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HomeMy WebLinkAbout03 9TH ADMINISTRATIVE AGREEMENT BETWEEN THE CITY AND SUCCESSOR AGENCYAgenda Item 3 Reviewed: AGENDA REPORT City Manager ' Finance Director MEETING DATE: SEPTEMBER 15, 2015 TO: JEFFREY C. PARKER, CITY MANAGER FROM: SUCCESSOR AGENCY AND FINANCE DEPARTMENT SUBJECT: SUCCESSOR AGENCY APPROVAL OF AMENDED ADMINISTRATIVE BUDGETS AND AUTHORIZATION TO ENTER INTO A NINTH AMENDED AGREEMENT BETWEEN THE CITY AND SUCCESSOR AGENCY FOR ADMINISTRATIVE SUPPORT SUMMARY: Successor Agency approval is requested of an amended Administrative Budget and authorization for the City and Successor Agency to enter into a Ninth Amended Agreement for reimbursement of administrative support. RECOMMENDATION: 1. It is recommended the City Council approve and authorize the City to enter into a Ninth Amended Agreement for Reimbursement of Costs and City/Successor Agency Operations Loan with the City acting as Successor Agency to the Tustin Community Redevelopment Agency. 2. It is recommended the City, acting as the Successor Agency to the Tustin Community Redevelopment Agency ("Successor Agency'), take the following actions: A. Approve the attached amended Administrative Budget pursuant to California Health and Safety Code (HSC) Section 34177(j). Should any subsequent modifications be determined necessary, the City Manager and/or Finance Director, or their authorized designee, shall be authorized to make augmentation, modification, additions, or revisions as may be necessary subject to Oversight Board approval. B. Approve and authorize the Successor Agency to enter into an Agreement for Reimbursement of Costs and City/Successor Agency Operations Loan with the City for reimbursement of costs incurred by the City to support Successor Agency operations, obligations consistent with the Administrative Budget approved by the Successor Agency. The Successor Agency shall also be Agenda Report September 15, 2015 Page 2 authorized to enter into any agreements necessary to provide administrative support services as identified in the Administrative Budget attached hereto. COORELATION TO STRATEGIC PLAN: The Administrative Budget and Ninth Amended Agreement for Reimbursement of Costs are consistent with City's value of Fiscal Stewardship. While adhering to the fiscal limitations placed on the Successor Agency by the dissolution of Redevelopment, they exercise the fiscal discipline necessary to live within our means and to ensure future financial sustainability. BACKGROUND: HSC Section 34177(j) requires the Successor Agency prepare a proposed administrative budget for upcoming six month periods and submit it to the Oversight Board for approval. According to the HSC Section 341770), the administrative budget is to include all of the following: (i) estimated amounts of the Successor Agency's administrative costs for the up -coming six month fiscal period; (ii) the proposed sources of payment for the costs identified in (i); and (iii) proposals for arrangements for administrative and operations services provided by the city, county, city and county, or other entity. Pursuant to HSC Section 34171, the Administrative Budget for FY 2015- 2016 is payable from property tax revenues of up to three percent (3%) of property tax allocated to the Redevelopment Obligation Retirement Fund during FY 2015-16. In any event, the amount allocated for administrative costs shall not be less than Two Hundred Fifty Thousand Dollars ($250,000) for any fiscal year. The proposed Successor Agency Administrative Budget for the period of January 2016 through June 2016 reflects the projected administrative costs in the Recognized Obligation Payment Schedule 15-16B (`BOPS 15-166"). Under HSC 34177(k), the Successor Agency provides these administrative cost estimates to be paid from property tax revenues deposited into the Redevelopment Property Tax Trust Fund to the County of Orange Auditor -Controller for each six month fiscal period. Since the ROPS may change in the future, authorization for the City Manager or Finance Director to make any future modifications necessary to the Administrative Budget is requested, subject to Oversight Board approval. In conjunction with the past approvals of the Administrative Budget for FY 2011-12, 2012-13, 2013-14, and 2014-15, including each six month ROPS time frame, the City and Successor Agency entered into an Agreement for reimbursement of costs incurred by the City to support Successor Agency operations and obligations (original agreement entered into March 20, 2012, First Amendment on April 17, 2012; Second Amendment Agenda Report September 15, 2015 Page 3 on June 19, 2012; Third Amendment on August 14, 2012; Fourth Amendment on February 19, 2013; Fifth Amendment on September 24, 2013; Sixth Amendment on February 25, 2014; Seventh Amendment on September 30, 2014; and Eighth Amendment on February 24, 2015). The Oversight Board has previously authorized the Successor Agency to enter into subsequent amendments to this agreement to reflect the revised Administrative Budgets modified in conjunction with approval of the ROPS. The proposed Administrative Budget reflects a $125,000 administrative cost distribution for the period of January 2016 to June 2016. A copy of the amended agreement is attached for City and Successor Agency approval. Staff are available to answer any questions the City Council may have. Jerry Craig Economic 1 `n� Housing Manager to the Tustin ;lopment Agency a!4� 4L� Pamela Arends-King Finance Director Successor Agency to the Tustin Community Redevelopment Agency Attachments: 1. Proposed Administrative Budget for January 1, 2016 through June 30. 2016. 2. Proposed City and Successor Agency Ninth Amended Agreement for Reimbursement of Costs for Fiscal Year 2015-2016. Attachment No. 1 Proposed Administrative Budget for January 1, 2016 through June 30, 2016 ESTIMATED REVENUES Object Position Percent to Total FY - Admin JAN THRLI 1 Enforceable Obligations Paid with Redevelopment Property Tax Trust Fund $ 7,401,055 1,689,713 Estimated Property Tax allocated to Successory Agency 1,689,713 4 Administrative Cost Allowance for FY 15/16 3% $ 250,000 125,000 ESTIMATED EXPENSES EMPLOYEE DETAILS Object Position Fiscal Year - Totall Percent to Total FY - Adminj JAN THRU Sub -Total Wages, Benefits and WC: $ $ $ OTHER ADMINISTRATIVE DIRECT COSTS Object Code Item Total During Fiscal Year 2015/16 Percent to Admin Total FY - Admin Costs JAN THRU JUNE 2016 1 6147 2 6355 3 6400 4 6415 5 6420 6 6710 7 6715 8 6730 9 6840 10 6845 11 6848 Bank Service Charges Telephone Office Supplies Mail and Postage Service Printing Meetings (staff) Training Expense Membership/Subscriptions Vehicle Mileage Vehicle Lease Equipment IT Support Services Sub -Total Admin Cost Allowances: 3,000 4,800 5,200 1,600 9,000 0 0 0 200 6,800 36,500 $ 67,100 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 3,000 4,800 5,200 1,600 9,000 0 0 0 200 6,800 36,500 $ 67,100 1,500 2,400 2,600 800 4,500 0 0 0 100 3,400 18,250 $ 33,550 CITY ADMINISTRATIVE SUPPORT COSTS BASED ON COST ALLOCATION (ATTACHED) Object Code Item Total During Fiscal Year 2015 16 Total FY- Admin Costs JAN THRU JUNE 2016 1 City Administrative Support Costs based on Cost Allocation 418,000 14.6% 60,950 $ 30,475 CITY ATTORNEY (contract services) Object Code Description of Services Total During Fiscal Year 2015/16 Percent to Admin Total FY - Admin Costs JAN THRU JUNE 2016 6017 City Attorney's Office - Woodruff, Spradlin & Smart (Including: Stradling Yocca Carlson & Rauth; Richards, Watson & Gershon; Remy, Thomas, Moose & Manley; Waters & Company; and Jeanette Justus). This does not include legal services from the following firms that are associated with project costs: 1) Armbruster Goldsmith & Delvac LLP; 2) Cappello and Noel LLP, and 3) Kutak Rock. Sub -Total City Attorney: $ 200,000 $ 200,000 100% $ 100,000 $ 50,000 $ 100,000 $ 50,000 SPECIFIC SERVICES (3rd Revised EOPS and Draft ROPS) Object Code Description Total During Fiscal Year 2015/16 Percent to Admin Total FY - Admin Costs JAN THRU JUNE 2016 1 6315 Lease of Office Space Sub -Total Specific Services: ?i q51 $ 21,950 100% $ 21,950 10,975 $ 21,950 $ 10,975 TOTAL ADMINISTRATIVE SERVICE COSTS Percent to Admin Total FY - Admin Costs JAN THRU JUNE 2016 TOTAL ADMINISTRATIVE SERVICE COSTS $ 250,000 $ 125,000 BUDGET- REVENUES (SURPLUS)/EXPENSES (DEFICIT) 0 $ - Attachment No. 2 Proposed City and Successor Agency Ninth Amended Agreement for Reimbursement of Costs for Fiscal Year 2015— 2016 NINTH AMENDED AGREEMENT FOR REIMBURSEMENT OF COSTS AND CITY/SUCCESSOR AGENCY OPERATIONS LOAN This NINTH AMENDED AGREEMENT FOR REIMBURSEMENT OF COSTS AND CITY/SUCCESSOR AGENCY OPERATIONS LOAN ("Ninth Amended Agreement") is made and entered into as of September 22, 2015, by and among the CITY OF TUSTIN, a California municipal corporation ("City"), and the CITY OF TUSTIN ACTING AS SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY ("City Successor Agency"). RECITALS A. The Tustin Community Redevelopment Agency ("Agency") was established as a community redevelopment agency that was previously organized and existing under the California Community Redevelopment Law, Health and Safety Code Sections 33000, et seq. ("CRL"), and previously authorized to transact business and exercise the powers of a redevelopment agency pursuant to action of the City Council ("City Council") of the City. B. The Tustin Housing Authority is a housing authority and public body corporate and politic organized, existing, and operating pursuant to the California Housing Authorities Law, Health and Safety Code Section 34200, et seq. C. Assembly Bill 1X 26 added Parts 1.8 and 1.85 to Division 24 of the California Health & Safety Code, which laws caused the dissolution and wind down of all redevelopment agencies ("Dissolution Act"). D. On December 29, 2011, California Redevelopment Association, et al. v. Matosantos, Case No. S194861, the California Supreme Court upheld the Dissolution Act and thereby all redevelopment agencies in California are subject to the Dissolution Act and were dissolved effective February 1, 2012. E. The Agency is now a dissolved community redevelopment agency pursuant to the Dissolution Act. F. By a resolution considered and approved by the City Council at an open public meeting on January 17, 2012, the City chose to become and serve as the "City Successor Agency" to the dissolved Agency under the Dissolution Act. G. As of and on and after February 1, 2012, the City serves as the "City Successor Agency" and will perform its functions as the successor agency under the Dissolution Act to administer the enforceable obligations of the Agency and otherwise unwind the Agency's affairs, all subject to review and approval by a seven -member Oversight Board formed thereunder. H. By a resolution considered and approved by the City Council at an open public meeting on January 17, 2012, and pursuant to California Health and Safety Code Section 34176 of the Dissolution Act, the City declined to assume the housing assets and functions of the Agency and selected the Tustin Housing Authority to assume such housing assets and functions, and on such date, also pursuant to Section 34176, the Tustin Housing Authority accepted and assumed the housing assets and functions of the Agency and as of February 1, 2012 became and serves as the "Successor Housing Agency" of the former Agency pursuant to the Dissolution Act. At this time, assets Page 1 assigned and transferred by operation of law and to be assigned and transferred to the Successor Agency by authorization of and direction from the Oversight Board and operating pursuant to the Dissolution Act, are not adequate to fund administrative support costs and expenses unless any future Low and Moderate Income Housing fund balances are authorized to be transferred under State Law to the Successor Housing Agency. If this occurs, a future modification to this Agreement may be necessary. I. City as the Successor Agency is engaged in activities necessary and appropriate to wind down the activities of Tustin Community Redevelopment Agency's Redevelopment Plans ("Redevelopment Plans") for the MCAS Tustin Project, the Town Center Project and the South Central Project ("Project Areas") that were originally adopted and amended by ordinances of the City Council. J. Employees of the City will perform day-to-day administration and operation of the Successor Agency's duties and functions. Since the Tustin Community Redevelopment Agency was originally formed and upon Successor Agency's effectiveness as of February 1, 2012, the City has provided and shall continue to provide services to the Successor Agency, including but not limited to providing administrative, accounting, auditing, planning, engineering, legal, risk management, financial, clerical, recordkeeping, and other services necessary for the Successor Agency to carry out its responsibilities. K. City and City Successor Agency entered into an Agreement for Reimbursement of Costs and City/Successor Agency Operations Loan on March 20, 2012 (the "Original Agreement"), as amended by the First Amended Agreement on April 17, 2012, the Second Amended Agreement on June 19, 2012, the Third Amended Agreement on August 14, 2012, the Fourth Amended Agreement on February 19, 2013, the Fifth Amended Agreement on September 24, 2013, the Sixth Amended Agreement on February 25, 2014, the Seventh Amended Agreement on September 30, 2014, and the Eighth Amended Agreement on February 24, 2015 (the Original Agreement and all amendments shall be collectively referred to as the "Agreement") to document an on-going cooperative arrangement regarding administrative and operational services and payment for services whereby City agrees to provide administrative and operational services and City Successor Agency agrees to pay City for the cost of all such services to be provided by City for City Successor Agency pursuant to California Health and Safety Code Section 34177 0). L. Pursuant to Health and Safety Code (HSC) Section 34180(e), the Oversight Board, on May 29, 2012, approved the acceptance of financial assistance for the Phase 1 and Phase 2 Tustin Ranch Road Improvements Project conditioned upon the provision of matching funds to the City from the MCAS Tustin 2010 Tax Allocation Bonds by the Successor Agency. In compliance with HSC Section 34180(h), the Oversight Board also authorized the Successor Agency to enter into an amended reimbursement agreement with the City for the Successor Agency's matching contribution to the Tustin Ranch Road Improvements Project in the amounts of $5,983,863 for Phase 1 and $8,164,931 for Phase 2 to be disbursed from MCAS Tustin 2010 Tax Allocation Bonds to the City. M. On December 18, 2012, the Department of Finance issued a determination denying the Successor Agency's use of MCAS Tustin 2010 Tax Allocation Bonds to provide a matching contribution to the Tustin Ranch Road Improvements Project and, consequently, the Agreement has been modified to delete the reference under Section 1.2. Page 2 N. The City Successor Agency will seek Oversight Board authorization on September 22, 2015 to enter into an Amended Agreement for Reimbursement of Costs with the City to reflect modifications to the Administrative Budget. NOW, THEREFORE, for and in consideration of the mutual promises, covenants and conditions herein contained, the parties hereto agree as follows: 1. Modification of Section 2 of the Original Agreement as it relates to the Cost of Administrative Expenses and Administrative Cost Allowances for Fiscal Year 2015-16. (a) Section 2.3 of the Original Agreement is hereby deleted and replaced as follows: "Section 2.3 City Successor Agency and City estimate that the cost of administrative and operational services to be provided by the City to the City Successor Agency for the period of July 1, 2015, through June 30, 2016, is Two Hundred Fifty Thousand Dollars ($250,000). Pursuant to the provisions of Section 4 herein, City Successor Agency agrees to pay the sum of $250,000 to City to pay for the estimated administrative expenses of the City Successor Agency for the period of fiscal year 2015-16, subject to Oversight Board approval and City Successor Agency preparation and approval of an administrative budget estimate for such services and costs for the two upcoming six- month fiscal periods: 1) July 1, 2015 through December 31, 2015; and 2) January 1, 2016 through June 30, 2016. The City Successor Agency shall also be liable to the City for payment of any and all direct Project and Program Expenses incurred by City where they are adopted as part of the ROPS." 2. Miscellaneous. (a) NINTH Amended Agreement Ratified. Except as specifically amended or modified herein, each and every term, covenant and condition of the Original Agreement as amended is hereby ratified and shall remain in full force and effect. (b) Binding. This NINTH Amended Agreement and the Original Agreement shall be binding upon and inure to the benefit of the parties hereto. «««««««««««««< Signature Page Follows»»»»»»»»»»»»»> Page 3 IN WITNESS WHEREOF, the parties have caused this NINTH Amended Agreement to be executed by their officers thereunto duly authorized on the date first above written. "CITY" CITY OF TUSTIN, a California municipal corporation Charles E. Puckett, Mayor ATTEST: Jeffrey C. Parker, City Clerk APPROVED AS TO FORM David Kendig, City Attorney "CITY SUCCESSOR AGENCY" SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY REDEVELOPMENT AGENCY Charles E. Puckett Successor Agency Chairman ATTEST: Jeffrey C. Parker, City Clerk on behalf of the Successor Agency APPROVED AS TO FORM David Kendig, Legal Counsel Page 4