HomeMy WebLinkAboutCC RES 14-09RESOLUTION NO. 14 -09
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
TUSTIN, CALIFORNIA, 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 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 February 1, 2012 under the dates in
the Dissolution Act that were reformed and extended thereby ( "Supreme Court
Decision "); and
E. The Agency is now a dissolved community redevelopment agency pursuant to
the Dissolution Act; and
F. 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
G. 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
Resolution No. 14 -09
Page 1 of 3
H. In accordance with the Dissolution Act , 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
DoF denied the Working Capital Loan, stating that it is not an enforceable
obligation and indicated the Successor Agency could seek to reinstate the
Working Capital Loan upon receiving a Finding of Completion ( "Finding "); and
J. 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
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 Sacramento County; and
M. The City has determined it is necessary and appropriate to amend and reinstate
the Working Capital Loan entered into by and between the City of Tustin and the
former Tustin Community Redevelopment Agency as an enforceable obligation;
and
N. 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 State of California Department of Finance approval.
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 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 City Council authorizes the Mayor to execute the First
Amendment to the Working Capital Loan and Administrative Services Agreement, in
substantially the form attached to Resolution 14 -09.
Resolution No. 14 -09
Page 2 of 3
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.
PASSED AND ADOPTED at a regular meeting of the Tustin City Council held on
the 21 st day of January, 2014. _ q
ELWYN AMU
Mayor
ATTEST:
JEFFR ARKER,
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 -09 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: Murray, Puckett, Nielsen, Gomez, Bernstein (5)
COUNCILPERSONS NOES: None (0)
COUNCILPERSONS ABSTAINED: None (0)
COUNCILPERSONS ABSENT: None (0)
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Attachment: First Amendment to the Working Capital Loan and Administrative
Services Agreement
Resolution No. 14 -09
Page 3 of 3
ATTACHMENT
FIRST AMENDMENT TO THE WORKING CAPITAL LOAN
AND ADMINISTRATIVE SERVICES AGREEMENT
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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
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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.
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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
An
Jeffrey C. Parker
APPROVED AS TO FORM:
in
David E. Kendig,
City Attorney
ATTEST:
CLERK TO SUCCESSOR AGENCY
:
Jeffrey C. Parker
CITY:
CITY OF TUSTIN, a California municipal
corporation
In
Elwyn A. Murray, Mayor
SUCCESSOR AGENCY:
SUCCESSOR AGENCY TO TUSTIN
COMMUNITY REDEVELOPMENT AGENCY,
a public body corporate and politic
By:
Elwyn A. Murray, Chair
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APPROVED AS TO FORM:
Celeste Brady
Successor Agency Special Counsel
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Attachment: EXHIBIT 'A' — Working Capital Loan Payment Schedule
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City /Agency
Loan
Original Principal
4,650,000
Interest (LAIF)
0.26%
- Qtr end: Sept 2013
Original terms /year
5
Future FY Activity
Fiscal Year
Principal
Interest
Payment to City
Ending Principal After FY
2014 -2015
X975,1 77p
($12,090)
93 7,2167)
$3,724,823.44
2015 -2016
($927,582)
($9,685)
($937,267)
$2,797,241.43
2016 -2017
($929,994)
($7,273)
($937,267)
$1,867,247.70
2017 -2018
($932,412)
($4,855)
($937,267)
$934,835.98
2018 -2019
($934,836)
($2,431)
($937,267)
$0.00
Total:
($4,650.000)
($36,333)
1 ($4,686,333)
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