HomeMy WebLinkAboutReso approving rops 14-15A for 7-2014 thru 12-2014OVERSIGHT BOARD MEMORANDUM
DATE: February 27, 2014
TO: CHAIR AND MEMBERS OF THE OVERSIGHT BOARD
FROM: GILBERT A. LIVAS, Executive Director, Downey Successor Agency
SUBJECT: RESOLUTION APPROVING ROPS 14-15A FOR THE PERIOD OF
JULY 1, 2014, THROUGH DECEMBER 31,2014
RECOMMENDATION
That the Oversight Board adopt:
A RESOLUTION OF THE OVERSIGHT BOARD TO THE
DOWNEY SUCCESSOR AGENCY APPROVING THE
RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR THE
PERIOD OF JULY 1, 2014, THROUGH DECEMBER 31, 2014
BACKGROUND I DISCUSSION
The Downey Successor Agency is tasked with winding down the redevelopment
affairs of the Downey Community Development Commission (CDC), including the
administrative tasks of preparing the recognized debt payment schedules
required under Assembly Bill 1X26.
Pursuant to the timeline in the Legislation, the ROPS for the next six-month
period must be submitted to the Oversight Board for its review and approval.
The ROPS must also be submitted to the Department of Finance (DOF), the
State Controller, and the Los Angeles County Auditor-Controller by March 3,
2014. This ROPS covers the six-month period of July 1, 2014, through December
31, 2014. Only debt payments listed on an approved ROPS may be paid with
funds available to the Successor Agency from the Redevelopment Property Tax
Trust Fund (RPTTF).
The Successor Agency is requesting approval for $1,387,382 for the applicable
six-month period. Below is a brief description of the debt obligations listed in the
attached ROPS 14-15A
1997 Tax Allocation Bonds-The ROPS includes $470,218 for the next bond
payment which is due in July.
In 1997, the CDC issued $9,925,000 in Refunding Tax Allocation Bonds to
defease outstanding balance on the 1990 Bonds and to repay accrued
Chair and Members of the Oversight Board
Resolution Approving the Recognized Obligation
Payment Schedule (ROPS)
February 27, 2014
Page 2
principal and interest on note obligations to the City of Downey. The
balance outstanding as of June 30, 2013 is $6,890,000.
Development Agreements-The ROPS includes $203,026 for obligations
payment due on two outstanding development agreements which are recognized
by the California Department of Finance. These include the following:
• Bob's Big Boy OPA-Under this OPA a $25,000 payment is due in
November 2014.
In 2008, the CDC entered into an Owner Participation Agreement
(OPA) to establish a restaurant franchise at the former Harvey
Broilers location. Under this OPA there is an unpaid obligation
balance of $150,000, with terms that will provide up to $25,000
annually in financial assistance, over the next six years.
• Champion Dodge/Chrysler/Jeep Dealership -An estimated
$178,026 is required for this development agreement. This Owner
Participation Agreement (OPA) was instrumental in bringing a new
Chrysler and Jeep franchise lines to the City. Under the OPA, an
obligation of $500,000 was encumbered to the project. The current
balance of the debt obligation is $296,519.
Administrative Costs-The ROPS includes $125,000 to offset administrative
expenses incurred by the Successor Agency.
Per AB 1X26, the Successor Agency may receive an "administrative
allowance" for administrative expenses incurred by the Successor Agency
during the six-month period. The maximum reimbursement amount per
fiscal year is $250,000.
City Loan Agreements -The ROPS includes a $589,138 payment to reduce
the outstanding balance on Operative Agreement No 25. The outstanding
balance on this Agreement is $1,600,000. The amount of the payment
was based on a worksheet developed by the Department of Finance and
is compliant with the formula outlined in HSC section 34191.4(b)(2), which
limits the amount of RPTTF funds available for repayment of loan
agreements between the Successor Agency and the City of Downey. The
Department of Finance has recognized Agreement No. 25 as an
enforceable obligation under its letter dated November 8, 2013.
Attachments: "A" -Resolution
ROPS 14-15A
"B"-DOF Letter dated November 18, 2013
OVERSIGHT BOARD RESOLUTION NO. __
A RESOLUTION OF THE OVERSIGHT BOARD TO THE DOWNEY
SUCCESSOR AGENCY APPROVING THE RECOGNIZED OBLIGATION
PAYMENT SCHEDULE FOR THE PERIOD JULY 1, 2014 THROUGH
DECEMBER 31, 2014
WHEREAS, as a result of the passage of Assembly Bill 26 from the 2011-12 First
Extraordinary Session of the California Legislature ("ABx1 26" or the "Dissolution Act"),
the City of Downey redevelopment agency ("RDA") was dissolved on February 1, 2012;
and
WHEREAS, pursuant to Assembly Bill1484 of the 2011-12 Legislative Session
("AB 1484"), the Downey Successor Agency for the former RDA ("Successor Agency")
is a separate public agency now charged with winding down the RDA's affairs, including
making payments due for enforceable obligations (as defined in the Dissolution Act},
and perform obligations required pursuant to enforceable obligations; and
WHEREAS, the Oversight Board to the Successor Agency to the dissolved
redevelopment agency functions of the Downey Community Development Commission
has been appointed pursuant to the provisions of Health & Safety Code Section 34179;
and
WHEREAS, pursuant to Health and Safety Code sections 34177(1) and 34180(g),
the Oversight Board must approve a Recognized Obligation Payment Schedule for it to
become established, valid, and operative for the applicable six-month fiscal period.
NOW, THEREFORE, BE IT RESOLVED by the Oversight Board as follows:
SECTION 1. The foregoing Recitals are true and correct and are incorporated
herein.
SECTION 2. The Recognized Obligation Payment Schedule ("ROPS") covering
the period of July 1, 2014, through December 31, 2014, attached hereto and
incorporated herein by reference as Exhibit "A", is hereby approved pursuant to Health
and Safety Code Sections 34177 and 34180, and any other law that may apply to the
approval by the Oversight Board of the identified ROPS for the identified periods.
SECTION 3. The Secretary or authorized designee is hereby directed to post
this Resolution and the identified ROPS for the identified periods on the Successor
Agency's website, and to provide a copy of the identified ROPS for the identified periods
to the State Controller's Office, State Department of Finance, and the County Auditor-
Controller.
SECTION 4. The Secretary shall certify to the adoption of this Resolution.
Attachment "A"
PASSED AND ADOPTED by the Oversight Board at a meeting held on the day
of , 2014.
CHAIR, OVERSIGHT BOARD
ATTEST:
SECRETARY, OVERSIGHT BOARD
STATE OF CALIFORNIA
COUNTY OF ) SS
CITY OF )
I, , Secretary to the Oversight Board, hereby certify that the
foregoing resolution was duly adopted at a meeting of the Oversight Board, held on the
___ day of , 2014.
AYES: BOARD MEMBERS:
NOES: BOARD MEMBERS:
ABSENT: BOARD MEMBERS:
SECRETARY, OVERSIGHT BOARD
EXHIBIT"A"
Recognized Obligation Payment Schedule 2014-15A
(Attached)
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Brian Saeki , Chairman Oversight Bo Name ~ Six-Month Total $ $ 1,387,382 1,262,382 125,000 $ 1,387,382 1,387,382 $ 1,387,382 1,387,382 1,387,382 Title --------------------------------------------Signature Date
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le
g
a
l
re
l
a
t
e
d
1s
s
u
e
s
9
Ci
t
y
Lo
a
n
Ag
r
e
e
m
e
n
t
#2
5
Ci
t
y
/
C
o
u
n
t
y
Lo
a
n
s
2/
1
0
1
1
9
9
8
1/
3
0
/
2
0
3
4
Ci
t
y
of
Do
w
n
e
y
Pr
o
J
e
c
t
an
d
Ad
m
r
n
r
s
t
r
a
t
i
v
e
Ex
p
e
n
s
e
s
Do
w
n
e
y
1,
6
0
0
,
0
0
0
N 589,139 589,139
On
or
Be
f
o
r
e
6/
2
7
/
1
1
10
Ci
t
y
Lo
a
n
Ag
r
e
e
m
e
n
t
#
26
C1
t
y
/
C
o
u
n
t
y
Lo
a
n
s
7/
1
3
/
1
9
9
9
1/
3
0
/
2
0
3
4
Ci
t
y
of
Do
w
n
e
y
Pr
o
J
e
c
t
an
d
Ad
m
r
n
r
s
t
r
a
t
r
v
e
Ex
p
e
n
s
e
s
Do
w
n
e
y
2,
2
0
0
,
0
0
0
N
On
or
Be
f
o
r
e
61
2
7
1
1
1
11
C1
t
y
Lo
a
n
Ag
r
e
e
m
e
n
t
#
27
Ci
t
y
/
C
o
u
n
t
y
Lo
a
n
s
6/
2
7
/
2
0
0
0
1/
3
0
/
2
0
3
4
Ci
t
y
of
Do
w
n
e
y
Pr
o
J
e
C
t
an
d
Ad
m
r
n
r
s
t
r
a
t
i
v
e
Ex
p
e
n
s
e
s
Do
w
n
e
y
150,000 N
On
or
Be
f
o
r
e
61
2
7
1
1
1
12
Ci
t
y
Lo
a
n
Ag
r
e
e
m
e
n
t
#
31
Ci
t
y
/
C
o
u
n
t
y
Lo
a
n
s
9/
2
3
/
2
0
0
3
11
3
0
/
2
0
3
4
Ci
t
y
of
Do
w
n
e
y
Pr
o
j
e
c
t
an
d
Ad
m
r
n
r
s
t
r
a
t
i
v
e
Ex
p
e
n
s
e
s
Do
w
n
e
y
200,000 N
On
or
Be
f
o
r
e
61
2
7
1
1
1
13
C1
t
y
Lo
a
n
Ag
r
e
e
m
e
n
t
#
33
C1
t
y
/
C
o
u
n
t
y
Lo
a
n
s
1/
2
5
/
2
0
0
5
1/
3
0
/
2
0
3
4
Ci
t
y
of
Do
w
n
e
y
Pr
o
J
e
c
t
an
d
Ad
m
i
n
i
s
t
r
a
t
i
v
e
Ex
p
e
n
s
e
s
Do
w
n
e
y
200,000 N
On
or
Be
f
o
r
e
6/
2
7
1
1
1
14
Ci
t
y
Lo
a
n
Ag
r
e
e
m
e
n
t
#
35
C1
t
y
/
C
o
u
n
t
y
Lo
a
n
s
1/
1
0
/
2
0
0
6
1/
3
0
/
2
0
3
4
Ci
t
y
of
Do
w
n
e
y
Pr
o
J
e
c
t
an
d
Ad
m
i
n
i
s
t
r
a
t
i
v
e
Ex
p
e
n
s
e
s
Do
w
n
e
y
200,000 N
On
or
Be
f
o
r
e
6/
2
7
1
1
1
15
C1
t
y
Lo
a
n
Ag
r
e
e
m
e
n
t
#
38
C1
t
y
/
C
o
u
n
t
y
Lo
a
n
s
1/
2
3
1
2
0
0
7
1/
3
0
/
2
0
3
4
C1
t
y
of
Do
w
n
e
y
Pr
o
j
e
c
t
an
d
Ad
m
i
n
i
s
t
r
a
t
i
v
e
Ex
p
e
n
s
e
s
Do
w
n
e
y
150,000 N
On
or
Be
f
o
r
e
6/
2
7
1
1
1
16
Pu
b
l
i
c
Wo
r
k
s
Ma
s
t
e
r
Ag
r
e
e
m
e
n
t
Ci
t
y
/
C
o
u
n
t
y
Lo
a
n
s
4/
1
0
/
2
0
0
7
1/
3
0
/
2
0
3
4
Ci
t
y
of
Do
w
n
e
y
Ma
s
t
e
r
Ag
r
e
e
m
e
n
t
lo
r
Pu
b
l
i
c
Do
w
n
e
y
646,570 N
On
or
Be
f
o
r
e
6/
2
7
/
1
1
Im
p
r
o
v
e
m
e
n
t
s
17
C1
t
y
Ai
d
Ma
s
t
e
r
Ag
r
e
e
m
e
n
t
Ci
t
y
/
C
o
u
n
t
y
Lo
a
n
s
4/
1
0
/
2
0
0
7
1/
3
0
/
2
0
3
4
C1
t
y
of
Do
w
n
e
y
Ma
s
t
e
r
Ag
r
e
e
m
e
n
t
lo
r
Ad
m
i
n
i
s
t
r
a
t
i
v
e
Do
w
n
e
y
4,
4
0
0
,
0
0
0
N
On
or
Be
f
o
r
e
61
2
7
/
1
1
Co
s
t
s
18
Ci
t
y
Lo
a
n
Ag
r
e
e
m
e
n
t
#
28
Ci
t
y
/
C
o
u
n
t
y
Lo
a
n
s
51
1
0
/
2
0
0
1
1/
3
0
/
2
0
3
4
Ci
t
y
of
Do
w
n
e
y
Pr
o
J
e
c
t
an
d
Ad
m
i
n
i
s
t
r
a
t
i
v
e
Ex
p
e
n
s
e
s
Do
w
n
e
y
200,000 N $ -
On
or
Be
f
o
r
e
6/
2
7
1
1
1
19
C1
t
y
Lo
a
n
Ag
r
e
e
m
e
n
t
#
30
Ci
t
y
/
C
o
u
n
t
y
Lo
a
n
s
31
1
2
1
2
0
0
2
1/
3
0
/
2
0
3
4
Ci
t
y
of
Do
w
n
e
y
Pr
o
j
e
c
t
an
d
Ad
m
i
n
i
s
t
r
a
t
r
v
e
Ex
p
e
n
s
e
s
Do
w
n
e
y
300,000 N $
On
or
Be
f
o
r
e
6/
2
7
/
1
1
Re
c
o
g
n
i
z
e
d
Ob
l
i
g
a
t
i
o
n
Pa
y
m
e
n
t
Sc
h
e
d
u
l
e
(R
O
P
S
)
14
-
1
5
A
-
Re
p
o
r
t
of Cash Balances
(R
e
p
o
r
t
Am
o
u
n
t
s
in
Wh
o
l
e
Do
l
l
a
r
s
)
Pu
r
s
u
a
n
t
to
He
a
l
t
h
an
d
Sa
f
e
t
y
Co
d
e
se
c
t
i
o
n
34
1
7
7
(
1
)
,
Re
d
e
v
e
l
o
p
m
e
n
t
Pr
o
p
e
r
t
y
Ta
x
Tr
u
s
t
Fu
n
d
(R
P
T
I
F
)
ma
y
be
li
s
t
e
d
as
a
so
u
r
c
e
of
pa
y
m
e
n
t
on
th
e
RO
P
S
,
but only to the extent no other funding source is available or when payment from property
ta
x
re
v
e
n
u
e
s
is
re
q
u
i
r
e
d
by
an
en
f
o
r
c
e
a
b
l
e
ob
l
i
g
a
t
i
o
n
.
A
B
c
D
E
F
G H I
Fu
n
d
So
u
r
c
e
s
Bo
n
d
Pr
o
c
e
e
d
s
Re
s
e
r
v
e
Ba
l
a
n
c
e
Other RPTIF
Pr
i
o
r
RO
P
S
RP
T
I
F
Bo
n
d
s
Is
s
u
e
d
Bo
n
d
s
Is
s
u
e
d
Pr
i
o
r
RO
P
S
pe
r
i
o
d
di
s
t
r
i
b
u
t
e
d
as
Rent,
on
or
be
f
o
r
e
on
or
af
t
e
r
ba
l
a
n
c
e
s
an
d
DD
R
re
s
e
r
v
e
fo
r
ne
x
t
Grants, Non-Admin and
Ca
s
h
Ba
l
a
n
c
e
In
f
o
r
m
a
t
i
o
n
by
RO
P
S
Pe
r
i
o
d
12
/
3
1
/
1
0
01
/
0
1
/
1
1
ba
l
a
n
c
e
s
re
t
a
i
n
e
d
bo
n
d
pa
y
m
e
n
t
Interest, Etc. Admin Comments
RO
P
S
13
-
1
4
A
Ac
t
u
a
l
s
(0
7
/
0
1
/
1
3
-
12
/
3
1
/
1
3
)
1
Be
g
i
n
n
i
n
g
Av
a
i
l
a
b
l
e
Ca
s
h
Ba
l
a
n
c
e
(A
c
t
u
a
l
07
/
0
1
/
1
3
)
No
t
e
th
a
t
fo
r
th
e
RP
T
I
F
,
1
+
2
sh
o
u
l
d
ti
e
to
co
l
u
m
n
s
J
an
d
0
in
th
e
Re
p
o
r
t
of
Pr
i
o
r
Pe
r
i
o
d
Ad
j
u
s
t
m
e
n
t
s
(P
P
A
s
)
-
2
Re
v
e
n
u
e
/
I
n
c
o
m
e
(A
c
t
u
a
l
1
2
/
3
1
/
1
3
)
No
t
e
th
a
t
th
e
RP
T
I
F
am
o
u
n
t
s
sh
o
u
l
d
ti
e
to
th
e
RO
P
S
13
-
1
4
A
di
s
t
r
i
b
u
t
i
o
n
fr
o
m
th
e
Co
u
n
t
y
Au
d
i
t
o
r
-
C
o
n
t
r
o
l
l
e
r
du
r
i
n
g
Ju
n
e
20
1
3
145,155
3
Ex
p
e
n
d
i
t
u
r
e
s
fo
r
RO
P
S
13
-
1
4
A
En
f
o
r
c
e
a
b
l
e
Ob
l
i
g
a
t
i
o
n
s
(A
c
t
u
a
l
12
/
3
1
/
1
3
)
No
t
e
th
a
t
fo
r
th
e
RP
T
I
F
,
3
+
4
sh
o
u
l
d
ti
e
to
co
l
u
m
n
s
La
n
d
Q
in
th
e
Re
p
o
r
t
of
PP
A
s
755,570
4
Re
t
e
n
t
i
o
n
o
f
Av
a
i
l
a
b
l
e
Ca
s
h
Ba
l
a
n
c
e
(A
c
t
u
a
l
1
2
/
3
1
/
1
3
)
No
t
e
th
a
t
th
e
RP
T
I
F
am
o
u
n
t
sh
o
u
l
d
on
l
y
in
c
l
u
d
e
th
e
re
t
e
n
t
i
o
n
of
re
s
e
r
v
e
s
fo
r
de
b
t
se
r
v
i
c
e
ap
p
r
o
v
e
d
in
RO
P
S
13
-
1
4
A
5
RO
P
S
13
-
1
4
A
RP
T
I
F
Pr
i
o
r
Pe
r
i
o
d
Ad
j
u
s
t
m
e
n
t
No
t
e
th
a
t
th
e
RP
T
I
F
am
o
u
n
t
sh
o
u
l
d
ti
e
to
co
l
u
m
n
S
in
th
e
Re
p
o
r
t
of
No
en
t
r
y
re
q
u
i
r
e
d
PP
A
s
.
-
6
En
d
i
n
g
Ac
t
u
a
l
Av
a
i
l
a
b
l
e
Ca
s
h
Ba
l
a
n
c
e
C
to
G
= (1
+
2
-
3
-
4)
,
H
= (1
+
2
-
3
-
4
-
5)
$
-
$
-
$
-
$
-
$ -$ (610,415)
RO
P
S
13
-
1
4
B
Es
t
i
m
a
t
e
(0
1
/
0
1
/
1
4
-
06
/
3
0
/
1
4
)
7
Be
g
i
n
n
i
n
g
Av
a
i
l
a
b
l
e
Ca
s
h
Ba
l
a
n
c
e
(A
c
t
u
a
l
01
/
0
1
/
1
4
)
{C
,
D,
E,
G
= 4
+
6,
F
= H4
+
F4
+
F6
,
an
d
H
= 5
+
6)
$
-
$
-
$
-
$
-
$ -$ (610,4151
8
Re
v
e
n
u
e
/
I
n
c
o
m
e
(E
s
t
i
m
a
t
e
06
/
3
0
/
1
4
)
No
t
e
th
a
t
th
e
RP
T
I
F
am
o
u
n
t
s
sh
o
u
l
d
ti
e
to
th
e
RO
P
S
13
-
1
4
B
di
s
t
r
i
b
u
t
i
o
n
fr
o
m
th
e
Co
u
n
t
y
Au
d
i
t
o
r
-
C
o
n
t
r
o
l
l
e
r
du
r
i
n
g
Ja
n
u
a
r
y
20
1
4
590,464
9
Ex
p
e
n
d
i
t
u
r
e
s
fo
r
13
-
1
4
B
En
f
o
r
c
e
a
b
l
e
Ob
l
i
g
a
t
i
o
n
s
(E
s
t
i
m
a
t
e
06
/
3
0
/
1
4
)
294,125
10
Re
t
e
n
t
i
o
n
o
f
Av
a
i
l
a
b
l
e
Ca
s
h
Ba
l
a
n
c
e
(E
s
t
i
m
a
t
e
06
/
3
0
/
1
4
)
No
t
e
th
a
t
th
e
RP
T
I
F
am
o
u
n
t
s
ma
y
in
c
l
u
d
e
th
e
re
t
e
n
t
i
o
n
of
re
s
e
r
v
e
s
fo
r
de
b
t
se
r
v
i
c
e
ap
p
r
o
v
e
d
in
RO
P
S
13
-
1
4
B
11
En
d
i
n
g
Es
t
i
m
a
t
e
d
Av
a
i
l
a
b
l
e
Ca
s
h
Ba
l
a
n
c
e
(7
+
8
-
9
-1
0
)
$
$
$
$ $ (314,0761
$
-
-
-
-
-I I I I
Re
c
o
g
n
i
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November 8, 2013
Mr. Edward Velasco, Housing Manager
City of Downey
11111 Brookshire Avenue
Downey, CA 90241
Dear Mr. Velasco:
Subject: Approval of Oversight Board Action
The City of Downey Successor Agency (Agency) notified the California Department of Finance
(Finance) of its September 19, 2013 Oversight Board (OB) resolution on September 26, 2013
Pursuant to Health and Safety Code (HSC) section 34179 (h), Finance has completed its review
of the OB action.
Based on our review and application of the law, 08 Resolution 13-0016 is approved. It is our
understanding the resolution approves the reinstatement of twelve loan agreements between
the City of Downey and the Agency. In addition, the OB makes findings that the loans were for
legitimate redevelopment purposes. It is also our understanding the Agency received a Finding
of Completion from Finance on May 15, 2013.
Although these loans are considered enforceable obligations, the loan repayments are subject
to the formula outlined in HSC section 34191.4 (b) (2) which limits repayment amounts in each
fiscal year to one-half of the increase between the ROPS residual amounts distributed to the
taxing entities in that fiscal year and the ROPS residual amounts distributed to the taxing
entities in the 2012-13 base year.
In addition, HSC section 34191.4 (b) (2) requires the interest be calculated from loan origination
at the Local Agency Investment Fund (LAIF) rate. The accumulated interest on the loan should
be recalculated from the date of loan origination using the quarterly LAIF interest rate at the time
when the Agency's 08 makes a finding that the City loan was for legitimate redevelopment
purposes. This will supersede any existing interest rates in the loan agreement. The
repayments of these loans are subject to Finance's review on a future Recognized Obligation
Payment Schedule.
Finance notes that ten of the twelve loan agreements allow for the repayment to be made with
proceeds of tax allocation bonds that the Agency may have issued for the same purpose. HSC
section 34177 (I) (1) allows Redevelopment Property Tax Trust Fund (RPTTF) to be used for
enforceable obligations, but only to the extent no other funding sources are available.
Therefore, to the extent bond proceeds exist that can be used to repay these loans, the bond
proceeds should be exhausted before requesting RPTTF.
Attachment "8"
Mr. Edward Velasco
November 8, 2013
Page 2
Please direct inquiries to Kylie Le, Supervisor, or Michael Barr, Lead Analyst at (916) 445-1546.
Sincerely,
Assistant Program Budget Manager
cc: Mr. Brian Saeki, Director of Community Development, City of Downey
Ms. Kristina Burns, Manager, Los Angeles County Department of Auditor-Controller
California State Controller's Office