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HomeMy WebLinkAbout6 ADOPT THIRD AMENDED ADMINISTRATIVE AGREEMENT, RES NO. 12-07AGENDA REPORT Agenda Item 6 Oversight Board of the Successor Agency of the Tustin Community Redevelopment Agency MEETING DATE: AUGUST 28, 2012 SUBJECT/ACTION: ADOPT OVERSIGHT BOARD RESOLUTION NO. 12-07 APPROVING THE AMENDED ADMINISTRATIVE BUDGET AND 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 RECOMMENDATION / PROPOSED ACTION It is recommended the Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency adopt Oversight Board Resolution No. 12-07 approving the Amended Administrative Budget and Third Amended Agreement between the City and the Successor Agency for Administrative Support and a matching contribution to the Phase 1 and Phase 2 Tustin Ranch Road Project for the period of January 1, 2013 through June 30, 2013, subject to the following condition: a) Should any subsequent modifications be required, the City Manager and/or Finance Director, or their authorized designee, shall be authorized to make any augmentation, modification, additions or revisions as may be necessary subject to certification by the Oversight Board Chair. (Note: This Resolution shall be effective after transmittal of this Resolution to the DoF and the expiration of five (5) business days pending a request for review by the DoF within the time periods set forth in Assembly Bill No. 1484. In this regard, if the DoF requests review hereof, it will have 40 days from the date of its request to approve this Oversight Board action or return it to the Oversight Board for reconsideration and the action, if subject to review by DoF, will not be effective until approved by DoF.) 1:(e]:Te1l1.1a] Health & Safety Code (HSC) Section 341770) requires the Successor Agency to prepare a proposed administrative budget for the upcoming six month fiscal period 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 Agenda Report August 28, 2012 Page 2 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 and 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 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 Agenda Report August 28, 2012 Page 3 included the Second Amended Agreement. On July 12, 2012, the Successor Agency submitted the Third Amended Initial ROPS and Second Amended Second ROPS to the 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 2012 through December 2012 period is $292,125. On August 14, 2012, the Successor Agency approved the Administrative Budget and the Successor Agency and City approved the Third Amended Agreement. Staff is available to answer any questions the City Council may have. Jerry Craig Program M Oversight Board Resolution No. 12-07 OVERSIGHT BOARD RESOLUTION NO. 12-07 A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY APPROVING AN ADMINISTRATIVE BUDGET AND THIRD AMENDED AGREEMENT AND MAKING CERTAIN FINDINGS IN CONNECTION THEREWITH The Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency finds, determines and declares as follows: 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 of Tustin ("City'); and B. AB X1 26 ("AB26") added Parts 1.8 and 1.85 to Division 24 of the California Health and Safety Code, which laws cause the dissolution and wind down of all redevelopment agencies ("Dissolution Act"); and C. On December 29, 2011, in the petition California Redevelopment Association 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 as of and on February 1, 2012; and D. The Agency is now a dissolved community redevelopment agency pursuant to the Dissolution Act; and E. 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 "Successor Agency" to the dissolved Agency under the Dissolution Act; and F. As of and on and after February 1, 2012, the City serves as the "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 the review and approval by the seven -member Oversight Board formed thereunder; and G. Pursuant to Section 34179, the Successor Agency's Oversight Board has been formed and the initial meeting has occurred on March 13, 2012; and H. Section 34179(e), as amended by Assembly Bill 1484 ("AB 1484"), requires all actions taken by the Oversight Board to be adopted by resolution; and Oversight Board Resolution 12-07 Page 1 of 4 I. 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; and J. On August 14, 2012, the Successor Agency approved the Administrative Budget for the period of January 1, 2013 through June 30, 2013 and authorized the Successor Agency to enter into a Third Amended Agreement for Reimbursement of Costs with the City for Administrative Support 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; and K. The Oversight Board has duly considered all other related matters and has determined that the approval of the Administrative Budget and Third Amended Agreement and submission to the California Department of Finance is in the best interests of the City and Agency and in the health, safety, and welfare of its residents, and in accord with the public purposes and provisions of applicable state and local laws and requirements. NOW, THEREFORE, BE IT RESOLVED BY A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY: Section 1. The foregoing recitals are incorporated into this Resolution by this reference, and constitute a material part of this Resolution. Section 2. The Oversight Board approves the Third Amended Agreement attached hereto as Attachment No. 1 and incorporated herein, and further authorizes the Successor Agency to transmit this Resolution to the County Auditor -Controller, the State Department of Finance ("DoF"), and the State Controller's Office. Section 3. The City Manager of the Successor Agency or his authorized designee is directed to post this Resolution on the City/Successor Agency website. Section 4. This Resolution shall be effective after transmittal of this Resolution to the DoF and the expiration of five (5) business days pending a request for review by the DoF within the time periods set forth in Assembly Bill No. 1484, which amended the Dissolution Act and was approved by the Governor on June 27, 2012. In this regard, if the DoF requests review hereof, it will have 40 days from the date of its request to approve this Oversight Board action or return it to the Oversight Board for Oversight Board Resolution 12-07 Page 2 of 4 reconsideration and the action, if subject to review by DoF, will not be effective until approved by DoF. Section 5. The Secretary of the Oversight Board shall certify to the adoption of this Resolution. APPROVED AND ADOPTED this 28th day of August, 2012. Doug Davert, Chairman Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency ATTEST: Jerry Amante, Secretary Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency Oversight Board Resolution 12-07 Page 3 of 4 STATE OF CALIFORNIA ) COUNTY OF ORANGE )SS CITY OF TUSTIN ) I, JERRY AMANTE, Secretary of the Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency, do hereby certify that the whole number of the members of the Agency Board is seven; that the above and foregoing Resolution No. 12-07 was duly passed and adopted at a regular meeting of the Oversight Board, held on the 28th day of August, 2012, by the following vote: BOARD MEMBER AYES: BOARD MEMBER NOES: BOARD MEMBERS ABSENT: Jerry Amante, Secretary Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency Attachment No. 1 — Administrative Budget for January 1, 2013 through June 30, 2013 Attachment No. 2 — City and Successor Agency Third Amended Agreement for Reimbursement of Costs for Fiscal Year 2012-2013, Oversight Board Resolution 12-07 Page 4 of 4 ATTACHMENT NO. 1 ADMINISTRATIVE BUDGET January 1, 2013 through June 30, 2013 ESTIMATED REVENUES Object Position Percent to Total FY - Adminj JAN THRU JUN 2013 1 Enforceable Obligations Paid with Redevelopment Property Tax Trust Fund 1 5 17.665.404 7.927 Successory Agency 1 7,927,889 4 Administrative Cost Allowance for FY 12/13 3% $ 529,962 237,837 ESTIMATED EXPENSES EMPLOYEE DETAILS Object Position Fiscal Year - Totall Percent to Total FY - AdminI JAN THRU JUN 2013 Sub -Total Wages, Benefits and WC: $ I $ I $ OTHER ADMINISTRATIVE DIRECT COSTS Object Code Item Total During Fiscal Year 2012 13 Percent to Admin Total FY - Admin Costs JAN THRU JUN 2013 1 6147 2 6355 3 6400 4 6415 5 6420 6 6710 7 6715 8 6730 9 6840 10 6845 11 6848 Bank Service Charges Telephone Office Supplies Mail and Postage Service Printing Meetings (staff) Training Expense Membership/Subscriptions Vehicle Mileage Vehicle Lease Equipment IT Support Services Sub -Total Admin Cost Allowances: 3,000 4,800 5,200 1,600 9,000 0 0 0 200 6,800 36,500 $ 67,100 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% $ 3,000 4,800 5,200 1,600 9,000 0 0 0 200 6,800 36,500 67,100 1,500 2,400 2,600 800 4,500 0 0 0 100 3,400 18,250 $ 33,550 CITY ADMINISTRATIVE SUPPORT COSTS BASED ON COST ALLOCATION (ATTACHED) Object Code Item 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 $ 182,337 CITY ATTORNEY (contract services) Object Code Description of Services Total During Fiscal Year 2012/13 Percent to Admin Total FY - Admin Costs JAN THRU JUN 2013 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 City Attorney: $ 200,000 $ 200,000 100% $ 200,000 $ - $ 200,000 $ - SPECIFIC SERVICES (3rd Revised EOPS and Draft ROPS) Object Code Description Total During Fiscal Year 2012/13 Percent to Admin Total FY - Admin Costs JAN THRU JUN 2013 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 JAN THRU JUN 2013 TOTAL ADMINISTRATIVE SERVICE COSTS $ 529,962 $ 237,837 BUDGET - REVENUES (SURPLUS)/EXPENSES (DEFICIT) 0 $ - G v C N ° W) 0 W U O nc L ani o s d °' _ L° 3 0 O� N y L C R ttl M U itl U o .0 N G N O N U 0 UO O cn ... 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V r ° Q. 3 U d a. °c p S a o aci U U U ii a 2 ATTACHMENT NO. 2 THIRD AMENDED AGREEMENT FY 2012-2013 Oversight Board Resolution 12-07 Page 2 of 4 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 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 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. 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 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 I 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 l and Phase 2 Tustin Ranch Road Improvements Project to be disbursed from MCAS 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 WAS 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 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." 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 John Nielsen, Mayor ATTEST: Pamela Stoker, City Clerk APPROVED AS TO FORM David Kendig, City Attorney "CITY SUCCESSOR AGENCY" SUCCESSOR 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 4