Loading...
HomeMy WebLinkAboutSA RES 14-04SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY RESOLUTION NO. 14 -04 A RESOLUTION OF THE CITY OF TUSTIN, ACTING AS THE SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY, AMENDING AND REINSTATING THE WORKING CAPITAL LOAN AND ADMINISTRATIVE SERVICES AGREEMENT BETWEEN THE CITY OF TUSTIN AND THE SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY The City of Tustin, acting as the Successor Agency to the Tustin Community Redevelopment Agency, finds, determines and declares as follows: A. The Tustin Community Redevelopment Agency ( "Agency ") was a community redevelopment agency organized and existing under the California Community Redevelopment Law, Health and Safety Code Sections 33000, et seq. ( "CRL ") and had been 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. Assembly Bill X1 26 added Parts 1.8 and 1.85 to Division 24 of the California Health and Safety Code, which laws caused the dissolution and wind down of all redevelopment agencies ( "Dissolution Act "); and C. On December 29, 2011, in the petition California Redevelopment Association, et al v. Ana Matosantos, et al, 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 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 Tustin Community Redevelopment Agency under the Dissolution Act; and F. Since 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 a seven member Oversight Board formed thereunder; and Resolution No. 14 -04 Page 1 of 4 G. On June 12, 1996, the Tustin City Council and Tustin Community Redevelopment Agency approved a $2,400,000 Working Capital Loan and Administrative Services Agreement ( "Working Capital Loan ") to the South Central Project Area for the purposes of permitting the Agency to complete the goals and objectives of the South Central Project Area; and H. The Working Capital Loan carried over and increased as needed from year -to -year until the final issuance of $4,650,000 on September 7, 2010; and I. In accordance with the Dissolution Act and in order to receive Redevelopment Property Tax Trust Funds, the Successor Agency submitted the Working Capital Loan on the Recognized Obligation Payment Schedule for approval by the State of California Department of Finance ( "DoF "); and J. DoF denied the Working Capital Loan, stating it is not an enforceable obligation and indicated the Successor Agency could seek to reinstate the Loan upon receiving a Finding of Completion ( "Finding "); and K. On May 10, 2013, the Successor Agency remitted what it believes to be its last remairiing unencumbered funds to the Orange County Auditor - Controller and on May 13, 2013, requested a Finding from DoF; and L. On July 3, 2013, DoF informed the Successor Agency that a Finding would not be issued until after the Successor Agency remitted the principal and interest due on December 1, 2013 for the December 31, 2008 Promissory Note between the City and Successor Agency; and M. In response, the City, the Successor Agency and the Tustin Housing Authority have filed a "Petition for Writ of Mandate and Complaint for Declaratory and Injunctive Relief' from the Superior Court of the State of California; and N. The City, acting as Successor Agency, has determined it is necessary and appropriate to amend and reinstate the Working Capital Loan originally entered into by and between the City of Tustin and the former Tustin Community Redevelopment Agency as an enforceable obligation; and O. In accordance with the Dissolution Act, the amended and reinstated Working Capital Loan will also require the Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency to deem it an enforceable obligation and DoF approval. NOW, THEREFORE, BE IT RESOLVED BY THE TUSTIN CITY COUNCIL, SERVING AS 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. Resolution No. 14 -04 Page 2 of 4 Section 2. The City acting as Successor Agency to the Tustin Community Redevelopment Agency approves amending and reinstating the Working Capital Loan and Administrative Services Agreement between the City of Tustin and the Successor Agency to the Tustin Community Redevelopment Agency. Section 3. The Agency Chair is hereby authorized to execute the First Amendment to the Working Capital Loan and Administrative Services Agreement, in substantially the form attached to this Resolution. Section 4. This Resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk on behalf of the Successor Agency shall attest to and certify the vote adopting this Resolution. PASSED AND ADOPTED this 21St day of January, 2014. I T ;a 6 � - 1 ELWYN A. 4URRAY,_ " . Chair on behalf of the Successor JEFFI�E�/� PARKER, Cityl le behalf of the Successor Agency Resolution No. 14 -04 Page 3 of 4 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF TUSTIN ) I, JEFFREY C. PARKER, City Clerk of the City of Tustin, acting as the Successor Agency to the Tustin Community Redevelopment Agency, hereby certify that the above and foregoing Successor Agency Resolution No. 14 -04 was duly adopted by the City of Tustin, acting as the Successor Agency to the Tustin Community Redevelopment Agency, at its regular meeting held on the 21 st day of January 21, 2014, and that it was so adopted by the following vote: COUNCILPERSONS AYES: Murray, Puckett, Nielsen, Gomez, Bernstein (5) COUNCILPERSONS NOES: None (0) COUNCILPERSONS ABSTAINED: None (0) COUNCILPERSONS ABSENT: None (0) Jeffrey C rker, City �, en behalf of the Successor Agency Attachment: First Amendment to the Working Capital Loan and Administrative Services Agreement 1 Resolution No. 14 -04 Page 4of4 1 ATTACHMENT FIRST AMENDMENT TO THE WORKING CAPITAL LOAN AND ADMINISTRATIVE SERVICES AGREEMENT 977607.1 FIRST AMENDMENT TO THE WORKING CAPITAL LOAN AND ADMINISTRATIVE SERVICES AGREEMENT "WORKING CAPITAL LOAN" This FIRST AMENDMENT TO THE WORKING CAPITAL LOAN AND ADMINISTRATIVE SERVICES AGREEMENT ( "AGREEMENT ") is made and entered into as of the 21St day of January, 2014 ( "Effective Date "), by and between the CITY OF TUSTIN, a municipal corporation ( "City ") and the SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY ( "Successor Agency "). RECITALS WHEREAS, on September 7, 2010, the City Council of the City, pursuant to Health and Safety Code Section 33610, deemed it necessary to continue to loan the former Tustin Community Redevelopment Agency ( "former Agency ") $6,885,200, $4,650,000 as a Working Capital Loan and the balance for other services, to assist with carrying out programs budgeted for 2010 -2011; and WHEREAS, the City Council of the City offered said loan to the former Agency; and WHEREAS, the City offered to provide administrative, planning, engineering, design, accounting and other services as required, including direct and indirect overhead charges to the former Agency; and WHEREAS, the former Agency, pursuant to Health and Safety Code Section 33334.3, determined that the planning and administrative expenses are necessary for the production, improvement, or preservation of low- and moderate - income housing; and WHEREAS, the former Agency, pursuant to Health and Safety Code Section 33601, accepted said offers; and WHEREAS, the parties intend to further memorialize their agreement as to said loan and to set forth the terms and conditions thereof as agreed to at the time of offer and acceptance; and WHEREAS, the City is a municipal corporation organized and operating under the laws of the State of California; and WHEREAS, the Successor Agency is a public body corporate and politic, organized and operating under Parts 1.8 and 1.85 of Division 24 of the California Health and Safety Code, and the successor the former Tustin Community Redevelopment Agency ( "former Agency ") that was previously a community redevelopment agency organized and existing pursuant to the Community Redevelopment Law, Health and Safety Code Section 33000, et seq. ( "CRL "); and WHEREAS, Assembly Bill x1 26 ( "AB x1 26 ") added Parts 1.8 and 1.85 to Division 24 of the California Health & Safety Code and which laws were modified, in part, and determined constitutional by the California Supreme Court in the petition California Redevelopment Association, et al. v. Ana Matosantos, et al., Case No. S194861 ( "Matosantos Decision "), which laws and court opinion caused the dissolution of all redevelopment agencies and winding down of the affairs of former redevelopment agencies, thereafter, such laws were amended further by Assembly Bill 1484 ( "AB 1484 ") (together AB x1 26, the Matosantos Decision, and AB 1484 are referred to as the "Dissolution Laws "), and all statutory references herein are to the Health and Safety Code of the Dissolution Laws unless otherwise stated; and WHEREAS, as of February 1, 2012 the former Agency was dissolved pursuant to the Dissolution Laws and as a separate public entity, corporate and politic the Successor Agency administers the enforceable obligations of the former Agency and otherwise unwinds the former Agency's affairs, all subject to the review and approval by a seven - member oversight board ( "Oversight Board "); and WHEREAS, Section 34179 provides that the Oversight Board has fiduciary responsibilities to holders of enforceable obligations and the affected taxing entities that benefit from distributions of property tax and other revenues pursuant to Section 34188 of Part 1.85 of the Dissolution Laws; and WHEREAS, at the time of Dissolution, the City had loaned the former Agency $4,650,000 for the purposes of permitting the former Agency to complete the goals and objectives of the South Central Project Area; and WHEREAS, in accordance with the Dissolution Act and in order to receive Redevelopment Property Tax Trust Funds ( "RPTTF "), the Successor Agency submitted the Working Capital Loan on a Recognized Obligation Payment Schedule ( "ROPS ") for approval by the State of California Department of Finance ( "DoF "); and WHEREAS, DoF denied the Working Capital Loan, stating it is not an enforceable obligation and indicated the Successor Agency could seek to reinstate the Reimbursement Agreement upon receiving a Finding of Completion ( "Finding ") pursuant to ; and WHEREAS, on May 10, 2013, the Successor Agency remitted what it believes to be its last remaining unencumbered funds to the Orange County Auditor - Controller and on May 13, 2013, requested a Finding from DoF; and WHEREAS, on July 3, 2013, DoF informed the Successor Agency that a Finding would not be issued until after the Successor Agency remitted the principal and interest due on December 1, 2013 for the December 31, 2008 Promissory Note between the City and Successor Agency even though such monies were not due at the time of the "true -up" payment in July 2012 nor at the time of completion of DoF's review of the due diligence review reports in late 2012 and early 2013; and FA WHEREAS, in response, the City, the Successor Agency and the Tustin Housing Authority have filed a "Petition for Writ of Mandate and Complaint for Declaratory and Injunctive Relief' in the Superior Court, County of Sacramento pursuant to the Dissolution Laws ( "Petition "), and WHEREAS, while the Finding has been withheld from the Successor Agency under the Dissolution Laws, nonetheless as a part of the facts and information to be submitted to the Superior Court in connection with advancing the Petition, the City and the Successor Agency have determined it necessary and appropriate to amend and reinstate the Working Capital Loan originally entered into by and between the City of Tustin and the former Agency as an enforceable obligation; and WHEREAS, under the Dissolution Laws, the amended and reinstated Working Capital Loan will be submitted to the Oversight Board for review and deem it an enforceable obligation and if approved then the matter will be submitted again to the DoF for review and approval. NOW, THEREFORE, in consideration of the mutual covenants, agreements and considerations contained herein, the City and the Successor Agency hereby agree the following sections shall be amended: 1. Modification to the Working Capital Loan and Administrative Services Agreement. a) Section 2. The sum loaned to the former Agency is hereby deleted in its entirety and replaced as follows: 2. The sum loaned to the Successor Agency is to be repaid to the City as follows: a. Pursuant to Health and Safety Code ( "HSC ") Section 34191.4(b)(2), interest on $4,650,000 shall accrue at the monthly rate as reported by the Local Agency Investment Fund (LAIF) from the date of transfer of until such time is repaid to the City. b. The sum loaned to the Successor Agency, as well as accrued interest thereon, shall be repaid to the City by the Successor Agency from Redevelopment Property Tax Trust Funds received pursuant to HSC Section 34177. C. The sum loaned to the Successor Agency, as well as accrued interest thereon, shall be paid to the City by the Successor Agency in accordance with EXHIBIT 'A' — Working Capital Loan Payment Schedule. Payment shall commence upon Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency approval and State of California Department of Finance approval. 3 1 b) Section 3. is hereby deleted in its entirety. IN WITNESS WHEREOF, the City and the Successor Agency have executed the First Amendment as of the Effective Date. ATTEST: CITY CLERK in Jeffrey C. Parker APPROVED AS TO FORM: in David E. Kendig, City Attorney ATTEST: CLERK TO SUCCESSOR AGENCY By: Jeffrey C. Parker CITY: CITY OF TUSTIN, a California municipal corporation Elwyn A. Murray, Mayor SUCCESSOR AGENCY: SUCCESSOR AGENCY TO TUSTIN COMMUNITY REDEVELOPMENT AGENCY, a public body corporate and politic By: Elwyn A. Murray, Chair 12 APPROVED AS TO FORM: Celeste Brady Successor Agency Special Counsel 1 Attachment: EXHIBIT 'A' — Working Capital Loan Payment Schedule 1 5 Future FY Activity Fiscal Year 2014 -2015 2015 -2016 2016 -2017 2017 -2018 2018 -2019 City /Agency Loan Original Principal 4,650,000 Interest (LAIF) 0.26% - Qtr end: Sept 2013 Original terms /year 5 ($925,177) ($927,582) ($929,994) ($932,412) ($934,836) Interest (S 12,090'a ($9,685) ($7,273) ($4,855) ($2,431) yment to C ($937,267) ($937,267) ($937,267) ($937,267) ($937,267) Total: ($4,650.000) ($36,333) 1 ($4,686,333) 1 1 e Principal After FY $3,724,823.44 $2,797,241.43 $1,867,247.70 $934,835.98 $0.00