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Home My WebLink About06. Adopt Reso Approving ROPS 18-19OVERSIGHT BOARD MEMORANDUM DATE: JANUARY 18, 2018 TO: CHAIR AND MEMBERS OF THE OVERSIGHT BOARD FROM: GILBERT A. LIVAS, Executive Director, Downey Successor Agency SUBJECT: RESOLUTION APPROVING ROPS 18-19 FOR THE PERIOD OF JULY 1, 2018 THROUGH JUNE 30, 2019 RECOMMENDATION That the Oversight Board approve ROPS 18-19 and adopt the following Resolution: A RESOLUTION OF THE OVERSIGHT BOARD TO THE DOWNEY SUCCESSOR AGENCY APPROVING THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR THE PERIOD OF JULY 1, 2018 THROUGH JUNE 30, 2019 BACKGROUND/DISCUSSION The Downey Successor Agency is tasked with winding down the redevelopment affairs of the former Downey Community Development Commission (Commission), including the administrative tasks of preparing the Recognized Obligation Payment Schedules (ROPS) required under Assembly Bill x1 26. Pursuant to Health Safety Code Section 34179.7(o)(1), commencing with the ROPS covering the period from July 1, 2017 to June 30, 2018 and thereafter, agencies are to submit an oversight board approved annual ROPS. The ROPS must be submitted to the Department of Finance (DOF), the State Controller, and the Los Angeles County Auditor-Controller by February 1, 2018. The Successor Agency is requesting approval on $1,901,591 for enforceable obligations due in the applicable one-year period. Below is a brief description of the debt obligations listed in the attached ROPS 18-19. Line Item No. 1, 1997 Tax Allocation Bonds – The ROPS includes two debt payments, in the amount of $505,556 and $126,075 required for the next two scheduled bond payments due August 2018 and January 2019 respectively. The payment obligation was established by the Commission in 1997 when it issued $9,925,000 in Refunding Tax Allocation Bonds to decrease an outstanding balance on its 1990 Bonds and to repay accrued principal and interest on note obligations to the City of Downey. The current balance of the Tax Allocation Bonds is $5,290,000. Line Item No. 3, Bob’s Big Boy Owner Participation Agreement (OPA) – The ROPS includes $25,000 for a payment due in November 2018 to JKBBD Inc. that was recognized as an enforceable obligation by the California Department of Finance. In 2008, the CDC entered into an OPA with JKBBD Inc. to establish a Bob’s Big Boy restaurant franchise at the former Harvey Broilers location. Under this OPA, an annual RESOLUTION APPROVING ROPS JANUARY 18, 2018 PAGE 2 payment of $25,000 will be paid out over the next two years. The current unpaid obligation balance is $50,000. Line Item No. 7, Administrative Costs – The ROPS includes $250,000 for administrative expenses. Per AB x1 26, the Successor Agency is entitled to receive an “administrative allowance” of not more than $250,000 per fiscal year from the Redevelopment Property Tax Trust Funds (RPTTF). These funds will reimburse the Successor Agency and City of Downey for expenses incurred in winding down the business and project functions of the former redevelopment agency. The funds will offset expense accounts for personnel, legal services, and consultant service that will be charged under the City of Downey expense account 10-4-5910. In practice, the Successor Agency is opting to include half of the allowed allocation in each six month ROPS cycle. The expense categories for the Administrative Allowance are reflected in the following table: SUCCESSOR AGENCY ADMINISTRATIVE BUDGET July 1, 2017 through June 30, 2018 Expense Category Expense Allocation Funding Source Personnel Salaries and Benefits $ 190,000.00 Administrative Allowance Legal Services-Retainer $ 50,000.00 Administrative Allowance Contract/Professional Services $ 10,000.00 Administrative Allowance Total Administrative Budget $ 250,000.00 Line Item No. 9, City Loan Agreements – The ROPS includes a $508,897 request for a loan payment towards the outstanding principal on City Loan Agreement No. 25. The Department of Finance has recognized Agreement No. 25 as an enforceable obligation per its letter dated November 8, 2013. The outstanding principal balance on this Agreement as of January 2018 is of $508,897; this payment would wind-down this agreement, subsequently allowing for payments to be made towards Line Item No. 10, City Loan Agreement No. 26. Line Item No. 10, City Loan Agreements – The ROPS includes a $230,485 request for a loan payment towards the outstanding principal on City Loan Agreement No. 26. The Department of Finance has recognized Agreement No. 26 as an enforceable obligation per its letter dated November 8, 2013. The outstanding principal balance on this Agreement as of January 2018 is of $2,236,248. RESOLUTION APPROVING ROPS JANUARY 18, 2018 PAGE 3 The amount requested is 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. Line item 21; CALPERS Unfunded Pension Liabilities - The Successor Agency is responsible for continuing payment to CALPERS for the unfunded pension obligations for Commission employees in service prior to the dissolution of the redevelopment agency. Provided within these ROPS is the inclusion of $253,078 payment for the aforementioned pension obligations. AB x1 26, Section 34171 (d) (1) (C) provides that payments required in connection with employee pension payments or pension obligation debt service are enforceable obligations, with the approval of the Oversight Board and DOF. Line item 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. In order to maintain compliance with disclosure requirements, Staff has procured consultant services to generate the required report. The cost to prepare the reports is projected at $50,000 over the remaining 20 year term of the tax allocation bonds. The ROPS includes $2,500 for the preparation of the disclosure reports for FY 18-19. FISCAL IMPACT Approval of ROPS 17-18 would provide sufficient distribution of RPTTF funding to enable the Downey Successor Agency to fulfill its obligations under AB x1 26. Attachments: “A” – Resolution with ROPS 18-19 OVERSIGHT BOARD RESOLUTION NO. A RESOLUTION OF THE OVERSIGHT BOARD TO THE DOWNEY SUCCESSOR AGENCY APPROVING AN AMENDMENT TO THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR THE PERIOD OF JULY 1, 2018 THROUGH JUNE 30, 2019 WHEREAS, as a result of the passage of Assembly Bill X1 26 from the 2011-12 First Extraordinary Session of the California Legislature (“AB X1 26”), the redevelopment functions of the Downey Community Development Commission (CDC) were dissolved on February 1, 2012; and WHEREAS, pursuant to Assembly Bill 1484 of the 2011-12 Legislative Session (“AB 1484”), the Successor Agency to the dissolved redevelopment functions of the Downey Community Development Commission (“Successor Agency”) is a separate public agency now charged with winding down the CDC’s redevelopment affairs, including making payments due for enforceable obligations (as defined in the Dissolution Act), and perform obligations required pursuant to enforceable obligations; and WHEREAS, pursuant to Senate Bill 107 of the 2015-16 Legislative Session (“SB 107”), an annual Recognized Obligation Payment Schedule (“ROPS”) process was established to replace the previous 6-month cycle, along with other substantive and technical amendments (AB X1 26, AB 1484, SB 107, and all other enactments relating to Parts 1.8 and 1.85 of Division 24 of the Health and Safety Code are collectively referred to as the “Dissolution Law”); and WHEREAS, the Oversight Board to the Successor Agency has been appointed pursuant to the provisions of Health and Safety Code Section 34179; and WHEREAS, pursuant to Health and Safety Code sections 34177 and 34180, the Oversight Board must approve a ROPS for it to become established, valid, and operative for the applicable fiscal period under the Dissolution Law. 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 ROPS 18-19 covering the period of July 1, 2018, through June 30, 2019, 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 provision in the Dissolution Law that applies to the approval by the Oversight Board of the identified ROPS for the identified period. 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. OVERSIGHT BOARD RESOLUTION NO. PAGE 2 SECTION 4. The Secretary shall certify to the adoption of this Resolution. PASSED AND ADOPTED by the Oversight Board at a meeting held on the 18th day of January, 2018. ________________________________ 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 18th of January, 2018. AYES: Board Members: NOES: Board Member: ABSENT: Board Member: ABSTAIN: Board Member: _______________________________ SECRETARY, OVERSIGHT BOARD OVERSIGHT BOARD RESOLUTION NO. PAGE 3 EXHIBIT “A” Recognized Obligation Payment Schedule 2018-19 Successor Agency:Downey County:Los Angeles Current Period Requested Funding for Enforceable Obligations (ROPS Detail) 18-19A Total (July - December) 18-19B Total (January - June) ROPS 18-19 Total A -$ -$ -$ B - - - C - - - D - - - E 1,523,977$ 377,614$ 1,901,591$ F 1,398,977 252,614 1,651,591 G 125,000 125,000 250,000 H Current Period Enforceable Obligations (A+E):1,523,977$ 377,614$ 1,901,591$ Name Title /s/ Signature Date Administrative RPTTF Certification of Oversight Board Chairman: Pursuant to Section 34177 (o) of the Health and Safety code, I hereby certify that the above is a true and accurate Recognized Obligation Payment Schedule for the above named successor agency. Recognized Obligation Payment Schedule (ROPS 18-19) - Summary Filed for the July 1, 2018 through June 30, 2019 Period Enforceable Obligations Funded as Follows (B+C+D): RPTTF Redevelopment Property Tax Trust Fund (RPTTF) (F+G): Bond Proceeds Reserve Balance Other Funds A B C D E F G H I J K L M N O P Q R S T U V W Bond Proceeds Reserve Balance Other Funds RPTTF Admin RPTTF Bond Proceeds Reserve Balance Other Funds RPTTF Admin RPTTF $ 43,561,276 $ 1,901,591 $ - $ - $ - $ 1,398,977 $ 125,000 $ 1,523,977 $ - $ - $ - $ 252,614 $ 125,000 $ 377,614 1 1997 Tax Allocation Bond Bonds Issued On or Before 12/31/10 1/1/1997 6/30/2029 US Bank and Trust Bond Payment to Refund & Defease Debt Prior Obligations 5,290,000 N $ 631,631 505,556 $ 505,556 126,075 $ 126,075 3 Bob's Big Boy / OPA OPA/DDA/Construction 12/9/2009 11/1/2020 JKBBD Historic Preservation / 40 New Jobs 50,000 N $ 25,000 25,000 $ 25,000 $ - 4 Chrysler & Jeep Dealership / OPA OPA/DDA/Construction 6/6/2010 9/1/2022 Champion Dodge, LLC Economic Development / 12 New Jobs - N $ - $ - $ - 5 LA County Deferral Agreement Third-Party Loans 10/13/1997 2/1/2012 Los Angeles County Agreement to Defer Payment of Tax Increment 27,225,057 N $ - $ - $ - 6 The View / DDA OPA/DDA/Construction 11/9/2010 2/5/2068 National Community Renaissance New Construction / 50 Units of Affordable Housing N $ - $ - $ - 7 Administrative Allowance Admin Costs 7/1/2015 6/30/2016 City of Downey Cost Allowance N $ 250,000 125,000 $ 125,000 125,000 $ 125,000 9 City Loan Agreement #25 City/County Loan (Prior 06/28/11), Cash exchange 2/10/1998 1/30/2034 City of Downey Project and Administrative Expenses N $ 508,897 508,897 $ 508,897 $ - 10 City Loan Agreement # 26 City/County Loans On or Before 6/27/11 7/13/1999 1/30/2034 City of Downey Project and Administrative Expenses 2,236,248 N 230,485 230,485 230,485 11 City Loan Agreement # 27 City/County Loans On or Before 6/27/11 6/27/2000 1/30/2034 City of Downey Project and Administrative Expenses 152,472 N 12 City Loan Agreement # 31 City/County Loans On or Before 6/27/11 9/23/2003 1/30/2034 City of Downey Project and Administrative Expenses 203,295 N 13 City Loan Agreement # 33 City/County Loans On or Before 6/27/11 1/25/2005 1/30/2034 City of Downey Project and Administrative Expenses 203,295 N 14 City Loan Agreement # 35 City/County Loans On or Before 6/27/11 1/10/2006 1/30/2034 City of Downey Project and Administrative Expenses 203,295 N 15 City Loan Agreement # 38 City/County Loans On or Before 6/27/11 1/23/2007 1/30/2034 City of Downey Project and Administrative Expenses 152,472 N 16 Public Works Master Agreement City/County Loans On or Before 6/27/11 4/10/2007 1/30/2034 City of Downey Master Agreement for Public Improvements 657,222 N 17 City Aid Master Agreement City/County Loans On or Before 6/27/11 4/10/2007 1/30/2034 City of Downey Master Agreement for Administrative Costs 6,302,151 N 18 City Loan Agreement # 28 City/County Loans On or Before 6/27/11 5/10/2001 1/30/2034 City of Downey Project and Administrative Expenses N $ - $ - $ - 19 City Loan Agreement # 30 City/County Loans On or Before 6/27/11 3/12/2002 1/30/2034 City of Downey Project and Administrative Expenses N $ - $ - $ - 20 City Loan Agreement # 37 City/County Loans On or Before 6/27/11 1/23/2007 1/30/2034 City of Downey Project and Administrative Expenses N $ - $ - $ - 21 CALPERS Unfunded Pension Liabilities Unfunded Liabilities 2/1/1958 6/30/2041 CALPERS Payment of Unfunded Pension Obligations from 2012 to 2016 885,769 N 253,078 126,539 126,539 126,539 126,539 22 Services for 1997 Tax Allocation Bonds Professional Services 8/27/2015 6/30/2029 Harrell & Co. Advisors Preparation of Annual Continuing Disclosure Report for FY 18-19 N $ 2,500 2,500 $ 2,500 $ - 23 City Cooperation Agreement/Loan Agreement City/County Loans On or Before 6/27/11 6/22/2010 9/1/2022 City of Downey OPA Payment Obligation - Champion Dodge LLC N $ - $ - $ - 24 N $ - $ - $ - 25 N $ - $ - $ - Fund Sources Fund Sources Contract/Agreement Termination Date ROPS 18-19 Total 18-19B (January - June) 18-19A Total Downey Recognized Obligation Payment Schedule (ROPS 18-19) - ROPS Detail July 1, 2018 through June 30, 2019 (Report Amounts in Whole Dollars) Item #Payee Description/Project Scope Project Area Total Outstanding Debt or Obligation Retired 18-19A (July - December) 18-19B Total Project Name/Debt Obligation Obligation Type Contract/Agreement Execution Date A B C D E F G H I Other RPTTF Bonds issued on or before 12/31/10 Bonds issued on or after 01/01/11 Prior ROPS period balances and DDR RPTTF balances retained Prior ROPS RPTTF distributed as reserve for future period(s) Rent, grants, interest, etc. Non-Admin and Admin 1 Beginning Available Cash Balance (Actual 07/01/15) 643,250 1,102,795 127,843 19,566 2 Revenue/Income (Actual 06/30/16) RPTTF amounts should tie to the ROPS 15-16 total distribution from the County Auditor-Controller during June 2015 and January 2016. 23,774 1,014,043 3 Expenditures for ROPS 15-16 Enforceable Obligations (Actual 06/30/16) 1,123,036 4 Retention of Available Cash Balance (Actual 06/30/16) RPTTF amount retained should only include the amounts distributed as reserve for future period(s) 5 ROPS 15-16 RPTTF Balances Remaining No entry required 6 Ending Actual Available Cash Balance (06/30/16) C to G = (1 + 2 - 3 - 4), H = (1 + 2 - 3 - 4 + 5) 643,250$ -$ 1,102,795$ 127,843$ 43,340$ (108,993)$ Downey Recognized Obligation Payment Schedule (ROPS 18-19) - Report of Cash Balances July 1, 2015 through June 30, 2016 (Report Amounts in Whole Dollars) Pursuant to Health and Safety Code section 34177 (l), Redevelopment Property Tax Trust Fund (RPTTF) may be listed as a source of payment on the ROPS, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation. For tips on how to complete the Report of Cash Balances Form, see Cash Balance Tips Sheet Fund Sources Comments Bond Proceeds Reserve Balance Cash Balance Information for ROPS 15-16 Actuals (07/01/15 - 06/30/16) Item #Notes/Comments Downey Recognized Obligation Payment Schedule (ROPS 18-19) - Notes July 1, 2018 through June 30, 2019 Item #Notes/Comments Downey Recognized Obligation Payment Schedule (ROPS 18-19) - Notes July 1, 2018 through June 30, 2019