HomeMy WebLinkAbout04 FIRST AMENDED AGREEMENTAgenda Item 4
AGENDA REPORT
Oversight Board of the Successor Agency of the
Tustin Community Redevelopment Agency
MEETING DATE: APRIL 10, 2012
SUBJECT/ACTION: REVIEW AND AUTHORIZATION FOR SUCCESSOR
AGENCY PROPOSED ACTION TO ENTER INTO A FIRST
AMENDED AGREEMENT BETWEEN THE CITY AND
SUCCESSOR AGENCY FOR ADMINISTRATIVE
SUPPORT PURSUANT TO HEALTH AND SAFETY CODE
SECTION 34171 FOR FISCAL YEAR 2012-13 AND ALSO
PROPOSED ACTION BY SUCCESSOR AGENCY
TO APPROVE AN ADMINISTRATIVE BUDGET PURSUANT
TO HEALTH AND SAFETY CODE SECTION 341770) FOR
THE PERIOD FROM JULY 1, 2012 THROUGH
DECEMBER 31, 2012
RECOMMENDATION / PROPOSED ACTION
1. Approve proposed Successor Agency action to adopt a proposed Administrative
Budget pursuant to CRL Section 341770) for the period from July 1, 2012 through
December 31, 2012.
2. Approve proposed Successor Agency action to enter into a First Amended
Agreement with the City for reimbursement of costs incurred by City to support
Successor Agency operations and obligations for fiscal year 2012-13. The
Successor Agency shall also be authorized to enter into any agreements necessary
to provide administrative support services as identified in the Administrative Budget,
including vendor services.
(Note: The above actions by the Oversight Board (Board) shall not become effective for
three business days, pending any request for review by the DoF. If DoF requests review
of this Board action, it shall have 10 days from the date of its request to approve the
Board action or return it to the Board for reconsideration and the action, if subject to
review by DoF, shall not be effective until approved by DoF).
BACKGROUND AND DISCUSSION
Health and Safety Code Section 341770), as modified by the Supreme Court's opinion in
the matter of California Redevelopment Association, et al. v. Matosantos, et al., Case No.
S194861, requires the Successor Agency to prepare a proposed administrative budget for
Agenda Report
April 10, 2012
Page 2
upcoming six month periods and submit it to the Oversight Board for approval. According
to the Health and Safety Code Section 341770), the administrative budget is to include all
of the following: (i) estimated amounts of the Successor Agency's administrative costs for
the up -coming six month fiscal period; (ii) the proposed sources of payment for the costs
identified in (i); and (iii) proposals for arrangements for administrative and operations
services provided by the City, county, city and county, or other entity. Pursuant to Health
and Safety Code Section 34171, the Administrative Budget is for administrative costs of
the Successor Agency and would be in an amount subject to approval of the Oversight
Board, payable from property tax revenues of up to three percent (3%) of property tax
allocated to the Redevelopment Obligation Retirement Fund during fiscal year 2012-13,
which amount shall not be less than Two Hundred Fifty Thousand Dollars ($250,000).
Attached is the proposed Successor Agency Administrative Budget to be submitted to the
Oversight Board of the Successor Agency for approval for the period of July 1, 2012
through December 31, 2012. Under Health and Safety Code 34177(k), the City would then
provide administrative cost estimates, from the approved Administrative Budget, that are to
be paid from property tax revenues deposited into the Redevelopment Property Tax Trust
Fund by the County of Orange Auditor -Controller for the up -coming six month period.
Also subject to Oversight Board approval pursuant to Health and Safety Section 34180 (h),
is a request by a successor agency to enter into an agreement with the City of the former
redevelopment agency that it is succeeding. To ensure provision of the necessary
services from the City to support Successor Agency responsibilities in winding down the
activities of the former redevelopment agency and the proposed administrative budget, it is
necessary that the City and City Successor Agency approve a First Amended Agreement
for reimbursement of costs incurred by City to support Successor Agency operations and
obligations (similar to the Agreement approved by the Oversight Board at its meeting on
March 13, 2012).
Christine Shingleton
Assistant Executive' ctor
Successor Agency fo the Tustin
Community Redevelopment Agency
Pamela Arends-King
Finance Director
Successor Agency for the Tustin
Community Redevelopment Agency
Attachments: 1. Proposed Administrative Budget
2. Proposed City and Successor Agency First Amended Agreement
for Reimbursement of Costs
Administrative Budget
July 1, 2012 through December 13, 2012
MATED REVENUES
Object Position
Percent to TotaIFY-Adminj Julythru Dec2012
4 Administrative Cost Allowance for FY 12/13 1 3/ $ 444,1961 307,3801
E
Object Position Fiscal Year - Total Percent to TotaIFY-Admin July thru Dec 2012
Wages, Benefits and WC:
. Total FY - Admin
Costs
July thru Dec 2012
1
6147
Bank Service Charges
3,000
100%
3,000
1,500
2
6355
Telephone
4,800
100%
4,800
2,400
3
6400
Office Supplies
5,200
100%
5,200
2,600
4
6415
Mail and Postage Service
1,600
100%
1,600
800
5
6420
Printing
9,000
100%
9,000
4,500
6
6710
Meetings (staff)
0
100%
0
0
7
6715
Training Expense
0
100%
0
0
8
6730
Membership/Subscriptions
0
100%
0
0
9
10
6840
6845
Vehicle Mileage
Vehicle Lease Equipment
200
6,800
100%
100%
200
6,800
SDO
3,400
11
6848
IT Support Services
Sub -Total Admin Cost Allowances:
36,500 100%
$ 67,100
ALLOCATION [ATTA
Total During Fiscal
Year 2012 13
36,500
$ 67,100
Total FY - Admin
Costs
18,250
$ 33,550
July thru Dec 2012
1
City Administrative Support Costs
based on Cost Allocation
836,000
15.996
133,196
$ 66,598
CITY ATTORNEY (contract services)
ow
ption of Services
Total During Fiscal
Year 2012/13
Percent to
Admin
Total FY - Admin
Costs
July thru Dec 2012
6017
City Attorney's Office - Woodruff,
Spradlin & Smart (Including: Stradling
Yocca Carlson & Rauth; Remy, Thomas,
Moose & Manley, Waters & Company,
Jeanette Justus). This does not include
legal services from the following firms
that are associated with project costs:
1) Armbruster Goldsmith & Delvac LLP;
2)Cappello and Noel LLP, and 3) Kutak
Rock.
Sub -Total aty Attorney:
$ 200,000
$ 200,000
100,
$ 200,000
$ 100,000
$ 200,000
$ 100,000
INWand Draft ROES)
Object
Code
Description
Total During Fiscal
Year 2012/13
Percent to
Admin
Total FY - Admin
Costs
July thru Dec 2012
1
6315
Lease of Office Space
$ 43,900
100%
$ 43,900
21,950
Sub -Total Specific Services:
$ 43,900
$ 43,900
$ 21,950
TOTAL ADMINISTRATIVE SERVICE COSTS
Percent to
Admin
Total FY -Admin
Costs
July thru Dec 2012
TOTAL ADMINISTRATIVE SERVICE COSTS
$ 444,196
$ 222,096
BUDGET-REVENUES(SURPLUS)/EXPENSES(DEFICIT)
0
$ 85,282
/4
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FIRST AMENDED AGREEMENT FOR REIMBURSEMENT OF COSTS
AND CITY/SUCCESSOR AGENCY OPERATIONS LOAN
This FIRST AMENDED AGREEMENT FOR REIMBURSEMENT OF COSTS AND
CITY/SUCCESSOR AGENCY OPERATIONS LOAN ("First Amended Agreement") is made
and entered into as of , 2012 by and among the CITY OF TUSTIN, a California
municipal corporation ("City"), and the CITY OF TUSTIN ACTING AS SUCCESSOR
AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY ("City Successor
Agency").
RECITALS
A. The Tustin Community Redevelopment Agency ("Agency") was established as a
community redevelopment agency that was previously organized and existing under the California
Community Redevelopment Law, Health and Safety Code Sections 33000, et seq. ("CRL"), and
previously authorized to transact business and exercise the powers of a redevelopment agency
pursuant to action of the City Council ("City Council") of the City.
B. The Tustin Housing Authority is a housing authority and public body corporate and
politic organized, existing, and operating pursuant to the California Housing Authorities Law, Health
and Safety Code Section 34200, et seq.
C. Assembly Bill 1X 26 added Parts 1.8 and 1.85 to Division 24 of the California Health
& Safety Code, which laws caused the dissolution and wind down of all redevelopment agencies
("Dissolution Act").
D. On December 29, 2011, California Redevelopment Association, et al. v. Matosantos,
Case No. 5194861, the California Supreme Court upheld the Dissolution Act and thereby all
redevelopment agencies in California are subject to the Dissolution Act and were dissolved effective
February 1, 2012.
E. The Agency is now a dissolved community redevelopment agency pursuant to the
Dissolution Act.
F. By a resolution considered and approved by the City Council at an open public
meeting on January 17, 2012, the City chose to become and serve as the "City Successor Agency" to
the dissolved Agency under the Dissolution Act.
G. As of and on and after February 1, 2012, the City serves as the "City Successor
Agency" and will perform its functions as the successor agency under the Dissolution Act to
administer the enforceable obligations of the Agency and otherwise unwind the Agency's affairs, all
subject to review and approval by a seven -member Oversight Board formed thereunder.
H. By a resolution considered and approved by the City Council at an open public
meeting on January 17, 2012, and pursuant to California Health and Safety Code Section 34176 of
the Dissolution Act, the City declined to assume the housing assets and functions of the Agency and
selected the Tustin Housing Authority to so assume such housing assets and functions, and on such
date, also pursuant to Section 34176, the Housing Authority accepted and assumed the housing assets
and functions of the Agency and as of February 1, 2012 became and serves as the "Successor
Housing Agency" of the former Agency pursuant to the Dissolution Act. At this time, assets
Page I
assigned and transferred by operation of law and to be assigned and transferred to the Successor
Agency by authorization of and direction from the Oversight Board and operating pursuant to the
Dissolution Act, are not adequate to fund administrative support costs and expenses unless any future
Low and Moderate Income Housing fund balances are authorized to be transferred under State Law
to the Successor Housing Agency. If this occurs, a future modification to this Agreement may be
necessary.
I. City as the Successor Agency is engaged in activities necessary and appropriate to
wind down the activities of Tustin Community Redevelopment Agency's Redevelopment Plans
("Redevelopment Plans") for the MCAS Tustin Project, the Town Center Project and the South
Central Project ("Project Areas") that were originally adopted and amended by ordinances of the City
Council.
J. Employees of the City will perform day-to-day administration and operation of the
Successor Agency's duties and functions. Since the Tustin Community Redevelopment Agency was
originally formed and upon Successor Agency's effectiveness as of February 1, 2012, the City has
provided and shall continue to provide services to the Successor Agency, including but not limited to
providing administrative, accounting, auditing, planning, engineering, legal, risk management,
financial, clerical, recordkeeping, and other services necessary for the Successor Agency to carry out
its responsibilities.
K. City and City Successor Agency on March 13, 2012, entered into an Agreement for
Reimbursement of Costs and City/Successor Agency Operations Loan ("Original Agreement") to
document an on-going cooperative arrangement regarding administrative and operational services
and payment for services whereby City agrees to provide administrative and operational services and
City Successor Agency agrees to pay City for the cost of all such services to be provided by City for
City Successor Agency pursuant to California Health and Safety Code Section 34177 0).
NOW, THEREFORE, for and in consideration of the mutual promises, covenants and
conditions herein contained, the parties hereto agree as follows:
1. Modification of Section 2 of the Original Agreement as it relates to the Cost of
Administrative Expenses and Administrative Cost Allowances for Fiscal Year 2012-13. Section
2 of the Original Agreement is hereby amended to add the following new Section 2.4 to read as
follows:
"Section 2.4. City Successor Agency and City estimate that the cost of administrative and
operational services to be provided by City to the City Successor Agency for the period of July 1,
2012 through June 30, 2013 is Four Hundred Forty -Four Thousand One Hundred Ninety -Six Dollars
($444,196). Pursuant to the provisions of Section 4 herein, City Successor Agency agrees to pay the
sum of $444,196 to City to pay for the estimated administrative expenses of the City Successor
Agency for the period of fiscal year 2012-13, subject to Oversight Board approval and City
Successor Agency preparation and approval of an administrative budget estimate for such services
and costs for the upcoming six-month period, fiscal period of July 1, 2012 through December 31,
2012 and for the fiscal period of January 1, 2013 through June 30, 2013. The City Successor Agency
shall also be liable to the City for payment of any and all direct Project and Program Expenses
incurred by City where they are adopted as part of the ROPS."
Page 2
2. Miscellaneous.
(a) First Amended Agreement Ratified. Except as specifically amended
or modified herein, each and every term, covenant and condition of the Original Agreement as
amended is hereby ratified and shall remain in full force and effect.
(b) Binding. This First Amended Agreement and the Original Agreement
shall be binding upon and inure to the benefit of the parties hereto.
IN WITNESS WHEREOF, the parties have caused this First Amended Agreement to be
executed by their officers thereunto duly authorized on the date first above written.
CITY OF TUSTIN, a California municipal corporation
an
ATTEST:
Pamela Stoker, City Clerk
APPROVED AS TO FORM
David Kendig, City Attorney
John Nielsen, Mayor
AGENCY TO THE TUSTIN
COMMUNITY REDEVELOPMENT AGENCY
John Nielsen
Successor Agency Chairman
ATTEST:
Pamela Stoker, City Clerk
on behalf of the Successor Agency
APPROVED AS TO FORM
David Kendig, Legal Counsel
Page 3