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Home My WebLink About05 TOWN CENTER DEFICIT REDUCTION PLAN REPAYMENT SCHEDULE Agenda Item ___5___ AGENDA REPORT Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency MEETING DATE: APRIL 29, 2014 SUBJECT/ACTION: ADOPT OVERSIGHT BOARD RESOLUTION NO. 14-09, APPROVING THE TOWN CENTER HOUSING DEFICIT REDUCTION PLAN REPAYMENT SCHEDULE RECOMMENDATION / PROPOSED ACTION In accordance with California Health and Safety Code Section 34171(d)(G), it is recommended the Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency adopt Oversight Board Resolution No. 14-09, approving the repayment schedule for the former Town Center Redevelopment Project Area’s Housing Deficit Reduction Plan, 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 Department of Finance (“DoF”) and the expiration of five (5) business days pending a request for review by DoF within the time periods set forth in the Dissolution Law. In this regard, if 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.) BACKGROUND On May 1, 2000, the former Tustin Community Redevelopment Agency (“former Agency”) approved and adopted Resolution No. RDA 00-4, the Housing Deficit Reduction Plan (“Housing Deficit Plan”) for the former Town Center Redevelopment Project Area (Town Center). The Housing Deficit Plan was developed in accordance with Section 33334.6 of the California Community Redevelopment Law (CRL). Originally, the former Agency approved the Housing Deficit Plan on February 1, 1993. The Housing Deficit Plan was for the repayment of $2,776,042 in deferred deposits to the Housing Fund for Town Center from 1986/87 to 1992/93 pursuant to CRL Section 33334.6(d). Town Center, adopted in 1976, was not subject to setting aside 20% of the tax increment received into a Housing Fund until the passage of legislation in 1985. The legislation provided a grace period wherein the Agency was able to defer deposits into Agenda Report April 29, 2014 Page 2 the Housing Fund to allow it to fund the completion of pre-existing plans, programs and activities. The Agency elected to defer deposits to the Housing Fund for Town Center from 1986-87 to 1991-92, resulting in a deficit of $2,776,042. Economic conditions impacted the 1993 Housing Deficit Plan, which resulted in the May 1, 2000 Housing Deficit Plan. The 2000 Housing Deficit Plan projected the first payments occurring in 2013-14. With the dissolution of Redevelopment and winding down of activities, it became necessary to schedule repayment to the Housing Fund prior to 2013-14. On May 25, 2012, the DoF approved the Second Amended Initial Recognized Obligation Payment Schedule (“Second Amended Initial ROPS”) for the period of January - June 2012 and the First Amended Second Recognized Obligation Payment Schedule (“First Amended Second ROPS”) for the period of July - December 2012. The Housing Deficit Reduction Plan payment was listed as an enforceable obligation in each ROPS. On May 29, 2012, the Oversight Board reaffirmed the repayment schedule as adopted by the Oversight Board in approving each ROPS. The approved repayment schedule over three Fiscal Years: FY 2011-12; 2012-13; and 2013-14, was as follows: ROPS Period Amount Initial ROPS Jan – June 2012 $900,000 2 nd ROPS July – Dec 2012 $900,000 4 th ROPS July – Dec 2013 $976,042 TOTAL $2,776,042 The first payment was received for the Second Amended Initial ROPS and second payment was received for the First Amended Second ROPS. After the Orange County Auditor-Controller distributed the Redevelopment Property Tax Trust Funds in accordance with the DoF-approved ROPS, the State Legislature passed Assembly Bill 1484 (“AB 1484”). AB 1484 appeared to link Housing Deficit Plan payments to the Finding of Completion and, as a result, the Successor Agency did not submit a payment request during FY 2013-14. With their April 11, 2014, letter, DoF took that position by stating our ROPS 14-15A Housing Deficit Plan payment request was denied since the Successor Agency has not received the Finding of Completion. On April 7, 2014, the Superior Court of California ruled in Tustin’s favor that the DoF erred in refusing to issue to Tustin its Finding of Completion after the due diligence payments were made in May 2013. The Court ordered a Writ of Mandate (“Writ”) compelling the DoF to issue a finding of completion under section 34179.7 be prepared and it is anticipated the Writ will be signed in the next several days. In anticipation of DoF issuing the Finding of Completion, the Successor Agency has requested a “Meet Agenda Report April 29, 2014 Page 3 and Confer” session with DoF to appeal their decision on our Housing Deficit Plan payment. In preparation for the “Meet and Confer”, it is necessary for the Oversight Board to adopt Oversight Board Resolution No. 14-09, approving the repayment schedule for the former Town Center Redevelopment Project Area’s Housing Deficit Reduction Plan, reflecting the change in payment periods from FY 2013-14 to FY 2014- 15. Staff does note that depending on the final form of the Writ to be signed by the Court and the date that the Finding will be deemed to have been issued, it may be necessary to bring this repayment schedule back again to the Oversight Board for more action. The Housing Deficit Plan balance is $976,042. Payment is in accordance with HSC Section 34191.4(b)(2)(A) and will be deposited into the Low and Moderate Income Housing Asset Fund. The proposed repayment schedule is as follows: ROPS Period Amount ROPS 14-15A July – Dec 2014 $976,042 Staff is available to answer any questions. Attachment: Oversight Board Resolution No. 14-09 OVERSIGHT BOARD RESOLUTION NO. 14-09 A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY APPROVING THE AMENDED TOWN CENTER HOUSING DEFICIT REDUCTION PLAN REPAYMENT SCHEDULE The Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency finds, determines and declares as follows: A. The City of Tustin (“City”) is a municipal corporation organized and operating under the laws of the State of California; and B. 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, (“CRL”); and et seq. C. 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 , ., Case No. S194861, which laws and court Association, et al. v. Ana Matosantoset al 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 and subsequent legislation (together AB x126, the Matosantos Decision, and subsequent legislation are referred to as the “Dissolution Law”). All statutory references herein are to the Health and Safety Code of the Dissolution Laws unless otherwise stated; and D. As of February 1, 2012 the former Agency was dissolved pursuant to the Dissolution Law 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 E. 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 F. Section 34177(a) permits the Successor Agency to make payments due for enforceable obligations; and G. Section 34177(l) requires the Successor Agency to prepare a Recognized Obligation Payment Schedule (“ROPS”) before each six-month fiscal period that lists its Enforceable Obligations; and Oversight Board Resolution 14-09 Page 1 of 4 H. Section 34171(d)(1)(G) defines funds borrowed from the Low and Moderate Income Housing Fund of a redevelopment agency, which had been deferred, as an enforceable obligation, provided the repayment schedule has been approved by the Oversight Board; and I. From Fiscal Years 1986/87 to 1992/93, $2,776,042 in Low and Moderate Income Housing Funds were deferred from the Town Center Redevelopment Project Area pursuant to California Redevelopment Law; and J. On May 1, 2000, the former Agency adopted Resolution No. RDA 00-4, approving the Town Center Housing Deficit Reduction Plan (“Housing Deficit Plan”), which projected the first payments occurring in 2013-14; and K. The dissolution of Redevelopment made it necessary to schedule repayment prior to 2013-14; and L. On May 29, 2012, the Oversight Board reaffirmed the Housing Deficit Plan repayment schedule and amounts which were approved by DoF and the Successor Agency received repayment during the distribution of Redevelopment Property Tax Trust Funds from the Orange County Auditor-Controller as listed on the Second Amended First ROPS and First Amended Second ROPS; and M. On February 25, 2012, the Oversight Board adopted Oversight Board Resolution No. 14-05, approving ROPS 14-15A, including the final payment of $976,042 against the Housing Deficit Plan; and N. On April 11, 2014, DoF did not approve the final payment, stating the Successor Agency did not have a Finding of Completion and the schedule needs to be approved by the Oversight Board; and O. The Superior Court, County of Sacramento has issued its ruling in the Petition Case No. 34-2013-80001623 under which a Writ will mandate the State Department of Finance (“DoF”) to issue the Successor Agency its Finding of Completion, which is expected to be issued as of May 2013; and nunc pro tunc P. In light of the pending Finding, the Oversight Board has determined amending and approving the previously approved Housing Deficit Plan repayment schedule is in the best interest of the City and Successor 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. Pursuant to Section 34171(d)(1)(G) of the Dissolution Law, the Oversight Board reaffirms the previously approved repayment schedule and approves the amended Oversight Board Resolution 14-09 Page 2 of 4 repayment schedule for the Housing Deficit Plan included hereto as Attachment No. 1 and incorporated herein. Section 3. The Oversight Board authorizes the Successor Agency to transmit this Resolution to the DoF. Section 4. The Executive Director of the Successor Agency or his authorized designee is directed to post this Resolution on the City/Successor Agency website. Section 5. This Resolution shall be effective after transmittal of this Resolution to DoF and the expiration of five (5) business days pending a request for review by DoF within the time periods set forth in the Dissolution Law. In this request, if 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. Section 6. The Secretary of the Oversight Board shall certify to the adoption of this Resolution. th APPROVED AND ADOPTED this 29 day of April, 2014. Doug Davert, Chairman Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency ATTEST: Charles E. “Chuck” Puckett, Secretary Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency Oversight Board Resolution 14-09 Page 3 of 4 STATE OF CALIFORNIA ) COUNTY OF ORANGE )SS CITY OF TUSTIN ) I, CHARLES E. “CHUCK’ PUCKETT, 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. 14-09 was duly passed and adopted at a regular meeting of the th Oversight Board, held on the 29 day of April, 2014, by the following vote: BOARD MEMBER AYES: ________________________________ BOARD MEMBER NOES: ________________________________ BOARD MEMBERS ABSTAINED: ________________________________ BOARD MEMBERS ABSENT: ________________________________ _____________________________ Charles E. “Chuck” Puckett, Secretary Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency Attachment No. 1 – Town Center Housing Deficit Reduction Plan Repayment Schedule Oversight Board Resolution 14-09 Page 4 of 4 ATTACHMENT NO. 1 TOWN CENTER HOUSING DEFICIT REDUCTION PLAN REPAYMENT SCHEDULE ROPS Period Amount ROPS 14-15A July – Dec 2014 $976,042