not Applicable
Relevant Council Strategic Theme
Planning for the Future
Relevant Department Goal
Not Applicable
Introduction
On December 29, 2011, the California Supreme Court issued its direction in the California Redevelopment Association v. Matosantos case. The Supreme Court found that ABX1 26, the Dissolution Act was constitutional. Consistent with AB X1 26, on January 10, 2012, the City Council adopted a resolution electing to become the Successor Agency to the former San Marcos Redevelopment Agency. In addition, the City Council elected to serve as the Successor Agency to retain the housing assets and functions to the extent allowed under ABX1 26. Under the Dissolution Act, the San Marcos Redevelopment Agency was dissolved on February 1, 2012.
In late June of 2012, the state legislature passed AB 1484, redevelopment dissolution clean up legislation which implemented new and accelerated deadlines among other provisions.
The established Oversight Board, which supervises the activities of the Successor Agency with respect to the dissolution of the former redevelopment agencies affairs, is scheduled to consider the ROPS after the approval of the Successor Agency. The ROPS approved by the Oversight Board will be forwarded to the Department of Finance, State Auditor Controller and the county auditor - controller.
Discussion
The preliminary ROPS projects payments for each enforceable obligation from January 1, 2015 through June 30, 2015. Under modified timelines established by AB 1484, the Successor Agency must submit an approved ROPS by October 3, 2014 to the Department of Finance, State Auditor Controller and the County Auditor Controller. Should the Successor Agency fail to submit the ROPS by the March deadline, AB 1484 provides that the Successor Agency is subject to $10,000 a day penalty for each day the ROPS is delinquent.
ROPS are required to be prepared twice a year, each covering a six month period. The Successor Agency is responsible for operation of the former Redevelopment Agency's programs (within the limits of the statute) and dissolution of its assets. Henceforth, the only payments that may be made from former Redevelopment Agency resources, including incoming tax increment, are those shown on the ROPS.
The ROPS sets forth the payment amounts, source of funds and due dates of payments required by enforceable obligations for each six-month fiscal period. Enforceable obligations include:
· Bonds;
· Loans borrowed by an Agency;
· Payments required by federal or state government or for employee pension obligations;
· Judgments or settlements;
· "Any legally binding and enforcement agreement or contract that is not otherwise void as violating the debt limit or public policy"; and
· Contract for administration or operation of the Agency.
The ROPS is generally consistent in recognizing existing obligations of the former Redevelopment Agency as expenditures to be made for the fiscal year relative to the respective ROPS period. These include:
· Recognition of existing enforceable obligations (contracts, OPA's, DDA's, etc);
· SERAF loan repayments;
· Administrative costs and support for former Redevelopment Agency operations in accordance with the budget for FY2014-15;
· Allowance for debt service payments that will be made and repaid in accordance with Trust Indentures; and
· Reservations for expenditures of bond proceeds for capital projects.
The process of dissolving the former Redevelopment Agency has been changing constantly. The ROPS has the most up to date information and numbers available to ensure as much accuracy as possible. The attached ROPS reflects the most accurate costs associated with the dissolution available to staff as this time.
Staff recommends that the Successor Agency Board approve the ROPS. Additionally, because the DOF has only recently modified its ROPS form and is expected to issue guidance or direction that may affect what information is contained on the ROPS and/or how it is described, staff recommends that the Successor Agency authorize staff to amend or adjust the information on the form based on such additional guidance, direction or information that may come to light prior to the submission of the amended ROPS to the Oversight Board and/or to DOF and all other applicable agencies, to ensure the submission of a complete and accurate ROPS.
Fiscal Impact
There is no fiscal impact associated with adopting the ROPS as this action is intended to avoid a possible default on enforceable obligations and to ensure that all enforceable obligations are included on the ROPS. The County Auditor-Controller will allocate the property tax increment to successor agencies to pay obligations listed on the approved ROPS.
Failure to adopt the ROPS could have a fiscal impact through penalties prescribed by AB 1484 and/or loss of reimbursement of administrative expenses.
Attachment(s)
Resolution
Recognized Obligation Payment Schedule
Prepared by: Laura Rocha, Finance Director
Approved by: Jack Griffin, City Manager