HomeMy WebLinkAboutSA1 SUCCESSOR AGENCY APPROVAL OF AN AMENDED ADMINISTRATIVE BUDGET & AUTHORIZATION TO ENTER INTO A 12TH AMENDED AGMTAgenda Item SA1
Reviewed:
AGENDA REPORT City Manager
Finance Director /A
MEETING DATE: JANUARY 16, 2018
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: SUCCESSOR AGENCY AND FINANCE DEPARTMENT
SUBJECT: SUCCESSOR AGENCY APPROVAL OF AN AMENDED
ADMINISTRATIVE BUDGET AND AUTHORIZATION TO ENTER
INTO A TWELFTH 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 Twelfth Amended
Agreement for reimbursement of administrative support.
RECOMMENDATION:
1. 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 341770). 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
authorized to enter into any agreements necessary to provide administrative
support services as identified in the Administrative Budget attached hereto.
Agenda Report
January 16, 2018
Page 2
FISCAL IMPACT:
Pursuant to Health and Safety Code ("HSC") Section 34171, the Twelfth Amended
Agreement captures the maximum amount the Successor Agency is allowed, $250,000,
for administrative costs.
COORELATION TO THE STRATEGIC PLAN:
The Administrative Budget and Twelfth 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:
Pursuant to the passage of Senate Bill ("SB") 107, HSC Section 34177 was amended to
add 34177(0), revising the number of Recognized Obligation Payment Schedules
("ROPS") required during a fiscal year from two (2) six-month schedules to one (1)
twelve-month schedule.
In preparing ROPS 18-19, HSC Section 34177(j) requires the Successor Agency
develop a proposed administrative budget and submit it to the Oversight Board for
approval. The Successor Agency has prepared a twelve month amended
administrative budget. The administrative budget includes all of the following: (i)
estimated amounts of the Successor Agency's administrative costs for the up -coming
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 2018-19 is payable from property tax revenues of up to
three percent (3%) of property tax allocated to the Redevelopment Obligation
Retirement Fund during FY 2018-19. 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 July 2018
through June 2019 reflects the projected administrative costs in ROPE 18-19. 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 the fiscal period. Since the
ROPS may change in the future, authorization for the City Manager or Finance Director
Agenda Report
January 16, 2018
Page 3
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, 2014-15, 2015-16, 2017-18, and 2018-19, 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 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; Eighth Amendment on February 24, 2015; Ninth Amendment on September 22,
2015; Tenth Amendment on January 26, 2016; and Eleventh Amendment on January
24, 2017). 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 $250,000 administrative cost distribution
for the period of July 2018 to June 2019. A copy of the amended agreement is attached
for Successor Agency approval. Staff are available to answer any questions the
Successor Agency may have.
John uchanan
Finance Director
Successor Agency to the Tustin
Community Redevelopment Agency
Jerry Craig
Deputy Direct r -E no Development
Successa.r- y to the Tustin
Community Redevelopment Agency
Attachments: 1. Proposed Administrative Budget for July 1, 2018 through
June 30, 2019.
2. Proposed City and Successor Agency Twelfth Amended
Agreement for Reimbursement of Costs for Fiscal Year
2018-2019.
Object Position
Code
Percent to
Admin
Total FY - Admin
Costs
JULY 2018 THRU
JUNE 2019
1 Enforceable Obligations Paid with Redevelopment Property
Tax Trust Fund
JULY 2018 THRU
JUNE 2019
$ 2,592,276
2,592,276
Estimated Property Tax allocated to
Successory Agency
4 Administrative Cost Allowance for FY
18/19 HSC Section 34171 b 3
100%
2,592,276
3% $ 250,000
250,000
Telephone
3,700
100%
3,700
ESTIMATED EXPENSES
3 6400
Office Supplies
5,200
EMPLOYEE DETAILS
5,200
5,200
4 6415
Object Position Fiscal Year -Total
Code Wages, Benefits and
Percent to
Admin
Total FY - Admin
Costs
JULY 2018 THRU
JUNE 2019
Sub -Total Wages, Benefits and WC: $
5 6420
$ -
$ -
OTHER ADMINISTRATIVE DIRECT COSTS
9,000
9,000
6 6710
Object
Code
Item
Total During Fiscal
Year 2018/19
Percent to
Admin
Total FY - Admin
Costs
JULY 2018 THRU
JUNE 2019
1 6147
Bank Service Charges
3,000
100%
3,000
3,000
2 6355
Telephone
3,700
100%
3,700
3,700
3 6400
Office Supplies
5,200
100%
5,200
5,200
4 6415
Mail and Postage Service
1,600
100%
1,600
1,600
5 6420
Printing
9,000
100%
9,000
9,000
6 6710
Meetings (staff)
0
100%
0
0
7 6715
Training Expense
0
100%
0
0
8 6730
Membership/Subscriptions
0
100%
0
0
9 6840
Vehicle Mileage
200
100%
200
200
10 6845
Vehicle Lease Equipment
6,800
100%
6,800
6,800
11 6848
IT Support Services
Sub -Total Admin Cost Allowances:
36,500
$ 66,000
100%
36,500
$ 66,000
36,500
$ 66,000
CITY ADMINISTRATIVE SUPPORT COSTS BASED ON COST ALLOCATION (ATTACHED)
Object
Code
Item
Total During Fiscal
Year 2018/19
Total FY- Admin
Costs
JULY 2018 THRU
JUNE 2019
1
City Administrative Support Costs
based on Cost Allocation
152,000
40.1%
60,935
$ 60,935
CITY ATTORNEY (contract services)
Object
Code
Description of Services
Total During Fiscal
Year 2018/19
Percent to
Admin
Total FY - Admin
Costs
JULY 2018 THRU
JUNE 2019
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:
$ 100,000
$ 100,000
100%
$ 100,000
$ 100,000
$ 100,000
$ 100,000
SPECIFIC SERVICES
Object
Code
Description
Total During Fiscal
Year 2018/19
Percent to
Admin
Total FY- Admin
Costs
JULY 2018 THRU
JUNE 2019
1 6315
Lease of Office Space
Sub -Total Specific Services:
$ 23,065
$ 23,065
100%
$ 23,065
23,065
$ 23,065
$ 23,065
TOTAL ADMINISTRATIVE SERVICE COSTS
Percent to
Admin
Total FY - Admin
Costs
JULY 2018 THRU
JUNE 2019
TOTAL ADMINISTRATIVE SERVICE COSTS
$ 250,000
$ 250,000
BUDGET - REVENUES (SURPLUS)/EXPENSES (DEFICIT)
0 $
TWELFTH AMENDED AGREEMENT FOR REIMBURSEMENT OF COSTS
AND CITY/SUCCESSOR AGENCY OPERATIONS LOAN
This TWELFTH AMENDED AGREEMENT FOR REIMBURSEMENT OF COSTS
AND CITY/SUCCESSOR AGENCY OPERATIONS LOAN ("Twelfth Amended Agreement") is
made and entered into as of January 23, 2018, 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. 5194861, 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, the
Eighth Amended Agreement on February 24, 2015, the Ninth Amended Agreement on September
22, 2015, the Tenth Amended Agreement on January 26, 2016 and the Eleventh Amended
Agreement on January 24, 2017 (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 January 23,
2018, 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 2018-19.
(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, 2018 through June 30, 2019, 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 2018-19, subject to Oversight Board approval and City Successor Agency preparation and
approval of an administrative budget estimate for such services and costs for the fiscal period of July
1, 2018 through June 30, 2019. 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) TWELFTH 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 fall force and effect.
(b) Binding. This TWELFTH Amended Agreement and the Original Agreement shall be
binding upon and inure to the benefit of the parties hereto.
«««««««««««««< Signature Page Follows»»»»»»»»»»»»»>
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IN WITNESS WHEREOF, the parties have caused this TWELFTH 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
Elwyn A. Murray, Mayor
ATTEST:
Erica N. Rabe, City Clerk
APPROVED AS TO FORM
David Kendig, City Attorney
"CITY SUCCESSOR AGENCY"
SUCCESSOR AGENCY TO THE TUSTIN
COMMUNITY REDEVELOPMENT AGENCY
Elwyn A. Murray
Successor Agency Chairman
ATTEST:
Erica N. Rabe, City Cleric
on behalf of the Successor Agency
APPROVED AS TO FORM
David Kendig, Legal Counsel
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