HomeMy WebLinkAbout01 THIRD AMENDED AGREEMENT-PHASE 1 & 2 TUSTIN RANCH ROAD PROJECTAgenda Item 1
Reviewed:
AGENDA REPORT City Manager
Finance Director
MEETING DATE: AUGUST 14, 2012
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: CITY MANAGER'S OFFICE AND FINANCE DEPARTMENT
SUBJECT: SUCCESSOR AGENCY APPROVAL OF AMENDED
ADMINISTRATIVE BUDGETS AND AUTHORIZATION TO ENTER
INTO A THIRD AMENDED AGREEMENT BETWEEN THE CITY
AND SUCCESSOR AGENCY FOR ADMINISTRATIVE SUPPORT
AND A MATCHING CONTRIBUTION TO THE PHASE 1 AND
PHASE 2 TUSTIN RANCH ROAD PROJECT
SUMMARY
Successor Agency approval is requested of an amended Administrative Budget and
authorization for the City and Successor Agency to enter into a Third Amended
Agreement for reimbursement of administrative support and a matching contribution to
the Phase 1 and Phase 2 Tustin Ranch Road Project using MCAS Tustin Bond
Proceeds.
RECOMMENDATION
1. It is recommended that the City Council approve and authorize the City to enter into
a Third 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 amended Administrative Budget pursuant to California
Health and Safety Code (HSC) Section 341770), subject to Oversight Board
approval on August 28, 2012. Should any subsequent modifications be
determined necessary, the City Manager and /or Finance Director, or their
authorized designee, shall be authorized to make augmentation, modification,
additions, or revisions as may be necessary and subject to Oversight Board
approval.
Agenda Report
August 14, 2012
Page 2
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
Agency operations, obligations consistent with the Administrative Budget
approved by the Successor Agency, and the provision of matching funds in the
amount of $14,148,794 from the MCAS Tustin 2010 Tax Allocation Bonds
proceeds for Phase 1 and Phase 2 Tustin Ranch Road Improvements Project.
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.
BACKGROUND
HSC Section 341770) 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 the HSC Section 341770), the administrative budget is
to include all of the following: (i) estimated amounts of the Successor Agency's
administrative costs for the upcoming 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 HSC Section 34171, the Administrative Budget for FY 2012-
2013 is payable from property tax revenues of up to three percent (3 %) of property tax
allocated to the Redevelopment Obligation Retirement Fund during FY 2012 -13. In any
event, the amount allocated for administrative costs shall not be less than Two Hundred
Fifty Thousand Dollars ($250,000) for any fiscal year.
The proposed amended Successor Agency Administrative Budget for the period of
January 2013 through June 2013 reflects the projected administrative costs in the Third
Recognized Obligation Payment Schedule ( "Third ROPS "). Under HSC 34177(k), the
Successor Agency provides these administrative cost estimates to be paid from
property tax revenues deposited into the Redevelopment Property Tax Trust Fund to
the County of Orange Auditor - Controller for each six month fiscal period. Since the
ROPS may change in the future, staff also requests that any future modifications
necessary to the Administrative Budget be authorized to be made by the City Manager
or Finance Director subject to Oversight Board approval.
In conjunction with the past approvals of the Administrative Budget for FY 2011 -12 and
2012 -2013, including each six month ROPS time frame, the City and Successor Agency
entered into an agreement for reimbursement of costs incurred by the City to support
Successor Agency operations and obligations (original agreement approved
March 20, 2012, First Amendment on April 17, 2012, and Second Amendment on
Agenda Report
August 14, 2012
Page 3
June 19, 2012). The Oversight Board has previously authorized the Successor Agency
to enter into subsequent amendments to this agreement to reflect the revised
Administrative Budgets modified in conjunction with approval of the ROPS.
On May 29, 2012 the Oversight Board, pursuant to HSC Section 34180(e), approved
the acceptance of financial assistance from a variety of private and public funding
sources for the Tustin Ranch Road Phase 1 and Phase 2 Projects conditioned upon the
provision of matching funds from the MCAS 2010 Tustin Tax Allocation Bonds ( "MCAS
Tustin Bond Proceeds ") in the amount of $5,983,863 for Phase 1 and $8,164,931 for
Phase 2, for a total match of $14,148,794. In addition, in compliance with HSC Section
34180(h), the Oversight Board also authorized the Successor Agency to enter into a
reimbursement agreement with the City for the Successor Agency's matching
contributions to each phase of the Tustin Ranch Road Project from MCAS Tustin Bond
Proceeds.
On June 19, 2012, the Successor Agency and the City approved a Second Amended
Agreement that funded necessary services from the City to support Successor Agency
responsibilities in winding down the activities of the former redevelopment agency and
included the provision of matching funds for each phase of the Tustin Ranch Road
Project using MCAS Tustin 2010 Bond Proceeds. On July 10, 2012, the Oversight
Board adopted the Third Amended Initial Recognized Obligation Payment Schedule
( "Third Amended Initial ROPS ") and the Second Amended Second Recognized
Obligation Payment Schedule ( "Second Amended Second ROPS "), both of which
included the Second Amended Agreement. On July 12, 2012, the Successor Agency
submitted the Third Amended Initial ROPS and Second Amended Second ROPS to
Department of Finance (the "DoF ") for approval. On July 28, 2012, the "DoF" notified
the Successor Agency they would not review the amended ROPS and to include
contested items in the Third ROPS.
Pursuant to the DoF's July 28, 2012 notification, the section in the Third Amended
Agreement discussing the provision of matching bond funds has been modified to state
the expenditure of bond funds will not occur until the Third ROPS has been approved.
The administrative allowance for the January 2013 through June 2013 period as
determined by the amount of Redevelopment Property Tax Trust Funds allocated in the
Third ROPS is $237,837, an increase from the previous ROPS estimate of $90,970 in
the Second Amended Agreement. The total administrative allowance for FY 2012 -13 as
determined by the Third ROPS is $529,962, an increase from the previous ROPS
estimate of $383,095 in the Second Amended Agreement. The Administrative Budget
for the July through December 2012 period is $292,125.
Agenda Report
August 14, 2012
Page 4
A copy of the amended agreement is attached for City and Successor Agency approval.
Staff is available to answer any questions the City Council may have.
Pr2gCraig Pamela Direct Arends-King
Program Man r Finance Director
Successor A ncy t ustin Successor Agency to the Tustin
Communi velopment Agency Community Redevelopment Agency
Attachments: 1. Proposed Administrative Budget for January 1, 2013 through
June 30, 2013.
2. Proposed City and Successor Agency Third Amended
Agreement for Reimbursement of Costs for Fiscal Year
2012 -2013.
Attachment 1
Administrative Budget
January 1, 2013 through June 30, 2013
ESTIMAT ES
EMPLOYEE DETAILS
Object Position Fiscal Year - Totall Percent to Total FY - Admini JAN THRU JUN 2013
Sub -Total Wages, Benefits and WC: $
Object
Colle
Item
Total During Fiscal
Year
Percent to
In
Total FY - Admin
costs
JAN THRU JUN 2013
1
2
6147
6355
Bank Service Charges
Telephone
3,000
4,800
100%
3,000
1,500
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
6840
Vehicle Mileage
200
100%
200
100
10
6845
Vehicle Lease Equipment
6,800
100%
6,800
3,400
11
6848
IT Support Services
Sub -Total Admin Cost Allowances:
36,500
$ 67,100
100%
36,500
18,250
$ 67,100
$
33,550
CITY ADMINISTRATIN_ _ C_OS_TS BASED ON COST ALLOCATION (ATTACHED)
Object
Code
Ite
Total During Fiscal
Year 2012/13
Total FY - Admin
Costs
JAN THRU JUN 2013
1
City Administrative Support Costs
based on Cost Allocation
836 ,000
26.2`&.
218,962
$
152,364
CITY ATTORNEY
Object
Total During Fiscal
-,. 13
Percent t0
AdIft
Total FY -Admin
- _aiz.-sc:ats
JAN THRU JUN 2013
5017
City Attorney's Ofce - 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 firms
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
$
29,973
$ 200,000
$
29,973
SPECIFIC SERVICES (3rd Revised EOPS and Draft ROPS)
Object
Code
Description
Total During Fiscal
Year 2012/13
Percent to
Admin
Total FY -Admin
Costs
JAN THRU JUN 2013
1
6315
Lease of Office Space
43,900
100%
$ 43,900
21,950
Sub -Total Specific Services:
$ 43,900
$ 43,900
$
21,950
COSTS
-- 50
Admin
ToLTFY -Admin
costs
JAN THRU JUN 2013
TOTAL ADMINISTRATIVE SERVICE COSTS
$ 529,962
$
237,837
BUDGET- REVENUES (SURPLUS) /E%PENSES(DEFICIT)
0 $
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Attachment 2
City and Successor Agency
Third Amended Agreement for Reimbursement of Costs
THIRD AMENDED AGREEMENT FOR REIMBURSEMENT OF COSTS
AND CITY /SUCCESSOR AGENCY OPERATIONS LOAN
This THIRD AMENDED AGREEMENT FOR REIMBURSEMENT OF COSTS AND
CITY /SUCCESSOR AGENCY OPERATIONS LOAN ("Third 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 I X 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, 201 I , 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 assume such housing assets and functions, and on such date,
also pursuant to Section 34176, the Tustin 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 1
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.
f. 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 I, 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 entered into an Agreement for Reimbursement of
Costs and City /Successor Agency Operations Loan on March 20, 2012 (the "Original Agreement "),
as amended by the First Amended Agreement on April 17, 2012 and the Second Amended
Agreement on June 19, 2012 (the Original Agreement and all amendments shall be collectively
referred to as the "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).
L. Pursuant to Health and Safety Code (HSC) Section 34180(e), the Oversight Board, on
May 29, 2012, approved the acceptance of financial assistance for the Phase 1 and Phase 2 Tustin
Ranch Road Improvements Project conditioned upon the provision of matching funds to the City
from the MCAS Tustin 2010 Tax Allocation Bonds by the Successor Agency. In compliance with
HSC Section 34180(h), the Oversight Board also authorized the Successor Agency to enter into an
amended reimbursement agreement with the City for the Successor Agency's matching contribution
to the Tustin Ranch Road Improvements Project in the amounts of $5,983,863 for Phase 1 and
$8,164,931 for Phase 2 to be disbursed from MCAS Tustin 2010 Tax Allocation Bonds to the City.
M. The Oversight Board on May 29, 2012, authorized the City Successor Agency to
enter into an amended reimbursement agreement with the City to reflect modifications to the
Administrative Cost Allowance and Administrative Budget for Fiscal Year 2011 -12 and Fiscal Year
2012 -12, as requested by the California Department of Finance.
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 1 of the Original Agreement as it relates to
Reimbursement of Administrative Expenses.
Page 2
(a) Section 1.2 Reimbursement of Phase 1 and Phase 2 Tustin Ranch
Road Improvements Project Expenses is hereby deleted and replaced to read as follows:
"1.2 Reimbursement of Phase 1 and Phase 2 Tustin Ranch Road Improvements Project
Expenses. The City Successor Agency shall be liable to the City for a matching contribution and
payment to be made to the Phase 1 and Phase 2 Tustin Ranch Road Improvements Project to be
disbursed from WAS Tustin 2010 Tax Allocation Bond proceeds to the City upon the effective date
of the Third Recognized Obligation Payment Schedule. The required match from the MCAS Tustin
2010 Tax Allocation Bond proceeds for the Phase 1 Tustin Ranch Road Project is $5,983,863 and for
the Phase 2 Tustin Ranch Road Project is $8,164,931, for a total match of $14,148,794 for Tustin
Ranch Road Project expenses."
2. Modification of Section 2 of the Original Agreement as it relates to the Cost of
Administrative Expenses and Administrative Cost Allowances for Fiscal Years 2011 -12 and
2012 -13.
(a) Section 2.3 of the Original Agreement is hereby deleted and replaced
as follows:
"Section 2.3 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 Five Hundred Twenty -Nine Thousand Nine Hundred and
Sixty -Two Dollars ($529,962). Pursuant to the provisions of Section 4 herein, City Successor
Agency agrees to pay the sum of $529,962 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 two upcoming six -month fiscal periods: 1) July I, 2012 through
December 31, 2012; and 2) January I, 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."
3. Miscellaneous.
(a) Third 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 Third Amended Agreement and the Original Agreement shall be
binding upon and inure to the benefit of the parties hereto.
Page 3
IN WITNESS WHEREOF, the parties have caused this Third Amended Agreement to be
executed by their officers thereunto duly authorized on the date first above written.
"CITY"
CITY OF TUSTIN, a California municipal corporation
IC
ATTEST:
Pamela Stoker, City Clerk
APPROVED AS TO FORM
David Kendig, City Attorney
John Nielsen, Mayor
"CITY SUCCESSOR AGENCY"
SUCCESSOR AGENCY TO THE TUSTIN
COMMUNITY REDEVELOPMENT AGENCY
In
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 4