HomeMy WebLinkAbout14-14 (Bond Proceeds Expenditure Agmt.)OVERSIGHT BOARD RESOLUTION NO. 14 -14
A RESOLUTION OF THE OVERSIGHT BOARD OF THE
SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY
REDEVELOPMENT AGENCY APPROVING THE BOND
PROCEEDS EXPENDITURE 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 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
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 No.
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 34191.4(c) of the Dissolution Law allows a successor agency that has
received a Finding of Completion ( "Finding ") to use bond proceeds from bonds
issued prior to 2011 for the purposes for which the bonds were sold, provides that
such proceeds in excess of amounts needed to satisfy approved enforceable
obligations shall be expended in a manner consistent with the original bond
covenants, and further provides that such expenditures shall constitute "excess bond
proceeds obligations" that shall be listed separately on the successor agency's
Recognized Obligation Payment Schedule ( "ROPS "); and
I The Successor Agency received the Finding from the State of California Department
of Finance on May 1, 2014, dated and effective nunc pro tunc as of May 15, 2013,
as ordered by the Honorable Timothy M. Frawley, Sacramento Superior Court, State
of California in the petition titled Successor Agency to the Tustin Community
Redevelopment Agency, et al. v. Ana J. Matosantos, et al., Case No. 34 -2013-
80001623 ( "Petition "); and
K. The CRL pre - dissolution provided for, and the Dissolution Law post - dissolution
continues to provide for, a cooperative relationship between sponsoring cities and
their redevelopment agencies, as well as their successor agencies who have
assumed the duties and obligations of the former redevelopment agencies. Under
CRL Section 33220, a city may aid and cooperate in the planning, undertaking,
construction, or operation of redevelopment projects. CRL Section 33220(e)
specifically authorizes a city to enter into an agreement with its redevelopment
agency or any other public entity to further redevelopment purposes. Section
34178(a) of the Dissolution Law allows a successor agency and its sponsoring city
to enter into agreements, subject to Oversight Board approval under Section
34180(h) of the Dissolution Law; and
L. The Successor Agency has and will have proceeds ( "Excess Bond Proceeds ") of its
Tustin Community Redevelopment Agency Tax Allocation Bonds (MCAS- Tustin
Redevelopment Project Area) Series 2010 ( "MCAS Bonds ") that are not otherwise
obligated for a project or other enforceable obligation; and
M. The Successor Agency desires to transfer its Excess Bond Proceeds to the City to
enable the City to use such Excess Bond Proceeds in a manner consistent with the
covenants of the MCAS Bonds and to undertake projects and programs that were
not previously funded and obligated by the former Agency pre - dissolution or by the
Successor Agency post - dissolution, or by the City pre- or post - dissolution. The City
has adopted a spending plan ( "Bond Spending Plan ") for using such Excess Bond
Proceeds to advance the City's community development goals while maximizing
fiscal and social benefits flowing to the affected taxing entities from successful
development. The City Council and Successor Agency Board have found that the
use of Excess Bond Proceeds are in accordance with the Bond Spending Plan to
fund various capital improvements within and outside the former MCAS Tustin
Oversight Board Resolution No. 14 -14
Page 2 of 5
Redevelopment Project Area, including those that are contained in the Tustin
Legacy Backbone Infrastructure Program established by the City, and are in
accordance with CRL Sections 33445, 33445.1, and 33679 and other applicable law;
and
N. In order to facilitate the use of Excess Bond Proceeds consistent with all applicable
bond covenants, the Successor Agency and the City have negotiated this
Agreement requiring the transfer of current and future excess bond proceeds by the
Successor Agency to the City, and the City's agreement to use such proceeds
consistent with all applicable covenants, conditions, restrictions and obligations
under the MCAS Bonds. The parties intend that this Agreement shall constitute an
excess bond proceeds obligation within the meaning of Section 34191.4(c)(2)(A) of
the Dissolution Law to be paid from Excess Bond Proceeds. With Oversight Board
approval, the Successor Agency will list this Agreement, and the requirement to
transfer Excess Bond Proceeds herein, on its ROPS 14 -15B for January 1, 2015
through June 30, 2015 as an obligation to be funded with Excess Bond Proceeds,
and as and if applicable on successive ROPS if required by the Dissolution Law; and
O. The Oversight Board has determined that the expenditure of Excess Bond Proceeds
in accordance with this Agreement will benefit the affected taxing entities; and
P. The Oversight Board has duly considered all other related matters and has
determined that the approval of the Bond Proceeds Expenditure Agreement and
submission to the California Department of Finance are 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. The Oversight Board approves the Bond Proceeds Expenditure
Agreement attached hereto as Attachment No. 1 and incorporated herein, and further
authorizes the Successor Agency to transmit this Resolution to the County Auditor -
Controller, the State Department of Finance ( "DoF "), and the State Controller's Office.
Section 3. The City Manager 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 the
DoF and the expiration of five (5) business days pending a request for review by the
DoF within the time periods set forth in Assembly Bill No. 1484. In this regard, if the
DoF requests review hereof, the DoF will have 40 days from the date of its request to
Oversight Board Resolution No. 14 -14
Page 3 of 5
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 the DoF.
Section 5. The Secretary of the Oversight Board shall certify to the adoption of this
Resolution.
APPROVED AND ADOPTED this 24"' day, of June, 2014.
Doug DayVrt, Chairman
Oversight/Board of the Successor Agency to
the Tustin Community Redevelopment Agency
ATTEST:
zt
Charles E. "Chuck" Puckett, Secretary
Oversight Board of the Successor Agency to
the Tustin Community Redevelopment Agency
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 -14 was duly passed and adopted at a regular meeting
of the Oversight Board, held on the 24th 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 — Bond Proceeds Expenditure Agreement
Oversight Board Resolution No. 14 -14
Page 4 of 5
ATTACHMENT NO. 1
BOND PROCEEDS EXPENDITURE AGREEMENT
(attached)
Oversight Board Resolution No. 14 -14
Page 5 of 5
BOND PROCEEDS EXPENDITURE AGREEMENT
This BOND PROCEEDS EXPENDITURE AGREEMENT ( "Agreement") is entered into
as of June 24, 2014, by and between the CITY OF TUSTIN, a California municipal corporation
( "City"), and the SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY
REDEVELOPMENT AGENCY, a public body corporate and politic pursuant to Parts 1.8 and 1.85
of Division 24 of the California Health & Safety Code ( "Successor Agency ").
I:I9[yYll:�i�9
A. The City is a municipal corporation organized and operating under the laws of the
State of California.
B. The Successor Agency is a public body, corporate and politic, organized and
operating under Part 1.85 of Division 24 of the Dissolution Law (as defined in Recital D below).
C. The Tustin Community Redevelopment Agency ( "former Agency ") previously was a
California public body, corporate and politic, duly formed by the City Council of the City
( "City Council ") and was organized, existed and exercised the powers of a community
redevelopment agency under the California Community Redevelopment Law, Health and Safety
Code Section 33000, et seq. ( "CRL ").
D. Assembly Bill xl 26 ( "AB xl 26 "), effective on June 28, 2011, added Parts 1.8 and
1.85 to Division 24 of the California Health and 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. 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 ") that was effective on June 27, 2012, and
thereafter further amended by subsequent legislation (together AB xl 26, the Matosantos Decision,
AB 1484, and subsequent legislation thereto are referred to as the "Dissolution Law "). All statutory
references herein are to the Dissolution Law unless otherwise stated.
E. As of February 1, 2012, the former Agency became a dissolved community
redevelopment agency pursuant to the Dissolution Law.
F. As of and on and after February 1, 2012, the Successor Agency is performing its
functions as the successor agency under the Dissolution Law to administer the enforceable
obligations of the former Agency and is engaged in activities necessary and appropriate to wind
down the affairs of the former Agency, all subject to the review and approval by a seven- member
"Oversight Board" formed thereunder.
G. Section 34191.4(c) of the Dissolution Law allows a successor agency that has
received a Finding of Completion ( "Finding ") to use bond proceeds from bonds issued prior to 2011
for the purposes for which the bonds were sold, provides that such proceeds in excess of amounts
needed to satisfy approved enforceable obligations shall be expended in a manner consistent with the
original bond covenants, and further provides that such expenditures shall constitute "excess bond
proceeds obligations" that shall be listed separately on the successor agency's Recognized Obligation
Payment Schedule CROPS ").
H. The Successor Agency received the Finding from the State of California Department
of Finance on May 1, 2014, dated and effective nunc pro tunc as of May 15, 2013, as ordered by the
Honorable Timothy M. Frawley, Sacramento Superior Court, State of California in the petition titled
Successor Agency to the Tustin Community Redevelopment Agency, et al. v. Ana J. Matosantos,
et al., Case No. 34- 2013 - 80001623 ( "Petition ").
I. The CRL pre - dissolution provided for, and the Dissolution Law post - dissolution
continues to provide for, a cooperative relationship between sponsoring cities and their
redevelopment agencies, as well as their successor agencies who have assumed the duties and
obligations of the former redevelopment agencies. Under CRL Section 33220, a city may aid and
cooperate in the planning, undertaking, construction, or operation of redevelopment projects.
CRL Section 33220(e) specifically authorizes a city to enter into an agreement with its
redevelopment agency or any other public entity to further redevelopment purposes.
Section 34178(a) of the Dissolution Law allows a successor agency and its sponsoring city to enter
into agreements, subject to Oversight Board approval under Section 34180(h) of the Dissolution
Law.
J. The Successor Agency has and will have proceeds of its Tustin Community
Redevelopment Agency Tax Allocation Bonds (MCAS -Tustin Redevelopment Project Area)
Series 2010 ( "MCAS Bonds ") (together with other funds described in Section 2.1 below,
"Bond Proceeds ") that are not otherwise obligated for a project or other enforceable obligation.
The Successor Agency desires to transfer such Excess Bond Proceeds (defined below) to the City to
enable the City to expend such Excess Bond Proceeds for redevelopment and other public purposes
consistent with all applicable covenants of the MCAS Bonds.
K. The Successor Agency desires to transfer its Excess Bond Proceeds to the City to
enable the City to use such Excess Bond Proceeds in a manner consistent with the covenants of the
MCAS Bonds and to undertake projects and programs that were not previously funded and obligated
by the former Agency pre - dissolution or by the Successor Agency post - dissolution, or by the City
pre- or post - dissolution. The City has adopted a spending plan for using such Excess Bond Proceeds
( "Bond Spending Plan") to advance the City's community development goals while maximizing
fiscal and social benefits flowing to the affected taxing entities from successful development.
The City Council and Successor Agency Board have found that the use of Excess Bond Proceeds are
in accordance with the Bond Spending Plan to fund various capital improvements within and outside
the former MCAS Tustin Redevelopment Project Area (for which a benefit resolution shall have
been adopted by the Successor Agency), including those that are contained in the Tustin Legacy
Backbone Infrastructure Program established by the City, and are in accordance with CRL Sections
33445, 33445.1, and 33679 and other applicable law. On June 24, 2014, the Oversight Board
determined that the expenditure of Excess Bond Proceeds in accordance with this Agreement will
benefit the affected taxing entities, and approved the execution of this Agreement and the transfer of
Excess Bond Proceeds to the City for the purposes described herein.
L. In order to facilitate the use of Excess Bond Proceeds consistent with all applicable
bond covenants, the Successor Agency and the City have negotiated this Agreement requiring the
transfer of current and future excess bond proceeds by the Successor Agency to the City, and the
City's agreement to use such proceeds consistent with all applicable covenants, conditions,
restrictions and obligations under the MCAS Bonds. The parties intend that this Agreement shall
constitute an excess bond proceeds obligation within the meaning of Section 34191.4(c)(2)(A) of the
Dissolution Law to be paid from Excess Bond Proceeds. With Oversight Board approval, the
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Successor Agency will list this Agreement, and the requirement to transfer excess bond proceeds
herein, on its ROPS 14 -15B for January 1, 2015 through June 30, 2015 as an obligation to be funded
with Excess Bond Proceeds, and as and if applicable on successive ROPS if required by the
Dissolution Law.
NOW, THEREFORE, the parties hereto do mutually agree as follows:
RECITALS
The recitals above are an integral part of this Agreement and set forth the intentions of the
parties and the premises on which the parties have decided to enter into this Agreement.
2. DEFINITIONS
For purposes of this Agreement, the following terms shall have the indicated meaning:
2.1 "Dissolution Law" is defined in Recital D.
2.2 "Bond Proceeds" is defined in Recital J and also includes (1) proceeds from tax
allocation bonds issued on or before December 31, 2010, (2) rents, sale proceeds and other revenues
generated by properties acquired and/or improved with proceeds from tax allocation bonds issued on
or before December 31, 2010, (3) interest and principal paid on loans funded by proceeds from tax
allocation bonds issued on or before December 31, 2010, and (4) other income or revenues generated
from assets acquired or funded with proceeds from tax allocation bonds issued on or before
December 31, 2010.
2.3 "Excess Bond Proceeds" means Bond Proceeds that are not needed to satisfy
Enforceable Obligations listed on an approved ROPS.
2.4 "Enforceable Obligations" mean enforceable obligations, other than Excess Bond
Proceeds obligations, as defined under the Dissolution Law.
2.5 "Bond Spending Plan" is defined in Recital J.
3. SUCCESSOR AGENCY OBLIGATIONS
The Successor Agency shall have the following obligations under this Agreement:
3.1 Current Excess Bond Proceeds. The Successor Agency shall transfer to the City,
no later than January 1, 2015, Excess Bond Proceeds currently held by the Successor Agency in an
amount not to exceed $32,067,977.89.
3.2 Future Excess Bond Proceeds. The Successor Agency shall transfer to the City all
future Excess Bond Proceeds held or received by the Successor Agency. Such future Excess Bond
Proceeds shall include, without limitation, (1) Bond Proceeds previously obligated to a project or
other Enforceable Obligation that become unobligated for any reason, (2) Bond Proceeds that
become available in the form of rents, sale proceeds, loan repayments, other income, or other
revenues that are generated by properties or other assets acquired and/or improved with Bond
Proceeds and that are not otherwise obligated to a project, program, or other Enforceable Obligation,
and (3) any other funds held by the Successor Agency that qualify as Excess Bond Proceeds under
this Agreement.
The parties intend that payments of future Excess Bond Proceeds be made to the City as soon
as possible after such Excess Bond Proceeds become available. The transfer of future Excess Bond
Proceeds to the City shall be made pursuant to an approved ROPS within 30 days of the
commencement of the relevant ROPS period. The Successor Agency shall be responsible for
ensuring that payments of fixture Excess Bond Proceeds to the City, as such funds become available,
are included on the next possible ROPS.
3.3 Projects Funded By Excess Bond Proceeds. The Successor Agency assigns to the
City all responsibilities in relation to the administration and implementation of any projects or
programs funded by Excess Bond Proceeds. The Successor Agency assigns to the City all contracts
entered into by the Successor Agency post - dissolution or the former Agency pre- dissolution related
to the expenditure of Excess Bond Proceeds and any activities to be funded by Excess Bond
Proceeds, with the exception of those contracts relating to Enforceable Obligations, including the
MCAS bond documents, which shall be retained by the Successor Agency.
4. CITY OBLIGATIONS
The City shall have the following obligations under this Agreement:
4.1 Excess Bond Proceeds. The City shall accept, hold, disburse and administer
Excess Bond Proceeds transferred to the City by the Successor Agency under this Agreement,
including current Excess Bond Proceeds and fixture Excess Bond Proceeds. The City shall retain any
Excess Bond Proceeds that it receives, such as revenue generated from properties acquired or
improved with Excess Bond Proceeds or payments on loans funded from Excess Bond Proceeds,
without any obligation to return such funds to the Successor Agency, and shall use such funds for
uses consistent with applicable covenants of the MCAS Bonds.
The City may spend Excess Bond Proceeds received or retained under this Agreement on any
project, program, or activity authorized under the Bond Spending Plan. Notwithstanding anything to
the contrary in this Agreement or the Bond Spending Plan, the City shall spend Excess Bond
Proceeds consistent with all covenants of the MCAS Bonds applicable to the particular Excess Bond
Proceeds. The City shall be solely responsible for ensuring that Excess Bond Proceeds are
maintained and spent in accordance with all covenants of the MCAS Bonds and other applicable
laws. The City may transfer funds between approved projects, programs and activities.
The City hereby assumes all contracts entered into or assumed by the Successor Agency
post dissolution or entered into by the former Agency pre - dissolution related to the expenditure of
Excess Bond Proceeds and any activities to be funded by Excess Bond Proceeds, with the exception
of those contracts relating to Enforceable Obligations, which shall be retained by the Successor
Agency. The City shall perform its obligations hereunder, and under such assumed contracts, in
accordance with the applicable provisions of federal, state and local laws, including the obligation to
comply with environmental laws such as CEQA and/or NEPA, and shall timely complete the work
required for each project commenced by the City pursuant to this Agreement and the Bond Spending
Plan.
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4.2 BOND SPENDING PLAN. The City shall be solely responsible for maintaining,
administering, and implementing the Bond Spending Plan. The City may amend the Bond Spending
Plan as the City deems reasonably necessary in its sole discretion. Any amendments to the adopted
Bond Spending Plan will consider uses that advance the City's community development goals while
maximizing fiscal and social benefits flowing to the affected taxing entities from successful
development. Notwithstanding any contrary provision hereof, unless the City expressly agrees
otherwise, the City shall not be obligated to provide funding for any program or project in an amount
exceeding the Excess Bond Proceeds provided to the City pursuant to this Agreement.
5. ENTIRE AGREEMENT; WAIVERS; AND AMENDMENTS
5.1 This Agreement constitutes the entire understanding and agreement of the parties
with respect to the transfer and use of Excess Bond Proceeds. This Agreement integrates all of the
terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or
previous agreements between the parties with respect to the subject matter of this Agreement.
5.2 This Agreement is intended solely for the benefit of the City and the Successor
Agency. Notwithstanding any reference in this Agreement to persons or entities other than the City
and the Successor Agency, there shall be no third party beneficiaries under this Agreement.
5.3 All waivers of the provisions of this Agreement and all amendments to this
Agreement must be in writing and signed by the authorized representatives of the parties.
6. SEVERABILITY
If any term, provision, covenant or condition of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions shall
continue in full force and effect unless the rights and obligations of the parties have been materially
altered or abridged by such invalidation, voiding or unenforceability. In addition, the parties shall
cooperate in good faith in an effort to amend or modify this Agreement in a manner such that the
purpose of any invalidated or voided provision, covenant, or condition can be accomplished to the
maximum extent legally permissible.
7. DEFAULT
If either party fails to adequately perform an obligation required by this Agreement within
thirty (30) calendar days of receiving written notice from the non - defaulting party, the party failing to
perform shall be in default hereunder. In the event of default, the non - defaulting party will have all
the rights and remedies available to it at law or in equity to enforce the provisions of this contract,
including without limitation the right to sue for damages for breach of contract or to seek specific
performance. The rights and remedies of the non - defaulting party enumerated in this paragraph are
cumulative and shall not limit the non - defaulting party's rights under any other provision of this
Agreement, or otherwise waive or deny any right or remedy, at law or in equity, existing as of the
date of the Agreement or hereinafter enacted or established, that may be available to the non-
defaulting party against the defaulting party.
8. BINDING ON SUCCESSORS
This Agreement shall be binding on and shall inure to the benefit of all successors and
assigns of the parties, whether by agreement or operation of law.
4. FURTHER ASSURANCES
Each party agrees to execute, acknowledge and deliver all additional documents and
instruments, and to take such other actions as may be reasonably necessary to carry out the intent of
this Agreement.
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C
In witness whereof, the undersigned parties have executed this Bond Proceeds Expenditure
Agreement as of the date first above written.
ATTEST:
Jeffrey, . j afk r, City Clerk
Attorney
0
ATTEST:
Jeffrey Ci. e , City Clerk
on behalf AN Successor Agency
"CITY"
CIT
By:
"SUCCESSOR AGENCY"
SUCCESSOR AGENCY TO THE TUSTIN
COMMUNITY REDEVE;I OPMENT AGE;,,
a public dy, corpor je,4Ti, ,plitic
Successor Agency Chairman