HomeMy WebLinkAboutCC RES 14-08RESOLUTION NO. 14 -08
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN, CALIFORNIA, AMENDING AND REINSTATING
THE PUBLIC WORKS AGREEMENT BETWEEN THE CITY
OF TUSTIN AND THE SUCCESSOR AGENCY TO THE
TUSTIN COMMUNITY REDEVELOPMENT AGENCY
The City Council of the City of Tustin hereby finds, determines and declares as
follows:
A. The Tustin Community Redevelopment Agency ( "Agency ") is a community
redevelopment agency organized and existing under the California Community
Redevelopment Law, Health and Safety Code Sections 33000, et seq. ( "CRL ")
and has 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. The City of Tustin is a municipal corporation of the State of California ( "City");
and
C. Assembly Bill X1 26 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
D. On December 29, 2011, in the case entitled California Redevelopment
Association, et al v. Ana Matosantos, et al ( "Matosantos Decision "), the California
Supreme Court upheld the Dissolution Act and thereby all redevelopment
agencies in California were dissolved as of and on February 1, 2012 under the
dates in the Dissolution Act that were reformed and extended thereby; and
E. The Agency is now a dissolved community redevelopment agency pursuant to
the Dissolution Act; and
F. On June 2, 1993, the Tustin City Council and Tustin Community Redevelopment
Agency approved the Public Works Agreement for the South Central Project
Area; and
G. The Public Works Agreement required the Agency to reimburse the City for
infrastructure improvements constructed as part of the Newport Avenue
Extension Project; and
H. In accordance with the Dissolution Act, the Successor Agency has listed the
Public Works Agreement on the first four Recognized Obligation Payment
Schedules ( "ROPS ") submitted to the State of California Department of Finance
( "DoF "); and
Resolution No. 14 -08
Page 1 of 3
After recognizing and approving the Public Works Agreement as an enforceable
obligation on the first three ROPS submittals, DoF denied the Agreement during
the fourth ROPS submittal, stating that it is not an enforceable obligation, and
indicated the Successor Agency could seek to reinstate the Agreement upon
receiving a Finding of Completion ( "Finding "); and
J. On May 10, 2013, the Successor Agency remitted what it believed to be its last
remaining unencumbered funds to the Orange County Auditor - Controller and on
May 13, 2013, requested a Finding from DoF; and
K. 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
L. 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' with the Superior Court in the County of Sacramento; and
M. The City has determined it is necessary and appropriate to amend and reinstate
the Public Works Agreement originally entered into by and between the City of
Tustin and the Tustin Community Redevelopment Agency on June 2, 1993 as an
enforceable obligation; and
N. In accordance with the Dissolution Act, the amended and reinstated Agreement
will also require the Oversight Board of the Successor Agency to the Tustin
Community Redevelopment Agency to deem it an enforceable obligation.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF TUSTIN:
Section 1. The foregoing recitals are incorporated into this Resolution by this
reference, and constitute a material part of this Resolution.
Section 2. The City Council approves amending and reinstating the June 2,
1993 Public Works Agreement between the City of Tustin and the Successor Agency to
the Tustin Community Redevelopment Agency.
Section 3. The City Council authorizes the Mayor to execute the First
Amendment to the Public Works Agreement, in substantially the form attached to
Resolution 14 -08.
Section 4. This Resolution shall take effect immediately upon its adoption by
the City Council, and the City Clerk shall attest to and certify the vote adopting this
Resolution.
Resolution No. 14 -08
Page 2 of 3
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PASSED AND ADOPTED at a regular meeting of the Tustin City Council held on
the 21St day of January, 2014.
ATTEST:
4j� t✓
JEFFR Y . dARKER,
City C rk
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SS
CITY OF TUSTIN )
I, Jeffrey C. Parker, City Clerk and ex- officio Clerk of the City Council of the City of Tustin,
California, do hereby certify that the whole number of the members of the City Council of
the City of Tustin is five; that the above and foregoing Resolution No. 14 -08 was duly
passed and adopted at a regular meeting of the Tustin City Council, held on the 21St day of
January, 2014, by the following vote:
COUNCILPERSONS AYES:
COUNCILPERSONS NOES:
COUNCILPERSONS ABSTAINED:
COUNCILPERSONS ABSENT:
JEFFFRY (C. PARKER,
Murray, Puckett, Nielsen, Gomez, Bernstein (5)
None (0)
None (0)
None (0)
Attachment: First Amendment to the Public Works Agreement
Resolution No. 14 -08
Page 3 of 3
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978023.1
ATTACHMENT
FIRST AMENDMENT TO THE PUBLIC WORKS AGREEMENT
FIRST AMENDMENT TO THE PUBLIC WORKS AGREEMENT
SOUTH CENTRAL REDEVELOPMENT PROJECT
This FIRST AMENDMENT TO THE PUBLIC WORKS AGREEMENT
( "First Amendment ") is entered into as of this 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, a public
body corporate and politic ( "Successor Agency ").
RECITALS
A. By Ordinance No. 891 adopted on July 18, 1983, the City Council of the City
of Tustin adopted and approved a certain Redevelopment Plan ( "Redevelopment Plan ") for the
South Central Redevelopment Project (the "Project "); and
B. Pursuant to the Community Redevelopment Law of the State of California
(Health and Safety Code Section 33000 et seq.), the former Tustin Community Redevelopment
Agency ( "former Agency ") and then the Successor Agency have been carrying out the
Redevelopment Plan for the Project in the Redevelopment Project Area ( "Project Area "); and
C. In furtherance of the Project, the former Agency and the City entered into that
certain Public Works Agreement ( "Public Works Agreement ") under which the City caused the
installation and construction of certain street, utility and other public improvements and
facilities to serve the Project ( "Improvements ") as described in EXHIBIT `A' attached hereto
and incorporated herein, and the former Agency is obligated by such contract to pay the City
for the costs of such public improvements by periodic payments over a period of years
according to the terms of this Agreement; and
D. The former Agency and the City Council of the City found and determined that
the public improvements to be provided and thereafter provided pursuant to the Public Works
Agreement were of benefit to the Project Area and that no other reasonable means of financing
such improvements were available to the community; and
E. 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
F. Assembly Bill xl 26 ( "AB xl 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 xl 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
G. 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
H. 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
I. At the time of Dissolution, the City had made $38,254,807 in contracted public
improvements that the former Agency was obligated to reimburse under the Public Works
Agreement; and
J. In accordance with the Dissolution Act and in order to receive Redevelopment
Property Tax Trust Funds ( "RPTTF "), the Successor Agency submitted the Public Works
Agreement on a Recognized Obligation Payment Schedule ( "ROPS ") for approval by the State
of California Department of Finance ("DoF"); and
K. After approving the Public Works Agreement as an enforceable obligation and
authorizing funding therefor from RPTTF funds on the Successor Agency's first three
ROPS submittals (ROPS I, II and III), DoF denied the Public Works Agreement in the fourth
ROPS (ROPS 13 -14A), reversing its prior determinations that such contract is an enforceable
obligation and to be funded from RPTTF monies; and
L. On April 19, 2013, the Successor Agency requested and was granted a
"Meet and Confer" session with the DoF that occurred on May 1, 2013; and
M. After considering the Successor Agency's (and City's) documentation
supporting the Public Works Agreement as an enforceable obligation, DoF issued its decision
letter dated May 17, 2013 that denied funding pursuant to thereto, re- asserted its position
regarding ROPS 13 -14A that the Public Works Agreement is not an enforceable obligation and
indicated the Successor Agency could seek to reinstate the Public Works Agreement upon
receiving a Finding of Completion ( "Finding"); and
N. On May 10, 2013, the Successor Agency remitted what it believed to be its last
remaining unencumbered funds to the Orange County Auditor - Controller and on May 13,
2013, requested a Finding from DoF; and
O. 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
P. 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
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Relief' in the Superior Court, County of Sacramento, pursuant to the Dissolution Laws
( "Petition "); and
Q. 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 Public Works
Agreement originally entered into by and between the City of Tustin and the former Agency as
an enforceable obligation; and
R. Under the Dissolution Laws, by this First Amendment the Public Works
Agreement will be reinstated and re- established and thereafter will be submitted to the
Oversight Board for review and determination that such contract, as amended, is an enforceable
obligation and if approved then the matter will be submitted again to the DoF for review and
approval; and
S. This First Amendment sets forth the terms for repayment of the Public Works
Agreement as reinstated and re- established pursuant to a new, defined repayment schedule over
a reasonable term of years, which is set forth in EXHIBIT `B' attached hereto and fully
incorporated by this reference with interest accruing at the rate earned by funds deposited into
the Local Agency Investment Fund ( "LAIF ") pursuant to Section 34191.4 and other terms as
set forth hereinafter.
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 Original Public Works Agreement. The following sections
of the Original Public Works Agreement are hereby amended as follows:
a) Section 2. Payment b the Agency is hereby deleted in its entirety and
replaced as follows:
"In consideration of the undertakings of the City under Section 1 of this
Agreement, and after first making adequate provision for the annual payment
of principal and interest due on any bonds or other indebtedness of the former
Agency which may be incurred by the former Agency in carrying out the
Project and for which the annual tax allocations to the former Agency from the
Project ( "Tax Allocations ") are pledged or committed, the former Agency shall
reimburse the City for constructed improvements.
At the time of Dissolution, the Successor Agency owed the City $38,254,807 in
contracted improvements. Pursuant to the Dissolution Act, the Successor
Agency shall reimburse the City from Redevelopment Property Tax Trust
Funds ( "RPTTF ") allocated through the Recognized Obligation Payment
Schedule process. To date, the Successor Agency has reimbursed the City
$12,468,199 in RPTTF, leaving a principal and interest balance of $25,934,993.
Upon meeting the requirements outlined in Health and Safety Code ( "HSC ")
Section 34191.4(b)(2)(A), the Successor Agency will make five annual
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payments in the amount of $5,190,371. In the event the RPTTF received are
not sufficient to make a $5,190,371 payment, principal and interest balances
will be rolled over into subsequent payments. The attached payment schedule,
EXHIBIT `B', is in accordance with HSC Section 34191.4(b)(2), utilizing an
interest rate not to exceed the interest rate earned by funds deposited into the
Local Agency Investment Fund."
b) Section 4. Termination of Agreement is hereby deleted in its entirety
and replaced as follows:
"This Agreement and the obligations of the City and the Successor Agency
hereunder shall terminate with the improvements completed by the City at the
time of Dissolution and upon the Successor Agency completely paying off the
principal balance of $38,254,807 plus accrued interest."
2. Incorporation of Recitals. Each recital set forth above in this First Amendment
shall be deemed to be part of the Public Works Agreement as amended by this First
Amendment.
3. First Amendment. This First Amendment constitutes a part of the Public
Works Agreement and any reference to the Public Works Agreement shall be deemed to
include a reference to such Public Works Agreement as amended hereby.
4. Full Force and Affect. Except as otherwise amended previously and herein, all
terms, covenants, conditions and provisions of the Public Works Agreement shall remaining
full force and effect.
5. Loan for Legitimate Redevelopment Purpose; Submittal of First Amendment to
Oversight Board and DoF. The Successor Agency agrees to submit this First Amendment
(with copies of the original Public Works Agreement and attachments) to the Oversight Board
for its review, approval and determination that the Public Works Agreement and monies
advanced by the City to the Successor Agency occurred for legitimate redevelopment purposes,
specifically for public improvements of benefit to the Project Area. Thereafter, this First
Amendment shall be submitted to the DOF for its review and approval pursuant to the
Dissolution Laws.
6. Successor_ AR.encv to List First Amendment (and original Public Works
Agreement) as an Enforceable Obligation on Each ROPS until the Monies Advanced and
Loaned Are Repaid. The Successor Agency agrees to list this First Amendment (and original
Public Works Agreement) as an enforceable obligation on each ROPS during each six -month
fiscal period until repaid in full pursuant to the provisions of the Dissolution Laws. This first
ROPS to so list this Agreement will be ROPS 14 -15A for the six -month fiscal period of July 1,
2014 to December 31, 2014.
[signatures on next page]
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IN WITNESS WHEREOF, the City and the Successor Agency have executed the
First Amendment to the Public Works Agreement as of the Effective Date,
CITY:
CITY OF TUSTIN, a California municipal
corporation
By:
Elwyn A. Murray, Mayor
ATTEST:
CITY CLERK
By:
Jeffrey C. Parker
APPROVED AS TO FORM:
By:
David E. Kendig,
City Attorney
SUCCESSOR AGENCY:
SUCCESSOR AGENCY TO TUSTIN
COMMUNITY REDEVELOPMENT
AGENCY, a public body corporate and politic
By:
Elwyn A. Murray, Chair
ATTEST:
CITY CLERK TO SUCCESSOR AGENCY
By:
Jeffrey C. Parker
APPROVED AS TO FORM:
By:
Celeste Brady
Successor Agency Special Counsel
Attachments: EXHIBIT `A' — South Central Project Area Critical Public Improvements and
Facilities
EXHIBIT `B' — Public Works Agreement Payment Schedule
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EXHIBIT ` A'
SOUTH CENTRAL PROJECT AREA
CRITICAL PUBLIC IMPROVEMENTS AND FACILITIES
Project Description:
Extension of Newport Avenue south, under an existing
County flood control channel. The project will include
and off ramp configuration for Newport Avenue and
relocation and improvement to water and other utilitie s
improvements to Edinger Avenue.
Estimated Project Costs:
Newport Avenue Extension
SR -55 Freeway Ramps
Utility and Storm Drain
Upgrade Relocation
Edinger Avenue Improvements
A -1
railroad right of way and
the constructi on of new on
the SR -55 Freeway; the
and storm drains and other
$18,300,000
4,700,000
4,200,000
6.300.000
$33,500,000
EXHIBIT `B'
PAYMENT SCHEDULE
(attached)
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A -1
M
EXHI
Public Works Agreement Calculations
Estimated Amount $38,254,807
LAIF Quarterly Apportionment Rates
Payment Amount Balance Interest Calcs Payment Date Notes
ROPS 1 (Jan - Jun 2012) $8,558,775 $29,696,032 $68,132.44 06/01/2012 6 months interest ( 5 month w/ balance
$38M & 1 month w/ balance $29M)
ROPS 2 (Jul - Dec 2012) $1,954,712 $27,809,452 $46,580.83 12/31/2012 6 months interest
ROPS 3 (Jan - Jun 2013) $1,954,712
ROPS 13/14A (Jul - Dec 2013) $0
ROPS 13/14B (Jan - Jun 2014)
$25,901,321 $33,671.72 01/01/2013 6 months interest
$25,934,993
Principal
Interest Rate
March
June
September
December
Annual Average
Jan - June AVG
Sept - Dec A
2010
0.56
0.56
0.51
0.46
0.52
0.56
0.485
2011
0.51
0.48
0.38
0.38
0.44
0.495
0.38
2012
0.38
0.36
0.35
0.32
0.35
0.37
0.335
2013
0.28
0.24
0.26
0.26
0.26
026
Payment Amount Balance Interest Calcs Payment Date Notes
ROPS 1 (Jan - Jun 2012) $8,558,775 $29,696,032 $68,132.44 06/01/2012 6 months interest ( 5 month w/ balance
$38M & 1 month w/ balance $29M)
ROPS 2 (Jul - Dec 2012) $1,954,712 $27,809,452 $46,580.83 12/31/2012 6 months interest
ROPS 3 (Jan - Jun 2013) $1,954,712
ROPS 13/14A (Jul - Dec 2013) $0
ROPS 13/14B (Jan - Jun 2014)
$25,901,321 $33,671.72 01/01/2013 6 months interest
$25,934,993
Principal
Interest Rate
$25,934,993
0.26%
Payment Schedule
Principal
Interest
Total
1
FY 14/15
$5,184,751
$5,619
$5,190,371
2
FY 15/16
$5,185,875
$4,496
$5,190,371
3
FY 16/17
$5,186,998
$3,372
$5,190,371
4
FY 17/18
$5,188,122
$2,248
$5,190,371
5
FY 18/19
$5,189,246
$1,124
$5,190,371