HomeMy WebLinkAboutFirst Amendment to Public Works AgreementFIRST 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 xI 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, el al. v. Ana Matosantos, el al., Case No. 5194861 (" 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
1. 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 (BOPS I, II and III), DoF denied the Public Works Agreement in the fourth
ROPS (BOPS 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
0. 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
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 Aereement. The following sections
of the Original Public Works Agreement are hereby amended as follows:
a) Section 2. Payment by 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 V, 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 P=ose* 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.
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.
Isignatures 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.
ATTEST:
CITY CL.
M
FMI
David E. Kendig,
City Attorney
CITY:
CITY OFAUSTIN,&ICalifornia municipal
0
ATTEST:
CITY CLE O SUCCES�SO GENCY
V. � '
Jeffrey C. Parker
is
APPROVED AS`tOkFORM:
2
Agency
Mayor
SUCCESSOR AGENCY:
SUCCESSOR AGENCY TO TUSTIN
0
is Jr6� 4orporate and politic
Elwyn A( Murray, Chair
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 FACIL=S
Project Description:
Extension of Newport Avenue south, under an existing railroad right of way and
County flood control channel. The project will include the construction ofa new on
and off ramp configuration for Newport Avenue and the SR-55 Freeway; the
relocationand improvement to water and other utilities and storm drains and other
improvements to Edinger Avenue.
Estimated Project Costs:
Newport Avenue Extension
SR -55 Freeway Ramps
Utility and Storm Drain
Upgrade Relocation
Edinger Avenue Improvements
FIV
S I (;,'100,000
4,700,000
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EXITIBIT 'I3'
PAYMENT SCIDMULL
(attached)
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