HomeMy WebLinkAboutResolution No. OB 16-0025Minutes of the Oversight Board to the Successor Agency
to the Dissolved Downey Redevelopment Agency
September F 15 — Regular Meeting
The Oversight Board to the Successor Agency to the Dissolved Downey Community
Development Commission held a Regular Meeting at 1:30 p.m.,_ September 17, 2015, in the
Council Chamber of the Downey City Hall, 11111 Brookshire Avenue, Downey, California.
PRESENT
Roger C. Brossmer, LA County Sanitation Districts #2 & #18
Ali Delawalla, Community Colleges
Jessica Flores, Downey Employee Association
Donald LaPlante, Downey Unified School District - Chair
Aldo Schindler, Community Development Director - Vice -Chair
Frederick W. Latham, LA County Board of Supervisors, District 4
Stephen W. Helvey, to County Board of Supervisors, District 4
3. PLEDGE OF ALLEGIANCE
The Flag Salute was led by Board Member Schindler.
OUT
Chair LaPlante opened Public Comment. Having no one come forward, Public Comment was
closed.
5. APPROVED THE MINUTES OF THE OVERSIGHT BOARD FOR THE SPECIAL MEETING OF
FEBRUARY 25, 2015: Secretary.
It was moved by Vice -Chair Schindler, seconded by Board Member Flores, and carried 4, 0, 3,
with Board Members Latham and Brossmer abstaining, and Board Member Helvey excused, to
approve the Minutes.
6._ ADOPTED RESOLUTION NO. OB 15 -0023, A RESOLUTION OF THE OVERSIGHT BOARD
OF THE DOWNEY SUCCESSOR AGENCY APPROVING RESTATED AND AMENDED LOAN
AGREEMENTS BETWEEN THE CITY OF DOWNEY AND THE DOWNEY SUCCESSOR
AGENCY: Community Development.
Mr. Velasco advised this item is regarding the agreement between the City and Redevelopment
Agency in 2010. Staff is recommending the Oversight Board review and approve the resolution
establishing the agreement. In June 2010, the Redevelopment Commission entered into a
participation agreement with Champion Dodge and committed to providing financial support for
the expansion of the existing dealership and the addition of two dealerships. This agreement is
currently listed on the Oversight Board ROPS as an OPA line item. As a companion to that
transaction, the City entered into -a Cooperation Agreement with the Community Development
Commission in June 2010, and under that agreement the City committed to loaning or providing
sales tax revenues to the Commission and that agreement spelled out the initiation of terms.
With the amendment of AB 1484, the Successor Agency is requesting to reinstate this
agreement between the City and Successor Agency. Under AB 1484 this is permitted provided
the Successor Agency has a Finding of Completion approved by the Department of Finance
(DOF) and approved by the Oversight Board. The reinstated agreement before the Board meets
Oversight Board Minutes — September 17, 2015 1 -
the requirements of AB 1484, and adjust the interest rate, payment terms, and addresses the
20 % of any payment to Downey will be set aside for low -to- moderate income housing.
Board Member Latham confirmed this would fall under the purview of AB 107, and does the City
Manager and City Council know this will never be repaid. Jt is fair to say everyone realizes that
because it is an obligation that is reinstated it will not be paid for 20 -30 years.
Mr. Velasco stated it is a possibility with AB 107. It is a fairly new obligation which came to
staff's attention in the past four months. It is $119,000 in sales tax provided under this
agreement and staff needed to include this for due diligence in that process. Under $11 million
in loan obligations that staff feels will take 20 -25 years, under current requirements, for the City
to receive payment over the long term.
Board Member Brossmer asked if there are any alternatives.
Vice Chair Schindler stated his experience with'ROPS and the Department of Finance is we are
learning as we go along and DOF changes the rules as we go along making it difficult for us to
go through the exercise and place items on the BOPS.
Board Member Latham stated there is a subtle distinction: this item is considered a legitimate
contractual obligation. He asked if it would make sense for the Oversight Board to support this
recommendation and action contingent upon the Successor Agency and City Council approving
a similar companion action. This is a contract the City entered into in 2010 and legitimizing it
with the Oversight Board is meeting its contractual obligation.
Vice -Chair Schindler stated he believes that would be fair; the Successor Agency approved this
item at their last meeting.
Board Member Brossmer expressed his concern on whether the City would ever get paid back.
Board Member Latham made a motion to approve the recommendation with the understanding
that the Successor Agency approves, and if not it returns to the Oversight Board for approval.
Board Member Delawalla inquired if this is the first time this item is coming to the Board and
confirmed it is not in the BOPS. He expressed his concern of this agreement not being identified
previously and not showing up in the audits. Mr. Velasco stated yes, it is the first time it is
coming to the board, and noted it is not in the BOPS, as there was a companion OPA between
the Commission and the property owner. Finance confirmed this has been in existence, but not
on the obligation list. He noted there were no additional agreements.
It was moved by Board Member Latham, seconded by Board Member Flores and approved
5,0,1, to approve Adopt Resolution No. OB 15 -0023, A Resolution of the Oversight Board of the
Downey Successor Agency Approving Restated and Amended Loan Agreements Between the
City of Downey And the Downey Successor Agency.
7. ADOPT RESOLUTIO NO. OB 15 -0024, A RESOLUTION OF THE OVERSIGHT BOARD OF
THE DOWNEY SUCCESSOR AGENCY APPROVING THE RECOGNIZED OBLIGATION
PAYMENT SCHEDULE FOR THE PERIOD OF JANUARY 1, 2016, THROUGH JUNE 30,
2016: Community Development.
Mr. Velasco provided an overview of the Recognized Obligation Payment Schedule (BOPS),
which covers the applicable six month period of January through June 2016. In this RODS, staff
has identified $531,633 in enforceable obligations: a 1997 Tax Allocation Bond payment of
$153,109 and $125,000 for administrative costs as allowed under legislation. In addition, as
identified through the current Finance Department, three new debt obligations, including the
Oversight Board Minutes `= September 17, 2015 - 2 -
previous agenda item. These outstanding obligations total approximately $1,507,861 and are
included in the RODS worksheet as Item Nos. 21, 22, and 23.
The City can qualify pension liabilities for employees on the Commission and that is listed on
the BOPS as an enforceable obligation for $60,256 per fiscal year. Provided within the RODS
15 -16B is the inclusion of the $241,016 which represents four years of unfunded liability
payments to CALPERS.
Regarding Line Item No. 22: Bond Disclosure Report, the Successor Agency is responsible for
complying with reported requirements of the 1997 Tax Allocation Bonds as required by the Bond
Indenture Agreement. Annual disclosure reports are required for each year, however; these
reports have not been prepared for the previous years. In order to maintain compliance with the
requirements, staff will need to procure consultant services to generate the required report. The
cost to prepare the reports is estimated at $50,000 over the remaining 20 year term of the tax
allocation bonds. The ROPS includes $12,500 for the preparation of the disclosure reports for
pending five (5) fiscal years, 2010 through 2015.
Regarding Line Item No. 23: Cooperation Agreement/City Loan, there is no payment included
for this item.
Chair LaPlante asked Mr. Velasco to elaborate on the CALPERS item, and asked if previous
agencies had this approved by DOF. Mr. Velasco stated the City's consultant advised
CALPERS can be an enforceable obligation and the consultant has experience with working
with other agencies.
It was moved by Board Member Brossmer, seconded by Board Member Latham, and approved
6 -0 -1 to Adopt Resolution No. OB 15 -0024, A Resolution of the Oversight Board of the Downey
Successor Agency Approving the Recognized Obligation Payment Schedule for the Period of
January 1, 2016, through June 30, 2016.
r �
Chair LaPlante adjourned the meeting at 1:41 p.m,
ADRIA M. JIMEN , <CMC
Oversight Board S cretry
Oversight Board Minutes — September 17, 2015 - 3
DONALD LAPLkNTE
Oversight Board Chair