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HomeMy WebLinkAbout04 HOUSING DEFICIT REDUCTION AGENDA REPORT Oversight Board of the Successor Agency to the Tustin Community Redevelopment Agency MEETING DATE: JUNE 24, 2014 SUBJECT/ACTION: ADOPT OVERSIGHT BOARD RESOLUTION NO. 14-13, RECONSIDERING AND APPROVING THE AMENDED 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. 14-13, reconsidering 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 Agenda Report June 24, 2014 Page 2 legislation provided a grace period wherein the Agency was able to defer deposits into 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 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 had not received the Finding of Completion and the schedule needed to be approved by the Oversight Board. On April 24, 2014, the Court issued a Writ mandating DoF to issue the Successor Agency its Finding of Completion, nunc pro tunc as of May 15, 2013. On April 29, 2014, the Oversight Board adopted Oversight Board Resolution No. 14-09, approving the amended Housing Deficit Plan. On May 14, 2014, DoF did not approve Oversight Board Resolution No. 14-09, citing Section 34189, which according to their opinion renders the obligation inoperative. In citing Section 34189, DoF ignores the obligation as it is required in Sections 34171(d)(1)(G), 34176(e)(6) and 34191.4(b)(2)(A). It should also be noted that in their denial letter dated April 11, 2014, DoF did not deny the obligation as inoperative but rather denied the obligation for failing to complete the steps outlined in Sections Agenda Report June 24, 2014 Page 3 34171(d)(1)(G), 34176(e)(6) and 34191.4(b)(2)(A). As authorized by Section 34179(h), DoF returned the Oversight Board action to the Oversight Board for reconsideration. Pursuant to Section 34179(h), the Oversight Board has reconsidered the Amended Housing Deficit Plan and has determined it is an enforceable obligation and eligible for payment under the ROPS as outlined under Sections 34171(d)(1)(G), 34176(e)(6) and 34191.4(b)(2)(A). In addition, the Oversight Board has determined submission of the previously approved and amended Housing Deficit Plan to DoF is in the best interest of the City and Successor Agency and in accord with the public purposes and provisions of applicable state and local laws and requirements. A copy of the amended Housing Deficit Plan is attached to Oversight Board Resolution No. 14-13. Staff is available to answer any questions the Oversight Board may have. Attachment: Oversight Board Resolution No. 14-13 OVERSIGHT BOARD RESOLUTION NO. 14-13 A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY RECONSIDERING AND 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 former Tustin Community Redevelopment Agency (“Agency”) was a community redevelopment agency previously organized and existing under the California Community Redevelopment Law, Health and Safety Code Sections 33000, et seq. (“CRL”) and prior to its dissolution was 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; 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 Law”); and D. On December 29, 2011, in the petition California Redevelopment Association, et al v. (“Matosantos Decision”), the California Supreme Court upheld the Ana Matosantos, et al 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 (“Supreme Court Decision”); and E. 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 F. 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 G. Pursuant to Section 34179, the Successor Agency’s Oversight Board has been formed and the initial meeting occurred on March 13, 2012; and H. Section 34179(e), as amended by Assembly Bill 1484 (“AB 1484”), requires all actions taken by the Oversight Board to be adopted by resolution; and I. Section 34177(a) permits the Successor Agency to make payments due for enforceable obligations; and Oversight Board Resolution 14-13 Page 1 of 4 J. 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 K. 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 L. 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 M. 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 N. The dissolution of Redevelopment made it necessary to schedule repayment prior to 2013-14; and O. 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 P. 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 Q. 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 R. On April 24, 2014, the Superior Court, County of Sacramento issued its ruling in the Petition Case No. 34-2013-80001623 under which a Writ mandated the State Department of Finance (“DoF”) to issue the Successor Agency its Finding of Completion, as of May 15, 2013; and nunc pro tunc S. On April 29, 2014, the Oversight Board adopted Oversight Board Resolution No. 14-09, approving the amended Housing Deficit Plan and determined submission to DoF was 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; and T. On May 14, 2014, DoF did not approve Oversight Board Resolution No. 14-09, citing Section 34189, which in their opinion rendered the obligation inoperative; and Oversight Board Resolution 14-13 Page 2 of 4 U. The Oversight Board has reconsidered the Housing Deficit Plan and has determined the obligations are enforceable as defined under Sections 34171(d)(1)(G), 34176(e)(6) and 34191.4(b)(2)(A); and V. The Oversight Board has determined reaffirming and re-ratifying the previously approved Housing Deficit Plan and submission to DoF is in the best interest of the City and 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. The Oversight Board, in reconsideration, reaffirms and ratifies the previously approved Housing Deficit Plan, in accordance with Sections 34171(d)(1)(G), 34176(e)(6) and 34191.4(b)(2)(A), attached hereto as Attachment No. 1 and incorporated herein, and further authorizes the Successor Agency to transmit this Resolution to the State Department of Finance (“DoF”). Section 3. The Executive Director of the Successor Agency or his authorized designee is directed to post this Resolution on the City/Successor Agency website. Section 4. 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 Assembly Bill No. 1484. 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 5. The Secretary of the Oversight Board shall certify to the adoption of this Resolution. th APPROVED AND ADOPTED this 24 day of June, 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 14-13 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. 14-13 was duly passed and adopted at a regular meeting of the th Oversight Board, held on the 24 day of June, 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 14-13 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