HomeMy WebLinkAbout14-08 (1st Amendment to Public Works Agmt.)OVERSIGHT BOARD RESOLUTION NO. 14-08
A RESOLUTION OF THE OVERSIGHT BOARD OF THE
SUCCESSOR AGENCY TO THE TUSTIN COMMUNITY
REDEVELOPMENT AGENCY AMENDING AND
REINSTATING THE 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 City of Tustin ("City") is a municipal corporation organized and operating under
the laws of the State of California; and
B. 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
C. Assembly Bill x1 26 ("AB x1 26") added Parts 1.8 and 1.85 to Division 24 of the
California Health & 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. S194861,
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 and subsequent legislation
(together AB x126, the Matosantos Decision, and subsequent legislation are referred
to as the "Dissolution Law"). All statutory references herein are to the Health and
Safety Code of the Dissolution Laws unless otherwise stated; and
D. 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
E. 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
F. Section 34177(a) permits the Successor Agency to make payments due for
enforceable obligations; and
Oversight Board Resolution 14-08
Page 1 of 5
G. Section 34177(1) requires the Successor Agency to prepare a Recognized Obligation
Payment Schedule ('BOPS") before each six-month fiscal period that lists its
Enforceable Obligations; and
H. Section 34191.4(b) authorizes the City and Successor Agency to reestablish prior
loan agreements between the City and the former Agency; and
I. 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
J. The Public Works Agreement required the Agency to reimburse the City for
infrastructure improvements constructed as part of the Newport Avenue Extension
Project; and
K. 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
L. 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
M. 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
N. 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
O. 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
P. 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
between the City of Tustin and the former Tustin Community Redevelopment
Agency on June 2, 1993, as an enforceable obligation; and
Q. On January 28, 2014, the Oversight Board duly considered all other related matters
and found the Public Works Agreement and the First Amendment were for legitimate
redevelopment purposes and deemed the Reimbursement Agreement an
enforceable obligation by adopting Oversight Board Resolution No. 14-03; and
Oversight Board Resolution 14-08
Page 2 of 5
R. 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
S. The Superior Court, County of Sacramento has issued its ruling in the Petition Case
No. 34-2013-80001623 under which a Writ will mandate the State Department of
Finance ("DoF') to issue the Successor Agency its Finding of Completion, which is
expected to be issued nunc pro tunc as of May 2013; and
T. In light of the pending Finding, the Oversight Board has reconsidered Oversight
Board Resolution No. 14-03 and has determined affirming and ratifying the
previously approved First Amendment to the Public Works Agreement and
submission to DoF is 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
U. Also, by this Resolution the Oversight Board desires to re -affirm that the Public
Works Agreement was entered into for legitimate redevelopment purposes, that the
Agreement, as amended and reinstated, is an enforceable obligation; and
V. Notwithstanding, the former Agency borrowed funds from the Low and Moderate
Income Housing Fund during Fiscal Years 1986/87 to 1992/93; and
W. On May 1, 2000, the former Agency adopted Resolution No. RDA 00-4, approving
the Town Center Housing Deficit Reduction Plan ("Housing Deficit Plan"); and
X. On May 29, 2012, the Oversight Board approved a Housing Deficit Plan repayment
schedule; and
Y. In accordance with Section 34191.4, the Housing Deficit Plan repayment schedule
will be completed prior to Redevelopment Property Tax Trust Funds being issued by
the Orange County Auditor -Controller for Public Works Agreement payments.
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. Pursuant to Section 34191.4 of the Dissolution Law, the Oversight Board
reaffirms and determines: (i) the Public Works Agreement was entered into for
legitimate redevelopment purposes, and (ii) the reinstated loan is an enforceable
obligation.
Section 3, The Oversight Board affirms and ratifies the previously approved First
Amendment to the Public Works Agreement attached hereto as Attachment No. 1 and
Oversight Board Resolution 14-08
Page 3 of 5
incorporated herein, and further authorizes the Successor Agency to transmit this
Resolution to the DoF.
Section 4. The Executive Director of the Successor Agency or his authorized
designee is directed to post this Resolution on the City/Successor Agency website.
Section 5. 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 Dissolution Law. 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 6. The Secretary of the Oversight Board shall certify to the adoption of this
Resolution.
APPROVED AND ADOPTED this 29th day of April, 2014.
Doug DaG2rt, Chairman
Oversigof 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
0
Oversight Board Resolution 14-08
Page 4 of 5
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. 14-08 was duly passed and adopted at a regular meeting
of the Oversight Board, held on the 29th day of April, 2014, by the following vote:
BOARD MEMBER AYES: Davert. Fitzsimons. Berns in Soria
West (5)
BOARD MEMBER NOES: None (0)
BOARD MEMBER ABSTAINED: None (0)
BOARD MEMBER ABSENT: Nielsen, Puckett (2)
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 14-08
Page 5 of 5
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 WOZO AGREEMENT
("First Amendment") 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 T14E TUSTIN COMMUNITY® REDEVELOPMENT AGENCY, a Public
body corporate and politic ("Successor Agency").
A. By Ordinance No. 891 adopted on July 18, 1983„ the City Council of the City
(if Tustin adopted and approved a certain Redevelopment Plan C'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 Ara'); and
C. In furtherance of the Project, the former Agency and the City entered into that
certain Public Works AE.T, eernent ("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 f."bimer Agency and the City Council of the City found and determined that
the public improvements to be provided and thereafter provided pursuant to tine :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, ef seq. ("CRL"); and
F. Assembly Bill xI 26 ("AB xI 26") added Parts 1.8 and 1.85 to Division 24 of
the California Health & Safety Code and which laws were modified, in part, and determined
constitutional by the California Supreme Court in the petition Cal�fornia Redevelopment
Association, el al. v. Arra Matosanlos, el al., Case No. 5194861 CMalosanfos 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 X1 26, the Matosaillos
Decision, and AB 1484 are referred to as the "Dissolution Laws"), and all statutory references
herein are to the Health and Safety Code ofthe 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 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
1. At the time of Dissolution, the City had made $38,254,807 in contracted public
improvements that the former 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 ("RIYFIT"), the Successor Agency submitted the Public Works
Agreement on a Recognized Obligation Payment Schedule ("R011S") 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
BOPS submittals (BOPS 1, 11 and 11.1), DoF denied the Public Works Agreement in the fourth
BOPS (BOPS 13-14A), reversing its prior determinations that such contract is an enforceable
obligation and to be funded from RPTTF 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 BOPS 13-14A 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 frorn DoF; and
O. 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 DoFs 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 EX111BIT 413' attached hereto and fully
incorporated by this reference with interest accruing at the rate earned by funds deposited into
the Local Agency Investment Fund ("LMF") pursuant to Section 34191.4 and other terms as
set forth hereinafter,
NOW THEREFORE, in consideration of the mutual covenants, agreements and
considerations contained herein, the City and the Successor Agency hereby agree the following
sections shall be amended:
1, The following sections
of the Original Public Works Agreement are hereby amended as follows:
a) Section 2.hayrnj -Lt_bA is hereby deleted in its entirety and
fl1q__=qgy
replaced as follows:
"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 forrner Agency in carrying out the
Project and for which the annual tax allocations to the former Agency from the
Project ("Tac 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 Itecognized Obligation Payment
Schedule process. To date, the Successor Agency has reimbursed the City
$12,468,199 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
3
payments in the amount of $5,190,371. In the event the RPTTF received are
not sufficient to make a $'5,190,371 payrnent, principal and interest balances
will be rolled over into subsequent payments. The attached payment schedule,
EXHIMT '13% 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. leimiaktigli tafArayt
is hereby deleted in its entirety
and replaced as follows:
"This Agreement and the obligations of the City and the Successor Agency
g
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."
2.31 ra i rt c F it Each recital set forth above in this First Amendment
shall be deemed to be part of the Public Works Agreement as amended by this First
Amendment,
3. DrA -Amnkmmat, This First Amendment constitutes a part of the Public
Works Agreement and any reference to the Public Works Agreement shall be deemed to
include a reference to such Public Works Agreement as amended hereby.
4.WU�Ar—. Except as otherwise amended previously and herein, all
terms, covenants, conditions and provisions of the Public Works Agreement shall remaining
full force and effect.
5. Fes, m&nt t
qL _2
The Successor Agency agrees to submit this First Amendment
(with copies of the original Public Works Agreement and attachments) to the Oversight Board
for its review, approval and determination that the Public Works Agreement and monies
advanced by the City to the Successor Agency occurred for legitimate redevelopment purposes,
specifically for public improvements of benefit to the Project Area. Thereafter, this First
Amendment shall be submitted to the DOF for its review and approval pursuant to the
Dissolution Laws.
6.
p.
M=L*1,A
L2AUJ-A=JK=W- The Successor Agency agrees to list this First Amendment (and original
Public Works Agreement) as an enforceable obligation on each ROPS during each six-month
fiscal period until repaid in full pursuant to the provisions of the Dissolution Laws. This first
ROP S to so list this Agreement will be ROP S 14-15A for the six-month fiscal peTiod of July 1,
2014 to December 31, 2014.
[signatures on next pagel
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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 OF-/TUSTIN,--,A,-,)Califomia municipal
By:
ATTEST:
CITY CLERK, �r
By: OlrL
Jeffrey Parker
APP 0 AS
By:
David E. Ken
City Attorney
...... ....
ATTEST:
CITY CLE �,TO SUCCESSOR 'GENCY
Y
By:
Jd!(Oy C'. Parker
"PROVED Ag-TOAFORM:
Agency
wyn.4. Murray, Mayor
SUCCESSOR AGENCY:
SUCCESSOR AGENCY TO TUSTIN
By:
blic,bqd9,,W4orporate and polific.
Elwyn A[ MLUTay, Chair
Attachments: EYJ.,UBIT 'A' — South Central Project Area Critical Public Improvements and
Facilities
EXI-11BIT 'B' — Public Works Agreement Payment Schedule
EXI,IIBIT ' A'
SOUTH CENTRAL PROJECT AREA
CRITICAL PU13LIC IMPROVEMENTS AND FACILITIES
Project Description:
Extension of Newport Avenue south, under an existing railroad right of way and
County flood control channel. "rho project will include the construction ofa new on
and off ramp configuration for Newport Avenue and the SR -55 Freeway; the
relocationand 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 Ston ri Drain
Upgrade Relocation
Edinger Avenue Improvements
A -i
S18,300,000
4,700,000
4,200,000
A J-0-02 M
$33,500,000
EXTM31T'B'
(attached}
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