HomeMy WebLinkAbout14-12 (Amended/Reinstated Public Works Agmt.)OVERSIGHT BOARD RESOLUTION NO. 14-12
A RESOLUTION OF THE OVERSIGHT BOARD OF THE
SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY
REDEVELOPMENT AGENCY RECONSIDERING,
AFFIRMING AND RATIFYING THE AMENDED AND
REINSTATED PUBLIC WORKS AGREEMENT BETWEEN
THE CITY OF TUSTIN AND THE SUCCESSOR AGENCY
TO THE TUSTIN COMMUNITY REDEVELOPMENT
AGENCY
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. 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 ( "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
Oversight Board Resolution 14 -12
Page 1 of 5
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
J. Section 34177(1) 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 34191.4(b) authorizes the City and Successor Agency to reestablish prior
loan agreements between the City and the former Agency; and
L. 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
M. The Public Works Agreement required the Agency to reimburse the City for
infrastructure improvements constructed as part of the Newport Avenue Extension
Project; and
N. 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
O. 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
P. 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
Q. 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
R. In response, the City, the Successor Agency and the Tustin Housing Authority filed a
"Petition for Writ of Mandate and Complaint for Declaratory and Injunctive Relief'
with the Superior Court of the State of California in Sacramento County; and
S. The City and Successor Agency have determined it is necessary and appropriate to
amend and reinstate the Public Works Agreement originally entered into by and
Oversight Board Resolution 14 -12
Page 2 of 5
between the City of Tustin and the former Tustin Community Redevelopment
Agency on June 2, 1993, as an enforceable obligation; and
T. On January 28, 2014, the Oversight Board duly considered all other related matters
and found the Amended Public Works Agreement were for legitimate redevelopment
purposes and deemed the Amended Public Works Agreement an enforceable
obligation by adopting Oversight Board Resolution No. 14 -03; and
U. On February 20, 2014, the DoF did not approve Oversight Board Resolution No. 14-
03 and returned it to the Oversight Board for reconsideration when the Successor
Agency receives the Finding; and
V. 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, nunc pro tunc as of May 15, 2013; and
W. On April 29, 2014, the Oversight Board reconsidered Oversight Board Resolution
No. 14 -03 and adopted Oversight Board Resolution No. 14 -08, affirming and
ratifying the previously approved Amended Public Works Agreement and 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
X. Also, by this Oversight Board Resolution No. 14 -08 reaffirmed that the Amended
Public Works Agreement was entered into for legitimate redevelopment purposes,
that the Agreement, as amended and reinstated, is an enforceable obligation; and
Y. On May 14, 2014, DoF did not approve Oversight Board Resolution No. 14 -08, citing
Section 34191.4(b)(1) which specifically states that loan agreements between the
agency and the city that created it shall be deemed enforceable obligations provide
that the Oversight Board makes a finding that the loan was for legitimate
redevelopment purposes. However, DoF determined that without the original
executed loan agreement it was unclear how the Oversight Board could make the
finding that the loan was for legitimate redevelopment purposes. Furthermore, DoF
determined the Public Works Agreement is a reimbursement agreement, not a loan
agreement; and
Z. The Oversight Board has reconsidered the Amended Public Works Agreement and
determined Unexecuted Agreements with Minutes documenting approval actions by
the governing boards are considered enforceable contracts by the courts and, as
such, the Amended Public Works Agreement should be recognized as an
enforceable contract; and
AA. The Oversight Board has reconsidered the Amended Public Works Agreement
and has determined the Agreement is a loan as defined by all standards of
acceptable legal and business practice and the loan was for legitimate
redevelopment purposes; and
Oversight Board Resolution 14 -12
Page 3 of 5
BB. The Oversight Board has determined reaffirming and re- ratifying the previously
approved Amended Public Works Agreement 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 and reinstated Amended Public Works Agreement as an
enforceable loan agreement in accordance with Section 34191.4(b)(1), 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.
APPROVED AND ADOPTED this 24"' day pf June, 2014.
Doug DavefV Chairman
Oversight and of the Successor Agency to
the Tustin VC mmunity Redevelopment Agency
ATTEST:
t�
Charles E. "Chuck' Puckett, Secretary
Oversight Board of the Successor Agency to
the Tustin Community Redevelopment Agency
Oversight Board Resolution 14 -12
Page 4 of 5
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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 -12 was duly passed and adopted at a regular meeting
of the Oversight Board, held on the 24"' day of June, 2014, by the following vote:
BOARD MEMBER AYES: Davert, Fitzsimons, Bernstein
Puckett Soria West (6)
BOARD MEMBER NOES: None (0 )
BOARD MEMBER ABSTAINED: None (0 )
BOARD MEMBER ABSENT: Nielsen (1 )
Charles E. "Chuck" Puckett, Secretary
Oversight Board of the Successor Agency to
the Tustin Community Redevelopment Agency
Attachment No. 1 — First Amendment to the Public Works Agreement
Oversight Board Resolution 14 -12
Page 5 of 5
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ATTACHMENT NO. 1
FIRST AMENDMENT TO THE PUBLIC WORKS AGREEMENT
[Attached]
FIRST AMENDMENT TO THE PUBLIC WORKS AGREEMENT
SOUTH CENTRAL REDEVELOPMENT PROJECT
This FIRST AMENDMENT TO THE PUBLIC WORKS AGREEMENT
( "First Amendmenf) 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 poll tic ( "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 pert, 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 xI 26, the Malosantos
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 taking 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 538,254,807 in contracted public
improvements that the farmer 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
ROPE submittals (ROPS 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 RPT7F 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 I3 -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
2
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.
"In consideration of the undertakings of the City under Section I 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
512,468,199 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
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,
EXIIIBTT 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 Aiement 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."
Q
loaned Are Reoaid. The Successor Agency agrees to list this First Amendment (and original
Public Works Agreement) as an enforceable obligation on each RAPS during each six -month
fiscal period until repaid in full pursuant to the provisions of the Dissolution Laws. This first
ROPE 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 OFyTUSTIN,,.-,p�,jCalifomia municipal
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Agency
SUCCESSOR AGENCY:
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AGENCY TO TUSTIN
and politic
Attachments: EXHIBIT 'A' — South Central Project Area Critical Public Improvements and
Facilities
EXMI T 'B' — Public Works Agreement Payment Schedule
EXHIBIT 'A'
SOUTH CENTRAL PROJECT AREA
CRITICAL PUBLIC IMPROVEMENTS AND FACILITIES
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
relocstionand 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
KIM
$18,300,000
4,"700,000
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EXH]Brr'B'
PAYMENT SCHEDULE
(attached)
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