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Home My WebLink AboutSA 2 FIRST AMENDED AGREEMENT FOR FY2012-13/ADMINISTRATIVE BUDGETMEETING DATE: APRIL 17, 2012 Agenda Item SA2 Reviewed: City Manager Finance Director /A TO: JEFFREY C. PARKER, CITY MANAGER f FROM: CITY MANAGER'S OFFICE SUBJECT: AUTHORIZATION 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 SUCCESSOR AGENCY APPROVAL OF AN ADMINISTRATIVE BUDGET PURSUANT TO HEALTH AND SAFETY CODE SECTION 341770) FOR THE PERIOD FROM JULY 1, 2012 THROUGH DECEMBER 31. 2012 SUMMARY Successor Agency Approval is requested of an Administrative Budget and authorization for the City and Successor Agency to enter into a First Amended Agreement for administrative support and reimbursement for such services. RECOMMENDATION 1. It is recommended that the City Council approve and authorize the City to enter into a First Amended Agreement for Reimbursement of Costs and City /Successor Agency Operations Loan with the City acting as Successor Agency to the Tustin Community Redevelopment Agency. 2. It is recommended the City acting as the Successor Agency to the Tustin Community Redevelopment Agency ( "City Successor Agency ") take the following actions: A. Approve the attached Administrative Budget pursuant to California Health and Safety Code Section 34177 0). B. Approve and authorize the Successor Agency to enter into an Agreement for Reimbursement of Costs and City /Successor Agency Operations Loan with the City for reimbursement of costs incurred by the City to support Successor Agenda Report April 17, 2012 Page 2 Agency operations and obligations consistent with the Administrative Budget approved by the Successor Agency. The Successor Agency shall also be authorized to enter into any agreements necessary to provide administrative support services as identified in the Administrative Budget attached hereto. (Note that the above actions by the City Successor Agency shall not become effective for three business days, pending any request for review by the California Department of Finance (DoF). If DoF requests review of the City Successor Agency action, it shall have 10 days from the date of its request to approve the City Successor Agency 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 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 upcoming six month periods and submit it to the Oversight Board for approval. According to 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 for approval for the period of July 1, 2012 through December 31, 2012. The Oversight Board at its regular meeting on April 10, 2012 reviewed and approved the Administrative Budget. 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. Agenda Report April 17, 2012 Page 3 Also approved by the Oversight Board at its regular meeting on April 10, 2012 pursuant to Health and Safety Section 34180 (h), was a request to permit the Successor Agency to enter into an agreement with the City of the former redevelopment agency that it has succeeded. 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 the City to support Successor Agency operations and obligations (similar to the Agreement approved by the Oversight Board at its meeting on March 13, 2012 and Successor Agency on March 20, 2012). Christine Shingleton Assistant Executive Director Successor Agency for the Tustin Community Redevelopment Agency Pamela Arends -King Finance Director Successor Agency for the Tustin Community Redevelopment Agency Attachments: 1. Proposed Administrative Budget for July 1, 2012 through December 31, 2012 2. Proposed City and Successor Agency First Amended Agreement for Reimbursement of Costs for Fiscal Year 2012 -2013 Attachment 1 Administrative Budget July 1, 2012 through December 31, 2012 Object Position Tax Trust Fund ment Percent to Total FY - Admin1 July thru Dec 2012 4 Administrative Cost Allowance for FY 12/13 1 3% $ 444,196 I 307,380 1 , ��naSFs Object Position Fiscal Year - Total Percent to Total FY - Adminl July thru Dec 2012 Sub -Total Wages, Benefits and WC: OTHER ADMINISTRATIVE DIRECT COSTS Object Code Item Total During Fiscal Year 2012/13 Percent to Admin Total FY - Admin Costs July thru Dec 2012 1 6147 Bank Service Charges 3,000 100% 3,000 1,500 2 6355 3 6400 4 6415 5 6420 6 6710 7 6715 8 6730 9 6840 10 6845 11 6848 Telephone Office Supplies M ail and Postage Service Printing Meetings (staff) Training E xpense Membership /Subscriptions Vehicle Mileage Vehicle Lease Equipment IT Support Services Sub -Total Admin Cost Allowances: 4,800 5,200 1,600 9,000 0 0 0 200 6,800 36,500 $ 67,100 100% 4,800 2,400 100% 5,200 2,600 100% 1,600 800 100% 9,000 4,500 100% 0 0 100% 0 0 100% 0 0 100% 200 100 100% 6,800 3,400 100% 36,500 18,250 $ 67,100 $ 33,550 CITY ADMINISTRATIVE SUPPORT COSTS BASED ON COST ALLOCATION (ATTACHED) Object Code Item Total During Fiscal Year 2012/13 Total FY - Admin Costs July thru Dec 2012 1 City Administrative Support Costs based on Cost Allocation 836,000 15.9% 133,196 $ 66,598 CITY ATTORNEY (contract services) Object Code Description 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, Spradiin & Smart (Including: Stradling Yocca Carlson & Rauth; Remy, Thomas, Moose & Manley, Waters & Company, Jeanette Justus). This does not include legal services from the following flrms that are associated with project costs: 1) Armbruster Goldsmith & Delvac LLP; 2)Cappello and Noel LLP, and 3) Kutak Rock. Sub -Total City Attorney: $ 200,000 $ 200,000 100% $ 200,000 $ 100,000 $ 200,000 $ 100,000 SPECIFIC SERVICES (3rd Revised EOPS and Draft ROPS) 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 Sub -Total Specific Services: $ 43,900 $ 43,900 100% $ 43,900 21,950 $ 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 $ 222,098 BUDGET - REVENUES (SURPLUS) /s - NPENSES(DEFICfT 0 $ 77FM U v N N OO,'' c O y O p o 40. a� ° b 0 �' 3 b N O O O �° 0 ° �� o CD '� ••-� Vl �Ur M t� a� r 0 w m N ai o ID = U cn r w O O N Q+ -- QI U ti c t� O cd 'U y O a U N p U N �' bA U U O N U rA o 7a R v .� U U" O 0 O • bq A. 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U wl� 0 N � � G 6s Ge m 0 � U H � Attachment 2 First Amended Agreement for Reimbursement of Costs for Fiscal Year 2012 -13 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. S194861, 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 C ATTEST: Pamela Stoker, City Clerk APPROVED AS TO FORM David Kendig, City Attorney John Nielsen, Mayor SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY ATTEST: Pamela Stoker, City Clerk on behalf of the Successor Agency APPROVED AS TO FORM David Kendig, Legal.Counsel John Nielsen Successor Agency Chairman Page 3